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Showing 341 to 360 of 509 Records
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1998 (8) TMI 181
Issues involved:
Classification of EXO Gas under sub-heading 2804.90 or S.H. 3823.00 of the Schedule to the Central Excise Tariff Act.
Detailed Analysis:
The appeal filed by the Revenue raised the issue of the classification of EXO Gas under sub-heading 2804.90 or S.H. 3823.00 of the Central Excise Tariff Act. The Respondents claimed that the gas, consisting of Nitrogen, Carbon dioxide, and other gases, is essential for manufacturing insoluble sulphur. The Additional Collector classified the gas as Nitrogen, applying relevant rules and extending benefits of a specific notification. The Revenue argued that the gas, being a residual product, should be classified under Heading 38.23. They also contended that the show cause notice was valid due to deliberate suppression by the Respondents. On the other hand, the Respondents maintained that the gas was primarily Nitrogen with impurities and exempt under a notification. They argued against the time-barred show cause notice, stating the product was captively consumed and not excisable.
The central issue revolved around whether the EXO Gas manufactured by the Respondents should be classified as Nitrogen Gas or not. The original authority classified it as Nitrogen due to its use as a blanketing agent and its composition. The Department sought classification under S.H. 3823.00 based on Chapter 28's Note 1, which applies to separate chemical elements and compounds. The judgment referenced technical literature on Nitrogen production methods and uses in various industries. It noted the manufacturing process involving burning atmospheric air to obtain gas for inert cover in manufacturing insoluble sulphur. The Respondents claimed the gas was commercial Nitrogen with impurities, emphasizing technical aspects and lack of contrary technical evidence from the Revenue. The Commissioner (Appeals) approved the classification under sub-heading 2804.90, finding the Revenue failed to prove otherwise. Consequently, the appeal by the Revenue was dismissed.
In conclusion, the judgment analyzed the classification issue of EXO Gas extensively, considering technical aspects, production methods, and usage. It emphasized the burden of proof on the Revenue, which was not met, leading to the classification under sub-heading 2804.90. The decision highlighted the importance of technical evidence and adherence to classification rules in excise matters, ultimately upholding the classification approved by the Commissioner (Appeals) and rejecting the Revenue's appeal.
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1998 (8) TMI 180
Issues: Classification of imported goods described as "Alloy steel bars of Grade Thyrotherm 2344 EFS in forged, annealed and premachined condition" under tariff sub-headings 7228.40 and 7228.60.
Classification under Tariff Sub-Heading 7228.40:
The question involved in the appeal was the classification of the imported goods described as "Alloy steel bars of Grade Thyrotherm 2344 EFS in forged, annealed and premachined condition." The lower authorities classified the product under tariff sub-heading 7228.40, which covers "other bars and rods, not further worked than forged." The appellant argued that this sub-heading only applies to bars that are solely forged and not further worked. The appellant pointed out that the goods were not only forged but also peeled, as indicated in the test reports accompanying the invoices.
Interpretation of Explanatory Notes:
The appellant drew attention to the Explanatory Notes under Chapter 72 and Heading 72.28, emphasizing that subsequent manufacturing and finishing operations, such as peeling, could change the classification of the goods. The appellant argued that peeling is a machining process that alters the classification, unlike annealing, which only eliminates oxidation scale and crust. Therefore, the appellant contended that the goods should be classified under tariff sub-heading 7228.60, which covers "other bars and rods."
Argument Based on Invoice Description:
The JDR representing the respondent contended that the description in the invoice, stating the goods as forged, annealed, and premachined, should be given more weight than the test reports. The JDR argued that the test reports were internal documents of the manufacturer/supplier and might not accurately reflect the nature of the goods. The JDR highlighted that the lower authorities were not informed about the peeling aspect of the goods, making it inappropriate to consider it at the appellate stage.
Judgment and Decision:
After considering both parties' arguments, the Tribunal agreed with the respondent's representative that the description in the invoice and bill of entry should be considered more reliable than the test reports. The Tribunal noted that the issue of peeling was not raised before the lower authorities and, being a question of fact, could not be introduced at the appellate stage. Therefore, the Tribunal upheld the lower authority's classification under sub-heading 7228.40, as the imported goods were determined to be only forged and not further worked. Consequently, the appeal was dismissed.
