Bakery shortening correctly classified under CTH 1517 9010 entitled to benefit under N/N. 6/2002

CESTAT Chennai held that imported bakery shortening was correctly classified under CTH 1517 9010 and entitled to benefit under N/N. 6/2002. The tribunal found lower authorities failed to properly analyze entry Sl. No. 246 in Central Excise Notification No. 6/2002, particularly regarding tariff code changes from 6-digit to 8-digit system up to 28.02.2005. The tribunal determined that when Sl. No. 246 was inserted, CTH 150890 was based on 6-digit code while corresponding customs tariff used 8-digit code. Considering the tariff amendment scenario and code level changes, appellants were entitled to nil rate of BCD. The impugned order was set aside and appeal allowed.

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Issues:
The judgment involves the interpretation of Customs Tariff Heading (CTH) for imported goods and the eligibility for exemption under Customs Notification No. 4/2005 and Central Excise Notification No. 6/2002.

Interpretation of Customs Tariff Heading (CTH):
The appellants imported goods declared as "Bakery Shortening" under CTH 1517 9010 and claimed nil rate of Basic Customs Duty (BCD) under Customs Notification No. 26/2000. The Revenue doubted the applicability of Notification No. 4/2005 for goods under CTH 1516, leading to Demand Notices for differential duty. The original authority confirmed the demand, stating that the goods fell under CTH 1517, not covered by Notification No. 4/2005. The appellants argued that the goods were covered under Notification No. 6/2002, applicable to goods under sub-heading 150890.

Appeals and Commissioner's Order:
The appellants filed appeals before the Commissioner (Appeals) challenging the denial of exemption benefits. The Commissioner upheld the denial, leading to the present appeals before the forum.

Arguments and Findings:
The appellants argued that the goods imported under CTH 1517 were covered under the relevant Excise Notification for heading 1508 pre-amendment. The forum considered whether the appellants were entitled to the benefit of Notification No. 6/2002. The lack of discussion on the entry at Sl. No. 246 in the context of changes in the statute book up to 28.02.2005 was noted. The forum analyzed the changes in tariff headings pre and post-amendment, concluding that the appellants were entitled to nil rate of BCD under CTH 1517.

Conclusion:
The forum set aside the impugned order, holding that the denial of exemption benefits by the lower authorities was unjustified. Considering the change in classification due to amendments, the appellants were entitled to nil rate of BCD. The appeals were allowed, and the impugned order was set aside.

(Order pronounced in the open court on 23.11.2023)

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