PERFETTI VAN MELLE INDIA PVT. LTD. Vs. COMMISSIONER OF C. EX., DELHI-III
LAWS(CE)-2015-5-17
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on May 22,2015

Perfetti Van Melle India Pvt. Ltd. Appellant
VERSUS
Commissioner Of C. Ex., Delhi -Iii Respondents




JUDGEMENT

RAKESH KUMAR,J - (1.)THE facts leading to filing of this appeal are, in brief, as under:
1.1 The appellant are manufacturers of bubble gum chargeable to Central Excise Duty. The period of dispute in this case is from 25 -4 -2005 to 28 -2 -2006. There is no dispute that bubble gum contains sugar and is classifiable under Heading 1704 of the Central Excise Tariff pertaining to "sugar confectionary (including white chocolate) not containing cocoa". The dispute is only on the point as to whether during the above mentioned period of dispute, the bubble gum was eligible for duty exemption under Notification No. , dated 1 -3 -2002 (Serial No. 247). The exemption Notification No. (Serial No. 247) prescribed concessional rate of duty of 8% for "sugar confectionary (excluding white chocolate) not containing cocoa" falling under sub -heading 1704.90. During the period prior to 28 -2 -2005 when there was six digit Central Excise Tariff, the main Heading of 17.04 was "sugar confectionary (including white chocolate) not containing cocoa" and sub -heading 1704.10 of the Heading 1704 covered "gums, whether or not sugar coated including chewing gum, bubble gum and the like", the other sub -heading 1704.90 of Heading 1704 covered "other items of the Heading 1704." Thus, during period prior to 28 -2 -2005, sub -heading 1704.90 did not cover bubble gum and chewing gum and covered "sugar confectionary (including white chocolate) not containing cocoa which is other than the "gums whether or not sugar coated including chewing gum, bubble gums and like". Since exemption Notification No. (Serial No. 247) provided concessional rate of duty only for the goods of sub -heading 1704.90, and bubble gum was not covered under sub -heading 1704.90, the bubble gum was not covered for exemption under Notification No. (Serial No. 247). However, w.e.f. 28 -2 -2005, the old six digit tariff was replaced by the HSN based 8 digit tariff. In the 8 digit tariff also, while the Heading 17.04 covered the same goods as those covered by Heading 17.04 of the old six digit tariff, i.e., "sugar confectionary (including white chocolate) not containing cocoa", sub -heading 17041000 covered "chewing gum whether or not sugar coated" and thus, this sub -heading did not cover bubble gum. The sub -heading 170490 covered "other sugar confectionary (including white chocolate) not containing cocoa". Thus, in the new 8 digit Central Excise Tariff which came into force w.e.f. 28 -2 -2005, the bubble gum would be covered by the sub -heading 170490. But during period w.e.f. 28 -2 -2005, the Notification No. (Serial No. 247) continued to cover the "sugar confectionary (excluding white chocolate) not containing cocoa falling under subheading 1704.90". The appellant claimed exemption under this notification and accordingly made clearance of bubble gum during period from 28 -4 -2005 to 28 -2 -2006 at the concessional rate of duty of 8% ad valorem. The department, however, was of the view that even during the period w.e.f. 28 -2 -2005, the Notification No. , dated 1 -3 -2002 (Serial No. 247) must be read with the old six digit tariff in force during period prior to 28 -2 -2005 and in which Heading 170490 did not cover bubble gum. Accordingly, the department was of the view that during the above mentioned period of dispute, the bubble gum were not eligible for exemption under Notification No. (Serial No. 247). W.e.f. 1 -3 -2006, the Notification , dated 1 -3 -2006 (Serial No. 16) had replaced the old Notification No. (Serial No. 247) and the Serial No. 16 of the Notification also prescribed concessional rate of duty for "sugar confectionary (excluding white chocolate) not containing cocoa falling under Heading 1704.90". It is only by Notification No. , dated 4 -5 -2006 that Serial No. 16 of the Notification No. was amended and replaced by the entry "sugar confectionary (excluding white chocolate and bubble gum)". The contention of the appellant is that it is only w.e.f. 4 -5 -2006 that bubble gum would not be eligible for concessional rate of duty but during the period from 28 -2 -2005 to 3 -5 -2006, the same would be eligible for exemption Notification No. and its successor Notification No. It is in view of the above facts that after issue of show cause notice, the Commissioner vide order -in -original dated 28 -9 -2006 confirmed the duty demand of Rs. 5,55,11,317/ - against the appellant for the period from 25 -4 -2005 to 28 -2 -2006 along with interest on it under section 11AB and besides this, imposed penalty of equal amount on them under Rule 25(1)(d) of the Central Excise Rules, 2002. Against the above order of the Commissioner, this appeal has been filed.

Heard both the sides.