This detailed analysis of the judgment highlights the key arguments presented by both parties, the interpretation of relevant legal provisions, and the Tribunal's decision based on the facts and legal principles involved in the classification of the imported goods under specific tariff sub-headings.
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1998 (8) TMI 179
Issues:
1. Exemption under Notification No. 48/77 for clinical samples
2. Classification of medicaments under sub-heading 3003.20
Exemption under Notification No. 48/77 for Clinical Samples:
The case involved appeals by both the Revenue and the Assessee regarding the denial of exemption under Notification No. 48/77 for clinical samples of P or P Medicine. The Assistant Commissioner disallowed the exemption due to missing printed words on the packing and incorrect calculation of clearance quantity. On appeal, the Commissioner upheld the denial based on the value calculation but considered the printed words requirement as a minor objection. The Tribunal agreed with the Commissioner that the phrase "Samples not for sale" sufficed for the condition, rejecting the Revenue's appeal. It also ruled that the value of clearance under another notification had to be considered for calculating the limit of duty-free samples, allowing the Assessee's appeal.
Classification of Medicaments under Sub-heading 3003.20:
The Revenue challenged the classification of medicaments under sub-heading 3003.20 based on the presence of a symbol on the packets. The Tribunal noted that the symbol indicated a connection to the company, making the medicament proprietary and not falling under the sub-heading for non-patent or proprietary medicaments. As the symbol was present on the packet, the medicament could not be classified under sub-heading 3003.20. Consequently, the Revenue's appeal was allowed regarding the classification of the medicaments.
In conclusion, the Appellate Tribunal allowed the appeal filed by the Assessee regarding the exemption under Notification No. 48/77 for clinical samples and partially allowed the Revenue's appeal concerning the classification of medicaments under sub-heading 3003.20. The judgment clarified the conditions for exemption and the significance of markings on the packaging for classification purposes, providing detailed reasoning for each issue addressed in the case.
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1998 (8) TMI 178
The case involved classification of PVC printed pictures. Appellate Tribunal upheld the classification under Heading 4901.90 as approved by the Commissioner (Appeals). The appeal filed by the Revenue was rejected.
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1998 (8) TMI 177
The Appellate Tribunal CEGAT, New Delhi allowed the appeal and remanded the case to the Lower Appellate Authority for determining whether the original authority rightly rejected the application for registration of the contract under the Project Import Regulations, 1986. The Tribunal found that the mere fact that the goods had been cleared did not disqualify the appellants from availing the benefits of the Regulations.
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1998 (8) TMI 176
The Appellate Tribunal upheld the order of the Collector of Central Excise, denying classification of medicines under CET sub-heading 3003.10 due to lack of brand name on labels. The tribunal rejected the appeal as the labels did not establish a connection in the course of trade between the medicines and the manufacturer.
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1998 (8) TMI 175
Issues:
1. Entitlement to claim discount on the cost of jars in packaging.
2. Consideration of durability and returnability of packaging.
3. Inclusion of cost of glass jars in assessable value.
4. Application of Section 4(4)(d)(i) of the Central Excise Act, 1944.
5. Interpretation of primary packing and its value in assessable value.
6. Relevance of judgments in determining the assessable value.
7. Dispute regarding the returnability of glass jars.
8. Argument of unjust enrichment and applicability of Section 11B of the CEA, 1944.
Analysis:
1. The main issue in this appeal is whether the appellants are entitled to claim a discount on the cost of jars used for packaging the product Bournvita. The question revolves around the applicability of Section 4(4)(d)(i) of the Central Excise Act, 1944, which allows for a deduction on packaging that is durable and returnable. The appellants argue that they should receive a refund of duty paid on the glass jars as they are durable, even though they are not returnable.
2. The Collector (Appeals) considered the issue and concluded that the glass jars, being primary packing, should be included in the assessable value of the final product. He emphasized the importance of packing for marketing the goods and cited relevant case laws to support his decision. He also highlighted that both durability and returnability should be satisfied for the packaging to qualify for an abatement under Section 4(4)(d)(i).
