TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal Rules 'Nizam Pakku' as Betel Nut, 'Nil' Duty Rate Upheld</h1> <h3>Azam Laminators Pvt. Ltd. Versus Commissioner of Central Excise, Trichy (Vice-Versa)</h3> Azam Laminators Pvt. Ltd. Versus Commissioner of Central Excise, Trichy (Vice-Versa) - 2019 (367) E.L.T. A22 (Tri. - Chennai) Issues Involved:1. Classification of 'Nizam Pakku' under CETH 21069030 or CETH 08029019.2. Applicability of duty rates based on classification.3. Validity of demands raised by the Department.Detailed Analysis:1. Classification of 'Nizam Pakku':The primary issue was whether 'Nizam Pakku,' a scented betel nut product, should be classified under CETH 21069030, attracting a duty rate of 16%, or under CETH 08029019, attracting a 'Nil' rate of duty. The Department argued that the product should be classified under CETH 21069030, citing that the processes involved, such as adding sweetening agents, amounted to 'manufacture' as per Note 6 to Chapter 21 of CETA. The assessee contended that the product retained the essential character of betel nut and should be classified under Chapter 8, supported by Note 3(b) of Chapter 8, which allows certain treatments like moderate heat and addition of vegetable oil without changing the classification.2. Applicability of Duty Rates Based on Classification:The Department issued several Show Cause Notices (SCNs) demanding duty based on the classification under CETH 21069030. The assessee argued that the product should attract a 'Nil' rate of duty under CETH 08029019, as it retained the character of betel nut despite undergoing minor processes. The Tribunal examined the changes in tariff entries over the years and the definitions provided in Chapter 8 and Chapter 21, concluding that the product did not lose its essential character as betel nut and thus should be classified under CETH 08029019.3. Validity of Demands Raised by the Department:The Department's demands were based on the classification of the product under CETH 21069030. However, the Tribunal found that the product should be classified under CETH 08029019, which attracts a 'Nil' rate of duty. Consequently, the demands raised by the Department were not sustainable. The Tribunal relied on the Supreme Court's judgment in Crane Betel Nut Powder Works, which held that the process employed did not change the nature of the end product, and thus, it retained its classification under Chapter 8.Conclusion:The Tribunal set aside the order upholding the classification of the product under CETH 21069030 and allowed the assessee's appeal, classifying the product under CETH 08029019. Consequently, the demands raised by the Department were dropped, and the Department's appeal was dismissed. The Tribunal emphasized that the product retained its essential character as betel nut and should be classified accordingly, following the Supreme Court's precedent in similar cases.
TaxTMI 