By TIOL News Service

ALLAHABAD, DEC 15, 2016. THE allegations in the SCN were that Shubham Goldiee Masale (P) Ltd., were involved in manufacture of Masale such as Jaljeera, Dehati Buknoo (Hazmi), Diabetic Masala, Milk Masala, Shikakai Powder etc. and the said Masalas merit classification under Chapter Heading 21.08/21.06 and chapter note provides that re-packing of the goods falling under Chapter Heading 21.08/21.06 amounts to manufacture.

In respect of Ashok Grih Udyog Kendra Ltd ., they were issued with SCNs proposing to classify various Masalas manufactured under CSH2108 as against classification claimed under CSH09.03.

The AA refused to accept the classification under Chapter Heading 09.03 claimed by Shubham Goldiee Masale (P) Ltd. / Ashok GrihUdyog Kendra Ltd. Jaljeera and Dehati Buknoo were classified under heading 21.08 for period before 01-03-2005 and in SH 21.06 after 01-03-2005 [Demand confirmed Rs.1.20crores]. However, the AA dropped the demand of duty raised against the goods viz. Rayata Masala, Chaat Masala, Daal Masala, Chana Masala, Dahi Bara Masala, Chatpata Masala, Tea Masala, Muri Masala by classifying them under chapter 09.

Further, demand on Gulabjamun Mix for which Shubham Goldiee Masale (P) Ltd., had claimed that they were not manufacturing the same and were involved in its trading only, was also confirmed. [Demand Rs.5.28crores]

Before the CESTAT, the appellants submitted –

(a) in respect of Jaljeera the ruling of Hon'ble Apex Court in the case of Commercial Tax Officer Vs. Jalani Enterprises - 2011-TIOL-33-SC-CT, is squarely applicable. The Apex Court has held that Jaljeera is Masala packed into packets. Further, chapter note 3 of chapter 9 indicates Sub Heading 09.03 includes products commonly known as "Masalas".

(b) in respect of Hazmi i.e. Dehati Buknoo and Milk Masala, the issue was settled by Order-in-Original No. 39-CEX/ADC/2010 dated 19-08-2010 wherein Additional Commissioner has decided that the classification of the product Dehati Buknoo and Milk Masala is under Chapter Sub-heading 09.03 and the said order of Additional Commissioner has been accepted by Commissioner of Central Excise, Kanpur, who happens to be the Adjudicating Authority in the impugned orders.

(c) in respect of Gulabjamun Mix, they stated that they were not manufacturing Gulabjamun Mix but they were involved in only trading; that they are not contesting the demand confirmed in respect of Shikakai Powder and Diabetic Masala.

The Bench observed -

++ Apex Court (in Jalani Enterprises - 2011-TIOL-33-SC-CT) has held that Jaljeera is nothing but a Masala. We have also gone through the chapter note 3 of chapter 9 of schedule to Central Excise Tariff Act, 1985 in respect of the law prevailed till 01-03-2005. In respect of the tariff which is with effect from 01-03-2005, the same contents of chapter note 3 of chapter 9, is reproduced in supplementary notes. The said chapter note 3 indicated that chapter sub heading 09.03 covers goods commonly known as "Masala" and chapter note 3 indicates that Masala is classifiable under chapter sub heading 09.03. Therefore, we hold that Jaljeera is classifiable under chapter sub heading 09.03 during the period up to 01-03-2005 and the same is classifiable under chapter sub heading 09.10 for period subsequent to 01-03-2005. Since in both the impugned orders, duty is confirmed on Jaljeera treating them as classifiable under 21.08, the demand does not sustain.

++ In respect of DehatiBuknoo though the impugned Show Cause Notices, were issued earlier, the Department had later taken a stand through Order-in-Original dated 19.08.2010 passed by Additional Commissioner, that DehatiBuknoo and Milk Masala were classifiable under 09.03 and such order was stated to be accepted by the Department. Therefore, issue is now settled that DehatiBuknoo (Hazmi), Milk Masala are classifiable under 09.03 or similar such classification subsequent to 01-03-2005 and since the impugned orders have confirmed the demand treating DehatiBuknoo and Milk Masala under 21.08, the said demand does not sustain.

++ In respect of Gulabjamun Mix, Shubham Goldiee Masale (P) Ltd, had claimed that they were not involved in manufacture of Gulabjamun Mix but they were involved in only trading of the same. The reason for not relying on the said statement that it was not manufacturing Gulabjamun Mix is not forthcoming in the Show Cause Notices. Therefore, none of the Show Cause Notices involved in the impugned orders are sustainable for demand of duty in respect of Gulabjamun Mix.

Conclusion: The appeals were allowed partially.

(See 2016-TIOL-3238-CESTAT-ALL)