The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that Sweet Pearl, which contained 99% maltitol crystals, is classifiable under the CTH of polyhydric alcohols, thereby setting aside the customs demand.
The appellant M/s. Wrigley India Pvt. Ltd filed a Bill of Entry No. 743087 dated 8.1.2011 for clearance of ‘Sweet Pearl P200’, the country of origin was declared as France. The said goods were classified by the appellant under Tariff Item 29054900 claiming duty of 7.5% BCD + 10 CVD + 3% educational cess on CVD + 3% Education cess on customs duty + 4% Special Additional Duty ad valorem.
The revenue not accepted the classification declared by the appellant based on an apparent input from intelligence, consequent to which, samples were drawn and forwarded to Expert Inspection Agency (EIA), Chennai for expert opinion. The said EIA vide its analysis report dated 22.3.2011 inter alia opined that the sample goods fall under proprietary item, is fit for use as food material. The revenue, still apprehending that the impugned goods were artificial sweetener and therefore a food flavoring material classifiable under Tariff Item 2106 9060, examined some of the employees of the appellant-company.
Thereafter, a show cause notice dated 7.7.2011 was issued inter alia proposing to reject the declared classification of the impugned goods under CTH 2905 4900 thereby reclassifying the same under CTH 21069060 and demanding differential duty demand on account of reclassification.
It appeared from the record that the appellant filed a detailed reply dated 5.3.2012 justifying its classification but, however, not satisfied with the explanation, the original authority / adjudicating authority vide the impugned Order in Original proceeded to reject the classification declared by the appellant, reclassified the subject goods as proposed in the Show Cause Notice and also demanded the differential duty as proposed. It is against this order that the present appeal has been filed before this forum.
The bench carefully perused the documents placed on record and also various decisions / orders relied upon during the course of arguments. The only issue that arises for the consideration was “whether the subject goods ‘Sweet Pearl P200’ is correctly classifiable under CTH 2905 4900?”
Further found that it was revenue which disputed the classification declared by the appellant and hence, the initial burden is on the Revenue to disprove the case of the appellant. The burden is also on the Revenue to justify the reclassification made under 21069060. From the impugned order, the bench found that the Revenue sought opinions of two experts i.e. EIA and Central Food Laboratory, Mysore but those opinions were not considered.
The two member bench of the tribunal comprising M. Ajith Kumar ( Technical member) and P. Dinesh ( Judicial member) concluded that the classification declared by the appellant deserves to be upheld since Revenue has not justified reclassification of the impugned goods under CTH 2106 and therefore, CESTAT set aside the impugned order and allowed the appeal.
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