Shri B.L. Narsimhan, Advocate, the ld. Counsel for the appellant, pleaded that during the period of dispute, i.e., from 28 -2 -2005 to 3 -5 -2006, Notification No. (Serial No. 247) and its successor Notification No. (Serial No. 16) prescribed concessional rate of duty of 8 per cent ad valorem for "sugar confectionary (excluding white chocolate) not containing cocoa" and falling under sub -heading 170490; that during the period w.e.f. 28 -2 -2005, the old six digit, Central Excise Tariff had been replaced by the new 8 digit HSN based Central Excise Tariff and sub -heading 170490 covered bubble gum; that while during period prior to 28 -2 -2005, the sub -heading 170490 of the Central Excise Tariff covered "sugar confectionary other than chewing gum bubble gum and the like whether sugar coated or not" and thus, bubble gum was excluded from the sub -heading 170490, this was not so in the Heading 170490 of the new Central Excise Tariff w.e.f. 28 -2 -2005 as in the new Central Excise Tariff while Heading 170410 covered only "chewing gum whether or not sugar coated" the other sub -heading 170490 covered other sugar confectionary which would include bubble gum also, that the word "chewing gum" does not include "bubble gum" and "chewing gum" and "bubble gum" are two commodities and in this regard, he relies upon the judgment of the Tribunal in the case of Joyco India Private Ltd. v. CCE, Chandigarh reported in : 2002 (143) E.L.T. 593 (Tri. -Del); that the same view has been taken by the Tribunal in the case of Perfetti India Limited, Final Order No. 713/99, dated 20 -10 -1999; that when during period w.e.f. 28 -2 -2005; the exemption Notification No. (Serial No. 247) was not aligned with the Central Excise Tariff and during period w.e.f. 28 -2 -2005, the Heading 170490 covered bubble gum and Notification No. continued to prescribe concessional rate of duty to "sugar confectionery (excluding white chocolate) not containing cocoa falling under sub -heading 1704.90", the benefit of concessional rate of duty cannot be denied to the appellant. He, pleaded that it is only w.e.f. 4 -5 -2006 that the successor exemption Notification No. (Serial No. 16) was amended so to the exclude the bubble gum from the benefit of notification. He, therefore, pleaded that the impugned order is not correct and there is no justification for denying the exemption Notification No. to the clearances of bubble during period from 28 -4 -2005 to 28 -2 -2006.

(2.)SHRI M.S. Negi, ld. DR, defended the impugned order by reiterating the findings of the Commissioner in it. He pleaded that Entry No. 247 of the Notification No. specified concessional rate of duty of 8 per cent ad -valorem for the goods of 170490 as it existed prior to 28 -2 -2005 when Heading 170490 did not cover bubble gum and the bubble gum was covered by Heading 1704.10 only; that even though w.e.f. 28 -2 -2005, the old six digit Central Excise Tariff had been replaced by the 8 digit HSN based Central Excise Tariff and subheading 170490 of the Central Excise Tariff w.e.f. 28 -2 -2005 also covered bubble gum, the entry 247 of the Notification No. must be read only with sub -heading 170490 of the old Central Excise Tariff Act, i.e., the Tariff as it existed during period prior to 28 -2 -2005 and that it is totally wrong to read the Entry No. 247 of the Notification No. with the Heading 170490 of the Central Excise Tariff as it existed during period prior w.e.f. 28 -2 -2005. Shri M.S. Negi, therefore, pleaded that there is no infirmity in the impugned order.
(3.)WE have considered the submissions from both the sides and perused the records.
The period of dispute in this case is from 28 -4 -2005 to 28 -2 -2006 and the point of dispute is as to whether the clearances of bubble gum during this period were eligible for concessional rate of duty under Notification No. (Serial No. 247). Serial No. 247 of the Notification No. covered "sugar confectionery (excluding white chocolate) not containing cocoa" falling under sub -heading 170490. There is no dispute that bubble gum is "sugar confectionary (excluding white chocolate) not containing cocoa". However, the Serial No. 247 of the notification was applicable only to that sugar confectionary which was covered under Heading 170490. During the period prior to 28 -2 -2005, Heading 170490 did not cover bubble gum as the "gums whether or not sugar coated including Chewing gum bubble gums and the like were covered under Heading 170410 and accordingly Heading 170490 of the old tariff did not cover bubble gum. However, in the new 8 digit tariff in force w.e.f. 28 -2 -2005, there was change in the structure of Heading 1704 pertaining to "sugar confectionary (including white chocolate) not containing cocoa" and in this heading while subheading 170410 covered only "chewing gum whether or not sugar coated and as such bubble gum were not covered under the Heading 170410, the sub -heading 170490 covered "other sugar confectionary" and thus covered bubble gums. The point of dispute is as to whether the entry "sugar confectionary (excluding white chocolate) not containing cocoa and falling under sub -heading 170490" against Serial No. 247 of the Notification No. must be read with the Heading 170490 as it existed during period prior to 28 -2 -2005 as claimed by the department or it should be read with sub -heading 170490 as the same stood during the period w.e.f. 28 -2 -2005.

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