3. The appellants contended that the cost of packing of durable nature should be excluded based on precedents set by the Hon'ble Supreme Court in previous cases. However, the Departmental Representative argued that the glass jars, being essential for selling the product, should be included in the assessable value. The value of the glass jars, borne by consumers, was considered excludable.
4. The Tribunal analyzed the judgments of the Hon'ble Supreme Court in various cases, including the definition of primary packing and its inclusion in the assessable value. It was established that the cost of primary packing should be added to the assessable value, as confirmed by the Supreme Court in previous decisions.
5. The dispute over the returnability of the glass jars was a crucial point of contention. While the appellants claimed there was an agreement for returnability with wholesale dealers, the Collector (Appeals) and the Tribunal found that the glass jars were not being returned to the assessee, leading to the inclusion of their cost in the assessable value.
6. The issue of unjust enrichment was raised, with the Collector (Appeals) accepting the appellants' argument regarding the non-applicability of an amended section of the CEA, 1944. However, the Tribunal upheld the decision to include the cost of the glass jars in the assessable value, ultimately rejecting the appeal based on the established legal principles and precedents.
7. In conclusion, the Tribunal affirmed the decision of the Collector (Appeals) and rejected the appeal, emphasizing the importance of including the cost of primary packing, such as glass jars, in the assessable value of the final product as per the provisions of the Central Excise Act, 1944 and the interpretations provided by the Hon'ble Supreme Court in relevant cases.
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1998 (8) TMI 174
Issues:
Classification of Thymol Crystals-IP, Thymo Crystalline Powder-IP, and Terpineol-BPC under Chapter 29 of the Schedule to the CET 1995 for concessional rate of duty based on Notification 31/88-C.E., dated 1-3-1988 without end use certificate.
Analysis:
The appellants manufactured products falling under Chapter 29 of the Schedule to the CET 1995 and claimed approval as bulk drugs under Notification 31/88-C.E., dated 1-3-1988. The Assistant Collector approved their classification lists subject to the production of an end use certificate. However, during assessment, it was discovered that the appellants had cleared the products without providing the end use certificate. Consequently, show cause notices were issued, and the Assistant Collector held that the concessional rate of duty was not applicable due to the absence of the end use certificate. The Collector (Appeals) upheld this decision, leading to the current appeal.
The notification in question, 31/88, exempts certain goods falling under Chapter 28, 29, or 30 of the Schedule to the Central Excise Tariff Act, 1985, from excess duty. The Table under the notification specifies the description of goods and the corresponding rates of duty. The appellants argued that the notification does not mandate the production of an end use certificate, contrary to earlier notifications for bulk drugs. Citing precedents, including the case of Collector of Central Excise v. Maize Products, it was established that Notification 31/88 does not require an end use certificate. The objection raised regarding the definition of "bulk drugs" under the Drugs (Prices Control) Order, 1987 was dismissed as the show cause notices did not challenge the products' classification as bulk drugs, and the approved classification lists were under Chapter 29. The contention that the products might not fall under the definition of "bulk drugs" was also refuted. Consequently, following the Tribunal's decision in the Maize Products case, the impugned order was set aside, and the appeal was allowed.
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1998 (8) TMI 173
Issues involved:
- Interpretation of Notification No. 49/87 regarding benefit availability for gum coated paper.
- Application of Note 7 to Chapter 48 in H.S.N. for determining the form of the paper.
- Distinction between "reel" and "roll" forms of paper as per I.S.I. Specification.
- Examination of whether the impugned paper was in reel or roll form.
Analysis:
The primary issue in the appeal was the eligibility of M/s. Shree Vindhya Paper Mills Ltd. for the benefit of Notification No. 49/87 concerning gum coated paper. The appellant undertook gum coating on stamp base paper and claimed the benefit based on the exclusion of "gummed or adhesive paper in strips or rolls" from the notification. The Department argued that the product exceeded 15 cms in width, classifying it as a roll under Note 7 to Chapter 48 in H.S.N., thus not qualifying for the exemption.
The appellant's representative highlighted the absence of Note 7 in Chapter 48 of the Central Excise Tariff Act, citing precedents where statutory notes were not used for interpretation. Referring to relevant cases, it was argued that if the gummed paper was cleared in reels, the benefit of the notification applied. Additionally, it was emphasized that the impugned product was only supplied in reel or sheet form, meeting the notification's condition.
