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2016 (11) TMI 7 - AT - Central ExciseClassification of goods - Roop Amrit - Complete solution - cosmetic under heading 3304 or medicament under heading 3003? - Held that: - To classify a product under Central Excise tariff the first and foremost test should be the common parlance understanding, unless a specific definition is provided in the entry itself. It is nobody's case that the cosmetic or toilet preparations should not have curative property. Similarly, PP ayurvedic medicament may have incidental outcome of beauty enhancement. In such situation, it is necessary to go by the common parlance of the practice of trade - reliance placed on the decision of Puma Ayurvedic Herbal P. Ltd. vs. CCE [2006 (3) TMI 141 - SUPREME COURT OF INDIA] where it was held that cosmetic products are meant to improve the appearance of a person, whereas a medical product or a medicament is meant to treat some medical condition. The Hon’ble Supreme Court held that Puma Herbal Massage Oil (which is similar to complete solution) is not a medicament - products classified as cosmetic or toilet preparations, the valuation done under Section 4A of Central Excise Act, 1944 read with Notification No. 13/2002-CE (NT) dated 01.03.2002. Denial of SSI exemption - Held that: - the appellant-assessee had produced certificate from the local surpanch of the village which was cross verified by the jurisdictional Assistant Commissioner to ascertain the fact. In fact, the appellant-assessee also had a certificate issued by Tehsildar confirming that the factory is located in rural area. As such, we find that denial of SSI exemption to the appellant on this ground is not sustainable. Extended period of limitation - Held that: - no justification for the alleged bonafide belief. No verification or enquiry has been made by the appellant with the jurisdictional Central Excise officer regarding the correct classification or duty liability while they have taken efforts to get the registration certificate from the Drug Controller etc. It is not clear as to type of effort regarding clarifying the excise duty liability - bonafide belief alone cannot be the ground for not invoking demand for extended period. Imposition of penalties on partners - Held that: - since penalty of equal to duty amount has been imposed on the firm, there is no justification to impose penalty on the partners of the firm. In any case, we note that penalty imposed on the partners have been set-aside by the Commissioner (Appeals) in his order dated 20.12.2007. As such, the penalties on partners are liable to be set-aside. Appeal disposed off - decided partly in favor of appellant.
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