TaxTMI 
TaxTMI 
1999 (11) TMI 263
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....uty and the proceeding initiated by the show cause notice dated 4-3-1992 was dropped. Against the said order, the department filed appeal before the Collector (Appeals) and the Collector (Appeals) following the earlier order passed by him in Order-in-Appeal No. 67/94 set aside the Assistant Collector's order and held that pan chutney will be correctly classifiable under 2107.91. This appeal is against the said order. 2. Shri J.S. Agarwal, ld. Advocate appearing for the appellants have brought to our notice various dictionary definitions of the word 'chutney'. He has also drawn attention to further published material relating to allied edible preparations like sauce, ketch-ups etc. to show that equivalent of vernacular word 'chutney' was comparable to sauce, ketch-up etc. 3. Before considering the matter further, it will be useful to extract the relevant tariff headings which are given below. The appellants have claimed classification under Chapter heading 2103.11 which reads as follows : 'sauce, ketch-up and the like and preparations thereof' Department seeks classification under tariff Heading 2107 which reads as under :- "edible preparations; not el....
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....d. It is obvious that pan chutney is not taken as a food. It cannot therefore, be considered to be an edible preparation; that is a preparation which is meant to be eaten as food. 'Pan Chutney' is never taken as a substitute for food. It is meant only to give a relish, taste or flavour. The pan chutney is taken by persons who take pan-for its relish taste and flavour. Pan can be taken even without application of the chutney. It is usually taken in a very negligible quantity while taking pan. Further, pan chutney manufactured by the appellants is manufactured without aid of power by boiling sugar in water and adding small quantities of menthol, perfume, silver leaves and saffron. When it cools down, it forms a pasty substance which is finally put into unit containers and marketed. Generally, the ratio of the ingredients is : sugar syrup up to 95% and menthol perfume, silver leavers and saffron to the extent of 1.225% each. 5. In support of his contention that the item will be more appropriately classifable under Tariff Heading 2103, ld. Counsel referred to the definitions of the words 'sauce', 'ketch-ups' etc. referred to above. Further, according to the 'International Book ....
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....product under dispute/there was no such vegetable base. The appellants, though they are marketing the product as 'pan chutney' cannot, by mere description of the product as 'chutney' make it a vegetable preparation as commonly understood. The composition and ingredients of the goods under dispute are clearly different from the composition or ingredients of the 'sauce' and 'ketch-ups' which had vegetable base such as tomato or other vegetable and was salty in taste whereas the 'pan chutney' was a sugar based sweet preparation. Therefore, he submitted that the findings of the Collector (Appeals) in the impugned order may be upheld and the appeal rejected. In support of his contention he also cited the Tribunal decision in Hari Chand Shri Gopal v. C.C.E., Meerut reported in 1996 (83) E.L.T. 281 (T) in which the Tribunal had confirmed the classification of the same product, viz. 'pan chutney' under Chapter sub-heading 2107.91. 7. We have taken note of the rival submissions. As regards the decision in Hari Chand Shri Gopal (supra) relied on by the ld. JDR, we find that in paragraph 6, Tribunal has observed that 'pan chutney' (the goods under consideration) "are not like the sauc....
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.... product "pan chutney" under sub-heading No. 2107.91 of the Tariff." 8.  The discussions in Hari Chand case (supra), it would be seen, primarily dealt with 'chutney' as an accompaniment to eatables. It is not in dispute that 'chutni' or 'chutney' is an Indian vernacular word which has acquired common usage in other languages like English along with words like 'curry', 'masala', etc. 'Chutni' is a generic word and is invariably used along with some other adjectives like 'coconut', 'mango', 'pudhina' etc. to show the main ingredient with which it is made. Therefore, to be eligible for being classified along with items like 'sauce' or 'ketchup' covered by sub-heading 2103, the Tribunal reasoned that the item should be an accompaniment to eatables. Since 'pan-chatni' was, admittedly not an accompaniment to any 'eatables item, the view was taken in Hari Chand case (supra) that it will be classifiable under Heading 2107. 9. We now consider the arguments advanced by the present appellants on the question whether the description of the goods under Heading 2107 answers the item in question, viz, 'pan chatni'. Heading No. 21.07 relates to "Edible preparations, not elsewhere s....
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....w we have taken is at variance with the view taken by the Tribunal in Hari Chand case (supra), we may refer the question of correct classification of 'Pan chutney' to a Larger Bench. 12. Accordingly, we direct the Registry to place the matter before the Hon'ble President for constituting a Larger Bench. Sd/- A.C.C. Unni Member (J) 13. [Dissenting per : P.C. Jain, Vice President]. - I have perused the order proposed by my learned Brother Shri A.C.C. Unni, Member (Judicial) but I regret with respect that I am unable to persuade myself with the conclusion reached by him. Question involved in the present case is whether "pan chatni" is classifiable under TH 21.03 as a preparation alike to sauces or ketch-up or it is an edible preparation not elsewhere specified or included under TH 21.07. 14. As regards the appellants' contention that it does not fall under TH 21.07 on the ground that it is not a thing fit to be eaten in the sense of a food required to maintain life and growth of the body, I am afraid that such a restricted meaning to the word "edible preparation" will not be a correct one in the context of Chapter 21 and earlier Chapters cont....
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....r : "Whether in the facts and circumstances of the case, the product 'Pan Chatni' manufactured by the appellants is classifiable under Tariff Heading 2103 or Tariff Heading 2107". Sd/- P.C. Jain Vice President Sd/- A.C.C. Unni Member (J) 19. [Order per : G.A. Brahma Deva, Member (J)]. - The dispute is in respect of classification of product viz 'Pan chutney'. Whether Pan chutney is classifiable under tariff Heading 2103 as claimed by the party or under 2107 as per the department is an issue to be considered in this appeal. Hon'ble Member Shri A.C.C. Unni, Member (Judicial) was of the view that the item in question is appropriately classifiable under 2103.11 as claimed by the party, however, in view of the earlier decision of the Tribunal in the case of Hari Chand Shri Gopal v C.C.E., Meerut reported in 1996 (83) E.L.T. 281 (T) he proposes to refer the question of correct classification of Pan chutney to a larger bench. On the other hand, the then Hon'ble Vice President Shri P.C. Jain following the decision of the Hari Chand (supra) held that item is classifiable under tariff Heading 21.07 in dismissing the appeal. Hence, this difference ....
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....from the expression "not elsewhere specified or included in Heading 21.07". This means the preparations mentioned earlier in this Section and in particular in this Chapter 21 are all "edible preparations". What is includible in 21.07 are only preparations which have not been specified elsewhere or which have not been included elsewhere. I am, therefore, unable to subscribe to the narrow meaning advanced by the learned advocate for the appellants to discard TH 21.07 for the product "Pan chutni". 24. I find that the very issue had come up for consideration before the Tribunal in the case of Hari Chandi Shri Gopal (supra) and wherein it was held that item is classifiable under sub-heading 2107.91 of the tariff. While arriving at the conclusion the Tribunal has observed that simply because the manufacturer had named his product as "Pan chatni" it does not become a Chatni as commonly undrestood. The observation in para 11 is relevant. Para 11 is as under :- "11. In popular sense and in common parlance, this product could not be treated as Chatni. No house-wife will use it with eatables. It is not placed on the dining table. With Chatni we think of our desi snacks such as pako....