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2019 (6) TMI 1600 - AT - Central ExciseClassification of goods - “dant mukta” used in manufacture of “lal dant manjan” - classifiable under Chapter sub-head 33061010 or otherwise? - benefit of N/N. 02/2011–CE dated 01.03.2011 - extended period of limitation - penalty - HELD THAT:- The word ‘tooth powder’ has been taken away from the existing eight digit tariff and any kind of powder which is the preparation for oral or dental hygiene is held covered under Chapter heading 33061010 - Otherwise also, the Tribunal Mumbai in the case of ECO VALLEY FARMS & FOODS LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2013 (1) TMI 51 - BOMBAY HIGH COURT] has held that the amendment of tariff from six digit to eight digit regime was brought about with a view to covert the existing six digit entries in Schedule to the 1985 Act to eight digit entries on par with the entries in the Schedule to the Customs Tariff Act and not with a view to bring in new goods within the purview of excise. The said observation was based on the clarification under Notification No. 01/2005 dated 24.02.2005 and a subsequent Trade Circular No. 808 dated 25.02.2005 clarifying that the amendment of 2004 is merely a technical change of transition from six digit to eight digit classification with no substantive change to be brought in. In the present case, admittedly, the impugned product, i.e. the raw material/ intermediary product in manufacture of “lal dant manjan” (tooth powder), namely “dant mukta” has an essential character of “lal dant manjan”. Admittedly, it contains all such ingredients as are the ingredients for “lal dant manjan”. It is only one constituent, i.e., gairric powder which is being added to “dant mukta” for it to be finally called as “lal dant manjan”. There is no denial on record to the fact that “dant mukta” imparts the essential character to the final product ‘lal dant manjan’ and the garric powder which is found in a higher concentration in lal dant manjan does not contain any tooth cleansing property and it only acts as a carrier - this intermediary product is nothing but the tooth powder (under six digit regime) or powder for oral hygiene (under eight digit regime), classifiable under 330610/33061010 respectively. Applicability of Notification No. 02/2011–CE dated 01.03.2011 - HELD THAT:- The impugned product ‘dant mukta’ is entitled for benefit of the Notification. Denying the said benefit on the ground that it is not sold in packages for retail, is also not appropriate finding because the goods in packages of a kind sold by retail are not the only goods for holding 3303–3307. Rather Chapter Note 3 also uses the word ‘inter alia’, which as per the dictionary meaning is ‘amongst other things’. The word ‘inter alia’ in Chapter Note 3 is comprehensive in nature to include even the products sold in lump sum packages and also products sold in retail packages. Hence, irrespective ‘dant mukta’ is not sold in retail packages but in bulk packages, it is eligible for the benefit of concessional duty under Notification No. 02/2011 dated 01.03.2011 - Department has wrongly denied the benefit of the impugned Notification to product of the appellant called ‘dant mukta’. Extended period of limitation - Penalty - HELD THAT:- Department initiated the proceedings alleging ‘dant mukta’, an intermediary product of the appellant required to make ‘lal dant manjan’ has been mis-declared with an intent to evade payment of duty - In the present case, where it is already held that ‘dant mukta’ has rightly been declared as tooth powder/ powder meant for dental or oral hygiene. The alleged mis-declaration has already been set aside. It thus, becomes clear that there was no intention to act dishonestly so as to evade the payment of duty. Hence, the extended period of limitation could not be invoked. Otherwise also, the extended period of limitation is not invokable in the cases pertaining to classification as interpretational issue - Remaining demand for the period January, 2016 to January, 2017 though within the normal period of one year is also liable to be set aside, in view of both the questions for adjudication as framed to have been decided in affirmative i.e., in favour of the appellant. Appeal allowed - decided in favor of appellant.
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