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2005 Supreme(SC) 1569
2005(8) Supreme 411
Supreme Court of India
(From Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi)
Ashok Bhan & C.K. Thakker, JJ.
Commissioner of Central Excise, Meerut —Appellant
versus
M/s. Maharshi Ayurveda Corporation Ltd. —Respondent
Civil Appeal Nos. 4369-4370 of 2000
With
C.A. No. 6774 of 2001
Decided on 7-12-2005
Counsel for the Parties :
For the Appellant : Mohan Prasaran, Additional Solicitor General, Manish Tiwari, Vivek Sood, Gaurav Dhingra, Nitesh Rana, Chidananda D.L., K.K. Senthilvelan and P. Parmeswaran, Advocates.
For the Respondent : Manoj Arora, Ms. Hemantika Wahi and Ms. Sadhna Sandhu, Advocates.
Important point
If a product cannot be brought under specific entries in Tariff Act only then resort can be made to a residuary entry under Central Excise.
Headnote:Central Excise Act, 1944—Central Excise Tariff Heading No. 2001.90 and 2108.90—Product “Herbonic” tonic whether to fall under heading 2001.90 or under Chapter heading 2108.90—Respondent filed classification test for its products “Herbonic” under sub-heading 2001.90 declaring same to be a preparation of vegetables, nuts and other parts of plants—Appellant alleged that product was mixture of assorted vegetables and dry fruits and was classifiable under sub-heading 2107.91—Product was a mixture of assorted vegetation, dry fruits and seeds—Since product was mixture of different vegetation it was rightly classified by Tribunal under Chapter 20—Chapter 21 dealt with “Misc. Edible Preparations” —It product could not be brought under specific entries in Tariff Act only then resort could be made to a residuary entry—Impugned order suffered no illegality.
Held : The product under reference is a mixture of assorted vegetation and dry fruits and seeds. That different vegetations namely Khas Khas, Aswagandha & Brahmi Booti is turned into powder and processed in Khas Khas and giri badam (almond) oil and then the whole mixture is processed in sugar syrup under vacuum and thereafter choti illayachii (cardamom) and roof kewara are added as flavour. Since the product “Herbonic” is mixture of different vegetation it is rightly been classified by the Tribunal under Chapter 20. In Chapter 21 there is an entry reading as “Edible preparations, not elsewhere specified or included” under the particular heading “Miscellaneous Edible Preparations”. Chapter Note 9(a) of the Chapter 21 reads “Heading No. 21.08, inter alia includes”: [a] protein concentrates and textured protein substances; [b] preparations of use, either directly or after processing (such as cooking; dissolving or boiling in water, milk or other liquids), for human consumption”. Sub-heading 2107.91/2108.90 covers other edible preparations not elsewhere specified and as such is residuary in nature. As per Rule 3(a) of the rules of interpretation of Schedule-I, the heading which provides the specific description should be preferred to the heading providing a general description. (Para 14)
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. (Paras 19 and 20)
Judgment
Bhan, J.—These appeals have been filed by the Commissioner of Central Excise, Meerut (for short “the appellants”) under Section 35 L (B) of the Central Excise Act, 1944 (for short “the Act”) against the judgment and final order No. 1009-1010/99-C dated 18.11.1999 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short “the Tribunal”) in appeal No. E/3070-71/98-C by which the Tribunal has set aside the order passed by the Commissioner (Appeals) and allowed the appeals filed by M/s. Maharshi Ayurveda Corporation Limited, respondents herein, holding that the product “Herbonic” tonic falls under Chapter heading 2001.90 and not under Chapter heading 2108.90.
2. The issue involved in these cases is whether the product “Herbonic” tonic is classifiable under Central Excise Tariff Heading No. 2001.90 or 2108.90. The Tribunal classified the product under Chapter heading 2001.90.
FACTS
3. Respondents are engaged in the manufacturing of P.P. Ayurvedic Medicaments falling under Chapter heading 3003.30 of the Schedule to the Central Excise Tariff Act, 1985 (for short “the Tariff Act”). The respondents had filed a classification list effective from 25.4.1994 for the product “Herbonic” put up ordinarily for sale in unit containers under sub-heading 2001.90 declaring the same to be a preparation of vegetables, nuts and other parts of plants and fruits/seeds claiming nil rate of duty under notification No. 2/94 dated 1.3.1994 whereas as per appellants the product is a mixture of assorted vegetables and dry fruits or seeds and is a health vitalizer being used for all round growth and improvement of memory and general health of children and adults and the product merits classification under sub-heading 2107.91 chargeable to duty at the rate of 20% ad valorem. After the Budget of the year 1995-96 the product was reclassified under sub-heading 2108.90. Appellant issued show cause notices no C.No. VI3013/49/96/Div.IV/3405, C.No. VI3013/106/Div.IV/6332 dated 26.6.1994, C.No. VI30001/3/40/95-D-IV/677 dated 27.1. 1995, C.No. VI3013/94/95/D-IV/1198 dated 20.2.1995, C.No. VI2113/323/95/D-IV/6009 dated 16.11.1995 and C.No. VI3013/32/95/D-IV/6569 dated 26.12. 1995 to the respondents covering duty demand for different periods of Rs. 3,45,340.55.
4. Assistant Commissioner confirmed the demand vide order in original No. 251/D/96 dated 15.10.1996 and also imposed a penalty of Rs. 10,000/- on the respondents. In other cases of the respondents in respect of classification of the same product, the Assistant Commissioner also confirmed the demand of Rs. 1,42,946.00 (Rs. 68,078.20 + 74,867.80) and also imposed a penalty of Rs. 7,000/- on the respondents vide order in original No. 269-270/D/96 dated 18.11.96.
5. Aggrieved by the orders of the Assistant Commissioner, respondents filed appeals before the Commissioner (Appeals). The Commissioner (A) considered the HSN and the Central Excise Tariff thoroughly and adjudicated that the product “Herbonic” is classifiable under Chapter 21 (2107.91/2108.90). The Commissioner (A) thus confirmed the order in original passed by the Assistant Commissioner.
6. Aggrieved by the order in appeal passed by the Commissioner (A), the respondents filed appeals before the Tribunal. The Tribunal after scrutinizing the submissions made by the parties held that the product “Herbonic” is classifiable under sub-heading 2001.90 being specific as against entries in Chapter 21 which is a residuary general heading. The product in question cannot be classified under a general heading when it can be classified under a specific heading as according to Rule 3(a) of the rules of interpretation of Schedule-I. “The heading which provides the most specific description shall be preferred to headings providing a more general description.”
7. Aggrieved against the order passed by the Tribunal, the present appeals have been filed. Counsels for the parties have been heard.
8. Relevant entries of Tariff Act and HSN are Entry 2
