2005 (12) TMI 93 - SC - Central Excise

Supreme Court affirms classification of 'Herbonic' tonic under Tariff Act Chapter 20

The Supreme Court upheld the Tribunal's decision classifying the product 'Herbonic' tonic under Chapter 20 of the Tariff Act, specifically sub-heading ... Whether the product 'Herbonic' tonic is classifiable under Central Excise Tariff Heading No. 2001.90 or 2108.90? Held that:- Since in the present case the product is covered under specific entry under Chapter 20 resort cannot be made to the residuary entry. The exclusionary note in HSN of Entry 20.08 of Chapter 20 of HSN is not applicable because it excludes the products consisting of mixture of plants or parts of plants (including seeds and fruits) of different species or consisting of plants or parts of plants which are not consumed as such but which are of a kind used for making herbal infusions or herbal 'teas'. In the present case the mixture prepared is of parts of plants, seeds and nuts which can be consumed as such. It would therefore be not applicable. Entry 14 of Chapter 2106.90 produced above would also be not applicable since in this case we are holding that the present case would be governed by Chapter 20 of the Tariff Act and not Chapter 21 of the Tariff Act. The Entry 14 referred to above is a part of Chapter 21 of HSN which corresponds to Chapter 21 of Tariff Act which is not applicable to the present case. Thus the Tribunal is right in holding that the product of the respondents is covered by Chapter 20 of the Tariff Act and not Chapter 21 of the Tariff Act. Appeal dismissed. Issues Involved:1. Classification of the product 'Herbonic' tonic under Central Excise Tariff Heading No. 2001.90 or 2108.90.Issue-wise Detailed Analysis:1. Classification of 'Herbonic' tonic:Facts:Respondents are engaged in the manufacturing of Ayurvedic Medicaments under Chapter Heading 3003.30. They filed a classification list for 'Herbonic' under sub-heading 2001.90, claiming it as a preparation of vegetables, nuts, and other parts of plants, thus attracting a nil rate of duty under Notification No. 2/94. The appellants contended that 'Herbonic' is a health vitalizer and should be classified under sub-heading 2107.91, later reclassified under 2108.90, chargeable to duty at 20% ad valorem. Show cause notices were issued demanding duty for different periods.Assistant Commissioner's Decision:The Assistant Commissioner confirmed the demand and imposed penalties on the respondents.Commissioner (Appeals) Decision:The Commissioner (Appeals) upheld the Assistant Commissioner's order, classifying 'Herbonic' under Chapter 21 (2107.91/2108.90).Tribunal's Decision:The Tribunal classified 'Herbonic' under sub-heading 2001.90, stating it is specific as per Rule 3(a) of the Rules of Interpretation of Schedule-I, which prefers specific descriptions over general ones.Supreme Court Analysis:Relevant Entries:- Chapter 20: Preparations of vegetables, fruits, nuts, or other parts of plants.- Chapter 21: Miscellaneous edible preparations, including food preparations not elsewhere specified.Arguments:- Appellant: 'Herbonic' is a mixture of plants and fruits, excluded from Chapter 20 under HSN and should be classified under Chapter 21 (2106.90), as it contributes to general health and well-being.- Respondent: Chapter 20 is specific for preparations of vegetables, fruits, or nuts, and should be preferred over the general description in Chapter 21, as per Rule 3(a).Findings:- The product 'Herbonic' is a mixture of assorted vegetation, dry fruits, and seeds, processed in sugar syrup with added flavors.- The Tribunal correctly classified it under Chapter 20, as it provides a specific description over the general heading in Chapter 21.- The exclusionary note in HSN for Entry 20.08 does not apply since 'Herbonic' can be consumed as such, unlike products used for making herbal infusions or teas.Conclusion:The Supreme Court upheld the Tribunal's decision, confirming that 'Herbonic' falls under Chapter 20 of the Tariff Act and not Chapter 21. The appeals were dismissed with no order as to costs.