TMI Blog2004 (6) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... tended time under proviso to Section 11A of the Central Excise Act, 1944. A penalty of Rs. 2,50,29,984/- was also sought to be imposed. Confiscation of land, building, plant and machinery was proposed under Rule 173Q. There was also a demand of interest under Section 11AB. 3.The demand under the first show cause notice was in respect of moulding powder prepared by the assessee and consumed captively in the manufacture of exempted final products during the period from October 1996 to March 1997. Under the 2nd show cause notice apart from the allegation that the appellant had not discharged duty on the moulding powder it was further alleged that the assessee had incorrectly declared rockers, swings, play pool, baby chairs, baby desk tables, play table etc. as children toys and cleared the same under Heading 95.03 without payment of duty. According to the department, the goods were to be classified under 95.06, 94.01, 94.03 and 3922.10 and therefore, chargeable to duty. The assessee submitted detailed reply to the show cause notices. They contended that moulding powder produced by them were not marketable and therefore, would not be goods in terms of Section 2 of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6.In Appeal No. E/l210/2004 filed by the assessee challenge is against the order passed by the Commissioner (Appeals) dated 6-3-2004. In the above appeal, the Revenue has filed a cross objection as E/l47/2004. The Revenue has also filed a separate appeal as E/2360/2004 challenging that part of the order of the Commissioner (Appeals) by which the Revenue is aggrieved. The demand involved in this appeal is also in respect of the very same items as in Appeal No. E/1221/2004. The Commissioner (Appeals) took the view that Baby Swing/Flier, Rocker and Slides were wrongly classified by the original authority under 9506. According to the Commissioner (Appeals) the assessee had correctly classified them under 95.03. As far as Chairs, Tables, Desks, School equipments are concerned, Commissioner (Appeals) upheld the classification approved by the original authority under 9401/9403 while rejecting the claim of the assessee to classify them under 9503. In respect of Play Pool the Commissioner (Appeals) was inclined to accept the classification made by the assessee under 9503 as correct. He did not agree with the classification under sub-heading 3922.10 as bath tub approved by the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical exercise, sports, etc.? (2) Whether the play pool is classifiable under Heading 9503 as toys or under Heading 3922 as bath tub? Whether the demand of duty can be sustained on the basis of any tariff entry or heading other than that proposed in the notice? (3) Whether the play table, activity desk and chair, etc. are classifiable under Heading 9503 as toys or under Headings 9401 and 9403 as seats and other furniture ? (4) Whether the demand of duty under show cause notice dated 4-11-97 which is the subject matter of Appeal No. E/1221/2004 is barred by limitation ? (5) Whether the imposition of mandatory penalty as also demand of interest is justified ? (6) Whether the quantification of duty is appropriate ? The relevant Chapter Headings for classification of the goods involved in these appeals are as follows :- Toys, Games and Sports Requisites, Parts and Accessories thereof - Heading No. Sub-heading No. Description of goods Rate of duty (1) (2) (3) (4) 95.01 9501.00 Wheeled toys designed to be ridden by children (for example, tricycles, scooters, pedal c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration was made by the Commissioner. The appellant had produced certificate of Toy Association of India which is a trade association representing manufacturers, dealers, distributors, etc. of toys. They have confirmed that these items are known in the trade as toys and have been displayed at toy exhibitions. Similar certificates have been produced from the distributors, retailers and the Sports Goods Export Promotion Council certifying that these items qualify as toys. The appellant also points that that the Customs authorities are also treating these goods as toys for the purpose of assessment under the Customs Tariff Act. In support of the above contention reliance was placed on Bill of Entry No. 600795, dated 11-3-2004. The appellant had produced photographs and catalogue of the subject goods. 12.It is the contention of the Revenue that rockers, swings etc. are equipments of a kind used in children's playground. They are covered under Heading 9506 of HSN, The swings/slides manufactured by the assessee can be placed outside as well as inside and serve as equipments for games. They are of highly durable nature. In play schools where there is sufficient space outside the buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, describes these articles as such. It is a settled law that the diverse products under a taxing statute are required to be classified according to the meaning assigned to those products by the trade or the common man. Since the impugned products are traded by their respective names, i.e. as "Rockers, Slides, Swings (Toddler Swings/Fun Flier), and are also used as such; I find that the facts, and the evidence contained in invoices issued by the dealer, imbibe no ambiguity to reveal that impugned products are known to the trade, as well as the users (common man), by their respective names, and not as "Toys"......I find that Note (B) under Heading 95.03 in Harmonized Notes clarifies as to what can be treated as reduced size model. On going through that Note (B), I find that for being called a reduced size model, an item should be replica of real article or thing, created for creation only and not for performing the functions of real (genuine) article or thing. In this case, the facts and evidence clearly show that impugned goods are meant to perform their respective functions. I thus, find that to describe the same as "reduced size model" was legally incorrect and hence a mis-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and swings and not as toys, it cannot be classified under 9503. The reasoning of the Commissioner that the subject goods are meant not only for outdoor games but also meant for general physical exercise and other sports for the children is totally unacceptable. The appellant-assessee had pointed out that the products of M/s. Arihant are of much larger size and used in playgrounds and therefore, they are classified under 9506. It cannot be compared to the subject goods produced by the appellant. On the other hand, they have made out a point in their favour referring to the Bill of Entry dated 11-3-2004. 