LexM/S AMRIT AGRO INDUSTRIES LTD. AND ANR. versus COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD
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A
MIS AMRIT AGRO INDUSTRIES LTD. AND ANR.
v.
COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD
MARCH 19, 2007
B.
[S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.]
Central Excise Tariff Act, 1975:
Schedule-Headings 20. 01 and 21. 08- 'Roasted peanuts'-
C Classification of-Held, essential structure of peanuts is not changed by
process of roasting-T.herefore, roasted peanuts are covered under Chapter
20-Notification No. 4197-C.E. dated 1.3.1997.
Recomputation of duty-Assessee claiming roasted peanuts under
D Chapter 21, availing exemption from payment of duty-Held, assessee will /
have to show as to how it determined the value-Whether price charged by
assessee contained profit element or duty element will have to be examined-
Matter remitted to adjudicating authority for recomputation of duty.
.,_
Schedule-Headings 20.01and21.08-'Moongfali masala mazedar'-
E Classification of-Held, in the case of preparation of 'moongfali masala
mazedar ', preparation being very similar to 'bhujia ', principle of
predominance cannot be applied-The product falls under Chapter 21,
Heading 21.Ql, sub-heading 2108.99 and, therefore, assessee is entitled to
exemption-Notification No. 4197-C.E. dated 1.3.1997.
F
Appellant-assessee, a manufacturer of namkeen like also bhujia,
chholey masala, roasted peanuts and 'moongfali masala majedar ', classifying
r
all the four items as falling under Heading 21.08 as namkeen, claimed
exemption under Notification No. 4/97-CE dated 1.3.1997. The Revenue
accepted the claim with regard to chholey masala and aloo bhujia, but held
roasted peanuts and 'moongfali masala mazedar ', as falling under Heading
G 20.01, i.e., "Preparations of Vegetables, Fruits, Nuts and other Edible Parts
of Plants." According to the Revenue, in the process of roasting character of
a nut would remain intact, and similarly character of moongfali would not be
lost even after salting or frying it, and, therefore, roasted peanuts and
moongfali masala mazedar were classifiable under Heading 20.01.
H
62
J
AMRIT AGRO INDUSTRIES LTD. "· COMMNR. OF CENTRAL EXCISE, GHAZIABAD
63
>·
Partly allowing the appeals arising out of classification and allowing A
the quantum appeals, the Court
HELD: 1. A roasted peanut is not a product commonly known as
namkeen. It cannot be compared to bhujia. Roasted peanut is also a preparation,
however, it is a preparation of nuts like almonds, peanuts, ground-nuts etc. B
They are products which are prepared or preserved by processes like roasting.
The Tribunal ('CEGA T'') rightly accepted the classit1cation of roasted peanuts
under Heading 20.01. The Tribunal adopted a correct test when it says that
the essential structure of the peanut is not changed by the process of roasting.
The assessee merely applies salt to roasted peanuts which does not obliterate
the essential character. Moreover, roasting is a process. That process has C
not been excluded in Note l to Chapter 20. Therefore, roasted peanuts are
covered by Chapter 20. Even according to the Explanatory notes of HSN under
Heading 20.08 ground-nuts, almonds, peanuts etc. which are dry-roasted, fat-
roasted whether or not containing vegetable oil are the items which all would
stand covered by the said Heading 20.08.
D
[Para 6 and 7) (66-C, F, G; 67-C, D]
2. In the case of 'moongfali masala mazedar ', the preparation is very
similar to bhzif ia. Even according to the Department, a/oo bhujia falls under
heading 21.08. As regards 'moongfali maza/a mazedar', the principle of
predominance cannot be applied, particularly in absence of any Section Note E
or Chapter Note propounding the said principle. In this process the capacity
to germinate is obliterated. 'Moongfa/i masala mazedar' is the mixture of
material other than the nuts. It is an oil preparation. It makes use of gram
flour (besan). It undergoes the process of deep frying. When such a process
is applied one cannot apply the principle of predominance. In the F
circumstances, 'moongfali masa/a mazear' falls under Chapter 21, Heading
21.01, sub-heading 2108.99 and, therefore, the assessee is entitled to
exemption. (Para 8) (67-C-E)
3. As regards the Department invoking the extended period oflimitation,
it may be seen that at the instance of the Department, the assessee had filed G
a revised declaration on 19.11.1997. In the circumstances, the show cause
notice dated 5.5.1998 is within six months, consequently, the question of
extended period does not ariseExcerpt shown. Read the full judgment & AI analysis in Lexace.