2015 (9) TMI 1207 - AT - Central Excise

Tribunal grants appeal, resolves goods classification in favor of appellant.

M/s. Pepsico India Holdings Pvt Ltd. Dr. TSR Murli, Director (Technology) Pradip Jain, Chief Financial Manager, Deepak Mathur, Director (Legal), Rajesh Sharma, Partha Gangopadhyay Versus Commissioner of Central Excise And Service Tax, Chandigarh-II

M/s. Pepsico India Holdings Pvt Ltd. Dr. TSR Murli, Director (Technology) Pradip Jain, Chief Financial Manager, Deepak Mathur, Director (Legal), Rajesh ... Issues: Classification of spice mixtures under Central Excise TariffAnalysis:1. Issue of Classification:The case involved 9 appeals, with the main appellant engaged in manufacturing namkeens and potato chips using spice mixtures. The classification dispute was whether the mixtures of spices should be classified under Chapter 9 or Chapter 21 of the Central Excise Tariff. The main appellant argued for classification under Heading No.09109100 of Chapter 9, emphasizing the essential character retention of the mixtures. The Revenue contended that the addition of substances like jaggery, tamarind, and salt excluded the mixtures from Chapter 9 classification.2. Arguments and Findings:The appellant's counsel argued that the mixtures retained the essential character of spices despite the addition of other substances, citing Chapter 9 notes and HSN Explanatory Notes. The ld. Commissioner emphasized the importance of essential character retention post-addition of materials from other chapters. However, the findings lacked clarity on how the mixtures lost their essential character. The Original Authority's conclusion that the mixtures no longer retained their essential character was disputed by the appellant, highlighting the critical character derived from spices.3. Legal References and Circular:The Board's Circular No.205/39/96-CX provided guidance on the classification of spices and condiments, emphasizing the essential character in adding flavor, aroma, and pungency. The judgment clarified that ingredients like garlic and tamarind were spices, supporting the classification of spice mixtures under Chapter 9. The analysis concluded that the spice mixtures produced by the appellants should be classified under Chapter 9, not Chapter 21 of the Central Excise Tariff.4. Decision and Outcome:The Tribunal allowed the appeals filed by the main appellant and other appellants, settling the classification issue in favor of the main appellant. The judgment focused solely on the classification of the goods, leading to the consequential relief granted to the appellants based on the classification under Chapter 9 of the Central Excise Tariff.