2024-VIL-228-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Appellant classified Packaged Drinking Water under CETH 22019090 – Department though does not dispute the classification but contend that the said goods would fall under ‘Mineral Water’ so as to come within the purview of abatement Notification No.2/2006, 14/2008 and 49/2008 – Whether the Packaged Drinking Water is to be assessed under Section 4A of the Central Excise Act, 1944 or under Section 4 on the basis of transaction value – HELD - A product has to be classified on the basis of Tariff Act and not on the basis of the notifications. The present notifications are Central Excise Notifications giving the details of abatement in regard to valuation of goods under Section 4A of the CEA, 1944. Merely because the chapter heading, sub heading has been mentioned in Col. 2, the goods cannot be said to be assessed under Section 4A unless the goods also fall under the description given in Col.3 - in Column 3 of Notification No.2/2006, 14/2008 and 49/2008, the description of goods is given as ‘Mineral Water’ only - The Packaged Drinking Water is entirely different product falling under separate chapter sub-heading. Further, the price of Packaged Drinking Water is less than the price applicable to Mineral Water - The valuation of the product has to be based upon the classification of the product. When the classification unambiguously falls under 22019090 the valuation has to be on transaction value as per Section 4 of Central Excise Act, 1944. Merely because the abatement notification mentioned heading 22019090 in column (2) it cannot be said that the Packaged Drinking Water is included in the Mineral Waters - In Notification 49/2008, the Sl.No.24 referred to ‘Mineral Water’ and Sl.No.25 to ‘Aerated Water’. As per amendment brought forth in Notification 49/2008 w.e.f. 1.3.2015, a new Sl.No.25A was added which referred to ‘all goods except mineral water and aerated water’. This makes it clear, that ‘drinking water’ was never intended to be specified as goods to which Section 4A would apply - the duty demand cannot sustain and set aside – the appeal is allowed
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