Neon Ltd. classified one of the products manufactured by it as per the Central Excise Tariff Act, 1985 as a 'nil' rate product. The excise department classified the same product under another heading attracting 11% duty
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2016
Neon Ltd. classified one of the products manufactured by it as per the Central Excise Tariff Act, 1985 as a 'nil' rate product. The excise department classified the same product under another heading attracting 11% duty as per Harmonised System of Nomenclature (HSN) for the purpose of classification of the impugned product. But, the entries in the HSN and the Central Excise Tariff Act, 1985 are not aligned. Give your opinion on this matter of classification with the help of a decided case law.
Answer & Explanation:
The Central Excise Tariff Act, 1985 is based upon HSN, but it is not a copy of HSN. In the case of Camlin Ltd. v/s CCEX Mumbai (2008) 230 ELT 193 (SC) the Apex Court ruled that when there is difference in the classification of any product between the entries of HSN and the Excisable Tariff, the classification as per the Central Excise Tariff Act, 1985 should be taken for the levy of excise duty. The department cannot rely upon HSN for classification. Therefore, the classification made by the department under HSN is not valid as per the law.
Topics: Indirect Tax
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