ORDER
S.L. Peeran, Member (J)
1. Appellants through the above application have prayed for early hearing of the Appeal Nos. E/2315/97 and E/803/98 out of turn on the ground that the Board of Central Excise & Customs has issued Circular No. 205/39/96-CX., dated 30-4-1996 wherein they have disposed of the issue of classification of spices coming under Chapter 9 of CET, Mixed Condiments and mixed seasonings under chapter sub-heading 2108.90 as edible preparation not elsewhere specified or included. On the basis of Board’s circular, appellants contend that the classification has been applied in all competitors firms and this issue has got recurring effect and appellants are put to hardship on account of pendency of appeal.
2. Heard ld. Advocate and ld. DR .
3. In view of Board’s circular on the classification of the product in question and the same having not been examined by the authorities, therefore the request for early is accepted and appeals taken up for hearing.
4. In both the appeals, the classification of the product are as follows :-
(a) Sambar Powder (b) Rasam Powder (c) Vangibath Powder (d) Spiced Chutney Powder (e) Puliyogere Powder (f) Bisibelebhath Masala (g) Madras Sambar Powder (h) Madras Rasam Powder The period in Appeal E/2315/97 is 1-4-1992 to 31-3-1995 and demands confirmed are to the time of Rs. 2,47,324.25 and penalty of Rs. 1 lac. 5. In Appeal No. E/803/98, the demand is pertaining to the period 1-4-1995 to 31-7-1995 and demand confirmed is Rs. 91,474.96 and the items are, as in the appeal noted above.
6. In E/2315/97, the order has been passed by Commissioner of Central Excise vide Order-in-Original No. 26/97, dated 31-7-1997 holding that the item in question namely Sambar Powder, Rasam Powder, Puliogere Powder, Bisibelebath Masala, Vangibath Powder, Madras Sambar Powder and Madras Rasam Powder will be classifiable under chapter sub-heading 2103.10 whereas spiced chutney powder will be classifiable under 2108/2107.91. Appellants claim that the same are classifiable under Chapter 9 and covered by Board’s circular was also rejected and duty for larger period has been confirmed in the matter. However, the Commissioner has not examined the effect of the Board’s circular as well as the judgment on non-applicability of larger period in the matter. Therefore, the ld. Counsel submits that the matter is required to be remanded for de novo consideration. He further submits that Chapter 9 was amended in 1998 by the Union Budget incorporating these items under Chapter Note 3 to be brought under Chapter 9 and not Chapter 21. He submits that in terms of Hon’ble Supreme Court judgment rendered in the case Wood Craft Products Ltd. reported in 1995 (77) E.L.T. 23 (S.C.) the classification has to be only under Chapter 9 and not under Chapter 21. All these factors are required to be reconsidered by the authorities. He further submits in all similar units manufacturing the same item, the Commissioner has classified only under Chapter 9 and this factor has not been taken into consideration by the authorities. Therefore, he seeks for remand of the matter so that the Commissioner can re-examine the issue at greater length after granting hearing to the appellants. He further submits that the same argument holds good even for Appeal E/803/98 which pertains to subsequent period and items involved are same.
7. Heard ld. DR, who reiterates the submissions as taken up the authorities in the order.
8. On careful consideration of the submissions, we notice that Board by their circular dated 30-4-1996 have opined in paras 3 & 4 as follows :
3. It is observed from the HSN Explanatory Notes to Chapter 9 (coffee, tea, mate and spices) that the said Chapter also covers seeds of spices. Seeds of coriander are specifically covered by Heading 09.09 of HSN. From the said notes it is also clear that addition of substances such as salts, anti-oxidants etc. will not take out coriander seeds from the purview of Chapter 9. Coriander seeds belong to the family of spices and would remain therein whether in whole, crushed or powdered form even if these have been mixed with other spices and other products of Heading Nos. 09.04 to 09.10. Further Note 1(C) of Chapter 21 of HSN specifically excludes spices from the purview of Chapter 21. Further, as in the instant case, even if the products under reference, viz. Dhana Dal/Dhania Ki Dal/Coriander seeds are not used as spices, i.e. as condiments, the product retains its identity as spices since the general Chapter Note of Chapter 9 defines spices, as those which are mainly used as condiments. The Chapter Note does not require that to be called as spices, such products (including seeds etc.) should be solely used as condiments.
Analogy can be derived from the fact that aniseeds, which are also used as a freshner just like the product in question, does not merit classification under Chapter 21 but is to be treated as spices and is classified under Chapter sub-heading 0909.10 of the HSN.
4. In view of the above, Board is of the view that Dhana Dal/Dhania Ki Dal/Coriander seeds are rightly classifiable under Chapter Heading 09.03 of the Central Excise Tariff.
[Based on M.F. (D.R.) Circular No . 197/31/96-CX, dated 15-4-1996]
9. We also note that Chapter Note 3 has been incorporated in Chapter 9 by amendment in the year 1998 which reads as follows :
“3. Heading No. 09.03 covers spices, a group of vegetables, products (including seeds etc.) rich in essential oils and aromatic principles, and which, because of their taste, are mainly used as condiments. These products may be whole or in crushed or powdered form. The addition of other substances to spices shall not affect their inclusion in this heading provided the resulting mixtures retain the essential character of spices included in this heading. The heading also includes products commonly known as “masalas”.
Therefore, the Commissioner and the authorities below ought to have taken these vital facts for consideration while arriving at the correct classification of the product in question. In the impugned order, although the Board’s circular has been noted but no effect or discussion has been made. In terms of Hon’ble Supreme Court rendered in the case of Ranadey Micro Nutrients reported in 1996 (87) E.L.T. 19, the Board’s circulars are binding on the authorities below. This view has also been reiterated by Hon’ble Supreme Court in the case of Poulose and Mathen reported in 1997 (90) E.L.T. 264 (S.C.) and again reiterated in Purexval Associates Ltd., reported in 1996 (87) E.L.T. 321. We also take into consideration that in all like industries, the department has classified the product under Chapter 9.
10. In view of the submissions made, the prayer for remanding the matter is justified and therefore we set aside the impugned order in both the appeals and the matter is remanded to original authority who shall reconsider the prayer of the appellants in the light of Board’s circular and the effect of the amendment in the light of Supreme Court judgment rendered in Wood Craft Products Ltd. [Supra]. The original authority shall decide the matter expeditiously as the issue has got recurring effect. The authorities shall also reconsider the prayer pertaining to non-applicability of larger period in the matter in view of the understanding gathered by appellants in terms of Board’s circular referred to by them and large number of industries having their classification list in respect of the same product approved under Chapter 9 in terms of Commissionerate’s practice. Both the authorities shall give full opportunity of hearing to the appellants to submit their case when hearing is granted to them.
11. Thus, the appeals are allowed by remand.