15.Taking into consideration the entire materials produced before us by the assessee-appellant including certificates issued by Toys Association of India, Sports Goods Export Promotion Council and other documents referring to the trade understanding of the goods as toys, we are inclined to take the view that the above subject goods are to be classified under 9503 and not under 9506. In order dated 6-2-2004 passed by the Commissioner (Appeals) in relation to a different period of demand relating to identical goods classification of the above subject items was made under 9503. We ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a kind which children play with like doll's furniture etc. She pointed out that Note (A)(12) under Heading 95.03 HSN reference is made to Dolls' houses and furniture, including bedding. According to her it is such type of furniture that can be treated as toy furniture which is excluded from Chapter 94. Reliance was also placed on meaning of the term 'furniture' given in HSN under Chapter 94 as follows :- "(A) Any 'movable' articles (not included under other specific headings of the Nomenclature), which have the essential characteristic that they are constructed for placing on the floor or ground, and which are used, mainly with a utilitarian purpose, to equip private dwellings, hotels, theatres, cinemas, offices, churches, schools, cafes, restaurants, laboratories, hospitals, dentists' surgeries, etc., or ships, aircraft, railway coaches, motor vehicles, caravan-trailers or similar means of transport. (It should be noted that, for the purposes of this Chapter, articles are considered to be 'movable' furniture even if they are designed for bolting, etc., to the floor, e.g. chairs for use on ships). Similar articles (seats, chairs, etc.) for use in gardens, squares, promenades, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 'it is a pool where you can enjoy a cool dip within the privacy of your house and it is just right for your family'. It is contended on behalf of the assessee-appellant that the play pool is essentially for the purpose of play by the children. The affidavits of users and certificates from persons in the trade are produced to show that the item is not used as a bath tub and is known in the trade as a toy. An international catalogue called Rotational moulding was also relied on where the play pool has been described as a toy. Therefore, according to the appellant in commercial parlance, this item is known as a toy. It is further contended that Note 1 to Chapter 39 excludes products of Chapter 95 from the scope of Chapter 39. Therefore, play pool cannot be classified under 3922. The learned Counsel for the assessee-appellant would further submit that if this Tribunal comes to a conclusion that the play pool cannot be brought under 3922, as claimed by the Revenue in the show cause notice, the adjudication order passed on the basis of the classification proposed in the show cause notice has to be set aside. Revenue cannot be permitted to sustain the demand by proposing alternate head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be treated as bath tub coming under 3922.10 in HSN under 3922 covering baths, shower-baths etc. it is mentioned that this heading covers fittings designed to be permanently fixed in place, in houses, etc., normally by connection to the water or sewage systems. It also covers other sanitaryware of similar dimensions and uses, such as portable bidets, baby baths and camping toilets. We are not able to accept the view taken by the Commissioner that the play pool in question would come under 3922.10. We are also not in agreement with the classification under Heading 9506 of the Central Excise Tariff Act, 1985. The above Heading reads as follows :- "9506 - Articles and equipment for general physical exercise, gymnastics, athletics, other sports (including table tennis) or outdoor games, not specified or included elsewhere in this Chapter." We are of the view that the product, play pool cannot be treated as a equipment for physical exercise, gymnastics or other sports or outdoor games of any kind. 23.According to us, more appropriate Heading would be 3926 i.e. other articles of plastics. There is no merit in the contention that Chapter Note 2(u) of Chapter 39 would stand in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the proceedings under challenge in Appeal No. E/1221/2004 was issued invoking extended period of limitation. It is contended on behalf of the appellant-assessee that on 22-10-92 they filed classification list declaring the goods as "baby rocker toy", "baby slide", "baby chair toy". The proper officer duly approved the classification list. Further classification lists were also filed giving the exact description of the goods. In order to invoke the extended period of limitation the ground given by the Revenue is that the appellant misdeclared the goods in the classification list by prefixing the word "baby" and suffixing the word "toy" to the actual description of the goods. The assessee submits that the goods were described by their true respective names. Apart from the above there is no dispute that these items are designed for the use of babies and small children. They are known in the trade as toys. Therefore, there is no justification in contending that the appellant had misdeclared the description of the items in the classification list and got them approved in a deceptive manner with the intention to evade duty. After going through the records regarding the classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is on the basis of the findings in the remand order dated 18-7-2000. In the above order Tribunal had held that invoking larger period in the case of moulding powder was justified. We, therefore, do not interfere with this part of the order dated 20-4-2004. It is relevant to note that the order dated 18-7-2000 is before the Hon'ble Supreme Court in the appeal filed by the assessee, but there is no order of stay. 27.The five show cause notices relating to Order-in-Appeal No. 81/2004 dated 6-2-2004 passed by Commissioner (Appeals) which is under challenge in Appeal Nos. E/1210/2004 and E/2360/2004 had been issued within the normal period. Therefore, the issue of limitation does not arise in these appeals. But, we are in full agreement with the view taken by the Commissioner (Appeals) on the maintainability of the demand of interest under Section 11AB and imposition of penalty under Rule 173Q. We also affirm the view taken by the Commissioner (Appeals) on the issue of classification of rockers etc. and the play table, activity desk and chair, but we disagree with his view on the classification of play pool under 9503. We, therefore, modify the order impugned to the above extent and d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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