'Cheeselings' By Parle-G Classified As 'Namkeen', Exempt From Excise Duty: CESTAT
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that 'Cheeselings' by Parle-G is 'namkeen' which is exempted from the excise duty under S. No. 29 of the Notification No. 3/2006-Central Excise dated 1st March 2006.
The Bench of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member) has observed that “'Namkeen' has not been defined either contextually in the notification or as a separate nomenclature in the tariff. Therefore, the adjudicating authority has erred in concluding that the impugned goods are not 'namkeen'…..”
Section 11A of Central Excise Act, 1944 provides that the Central Excise Officer must, within two years from the relevant date, serve a notice to the person liable for any duty that was not levied, paid, or was short-levied, short-paid, or erroneously refunded, asking them to show cause why the specified amount should not be paid.
Rule 25 of the Central Excise Rules, 2002 provides that if a Central Excise Officer, has reason to believe that any goods, which are liable to excise duty but no duty has been paid thereon or the said goods were removed with the intention of evading the duty payable thereon, the Central Excise Officer may detain or seize such goods.
As per Notification No. 3/2006-Central Excise, dated March 1, 2006, under Section 5A(1) of the Central Excise Act, 1944, the Central Government, in consideration of the public interest, exempts certain excisable goods from a portion of the excise duty.
Chapter No.21, Supplementary Note-6 of Central Excise Tariff item 2106 90 99 (S. No. 29) of the above notification provides a specific definition for certain categories within this chapter. It defines what constitutes a “Namkeen, bhujia, mixture, chabena, and similar edible preparations in ready-for-consumption form,” ensuring that items classified under this description can qualify for certain exemptions or lower excise duties.
The assessee/Parle-G, (appellant) a manufacturer of biscuits, confectionary and similar products, had, for the period between January 2012 and December 2012, availed the benefit on clearance of 'cheeselings' claiming to be 'namkeen' classifiable against tariff item 2106 9099 of Schedule to Central Excise Tariff Act, 1985 which was entitled to the benefit of the notification no. 3/2006-CE dated 1st March 2006.
However, the authorities denied the exemption, resulting in a duty liability of ₹81,23,300 under Section 11A of the Central Excise Act, 1944, along with applicable interest and a penalty under Rule 25 of the Central Excise Rules, 2002. The denial was based on the finding that the manufacturing process of "cheeselings" is different from "namkeen," and mere portrayal as "namkeen" did not qualify for the exemption.
The Commissioner of Central Excise/adjudicating authority observed that “the process of manufacturing "Cheesling" manufactured by Noticee is totally different. Cheeseling products are not fried products and mainly made of Cereal flour, (Maida), oil, salt, etc. The processes of manufacture is also totally different and however akin to Namkeen. Thus, they cannot be classified under the category "Namkeen. At the most they can be called as "Snacks Foods" like "Khakharas" which are also made of wheat flour, salt etc. Merely because the impugned products contain "Salt" or has salted taste, they cannot be called as "Namkeen" and therefore not entitled for benefit as per Sr. No. 29 of Notification No. 3/2006-CE dt. 01.03.2006. They are" "Snack Foods' only and being packed in package with predetermined quantity would be covered by items at Sr.No.10 of Notification dt. 2/2011 dt 1.3.2011.”
The assessee has challenged the order passed by the Commissioner of Central Excise/adjudicating authority before the Tribunal.
The Tribunal opined that 'Cheeselings' is a peculiarly indigenous preparation. 'Namkeen' has not been defined either contextually in the notification or as a separate nomenclature in the tariff. Therefore, the adjudicating authority has erred in concluding that the impugned goods are not 'namkeen' as there was no allegation of non-conformity with any prescribed description which renders it impossible for us to determine such finding as legal and proper.
In view of the above, the Tribunal allowed the appeal.
Counsel for Appellant/ Assessee: Viraj Reshamwala
Counsel for Respondent/ Department: P K Acharya, Superintendent
Case Title: Parle Products Pvt. Ltd. v. Commissioner of Central Excise, Mumbai-I
Case Number: EXCISE APPEAL NO: 85839 OF 2014