In the judgment, the Tribunal considered the definitions of "reel" and "roll" as per I.S.I. Specification, distinguishing between a continuous web wound on a core (reel) and a continuous strip rolled around itself without a core (roll). It was concluded that the Collector (Appeals) erred in categorizing any paper in a form other than sheet as a roll. As the appellant supplied the product in sheet or reel form, the prohibition in the notification did not apply, making them eligible for the benefit.
The final decision allowed the appeal, emphasizing that the impugned product's form met the criteria for exemption under Notification No. 49/87, thereby overturning the Collector (Appeals) decision based on the incorrect interpretation of the form of the paper.
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1998 (8) TMI 172
Issues:
Dispensation of duty and penalty under Section 35F for the applicant/appellant firm regarding imported granules under advance license without duty payment.
Analysis:
The applicant firm sought dispensation of duty and penalty amounting to Rs. 84,82,481.00 and Rs. 8.00 lakh, respectively, under Section 35F. The firm manufactured plastic blow moulded containers using HDPE granules procured from various sources. The dispute arose regarding imported granules cleared under advance license without duty payment. The firm argued that as their final product was exempted from duty under specific notifications, the condition of payment of duty on inputs was satisfied. They relied on legal precedents to support their claim that nil rate duty on inputs constitutes "duty paid." The firm requested unconditional dispensation of pre-deposit and stay of recovery.
The Department opposed the firm's contentions, emphasizing that granting double benefits to the firm for importing goods under nil duty and claiming exemption on final products was unjustifiable. The Department highlighted the distinction that the raw materials were imported under advance licenses in this case, unlike the cases cited by the firm.
The Tribunal analyzed the Notification No. 14/92 conditions, focusing on the requirement that duty must be paid on inputs used in manufacturing final products. The key issue was whether nil duty on imported inputs fulfills the duty payment condition. Citing the Supreme Court's decision in a similar case, the Tribunal concluded that even nil duty on inputs under an exemption notification constitutes payment of appropriate duty. The Tribunal interpreted the term "additional duty of Customs leviable" to include cases where nil duty is paid on raw materials. Consequently, the Tribunal favored the applicant/appellant firm, dispensing with the duty demand and penalty imposed, and stayed the recovery during the appeal process.
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1998 (8) TMI 171
The Appellate Tribunal CEGAT, New Delhi allowed the appeal regarding Modvat credit on Steam Jointing Sheets and Hydrogen Peroxide. The appeal was disposed of with permission to take Modvat credit on Steam Jointing Sheets and transfer the credit on Hydrogen Peroxide to the proper register. The stay application was also disposed of accordingly.
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1998 (8) TMI 170
Issues:
Rectification of mistake on the face of the record regarding the reversal of Modvat credit for the value of empty drums.
Analysis:
The judgment pertains to an application for rectification of a mistake in Final Order No. E/3/94, dated 22-12-1993, concerning the reversal of Modvat credit for the value of empty drums. The appellant contended that two mistakes were apparent in the order. Firstly, the failure to consider a relevant case law from the West Regional Bench of the Tribunal at Bombay, and secondly, the order went beyond the scope of the show cause notice by deeming the empty drums as scrap and imposing duty on them under Rule 57F(4). The appellant argued that this issue was not raised in the show cause notice, thus constituting a mistake.
The respondent argued that the case law from M/s. IOL was submitted after the hearing was over and before the order was pronounced, suggesting that it was not necessary for the Tribunal to consider this additional argument. However, the Tribunal disagreed, stating that the matter remains open for consideration until the order is pronounced. Moreover, upon reviewing the show cause notice, it was evident that the issue of treating the empty drums as scrap and imposing duty was not raised directly or indirectly, supporting the appellant's contention of a mistake on the face of the record.
The Tribunal concluded that the decision of the West Regional Bench in the case of M/s. IOL should have been considered, as it was a precedential Court. Since the order did not address this case law or the issue of dutiability of the drums as scrap, and it extended beyond the scope of the show cause notice, the order was deemed to contain mistakes. Consequently, the Tribunal found merit in the appellant's contentions and ordered the reconsideration of the order as per the law. The appeal was scheduled for a rehearing on a specified date.
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1998 (8) TMI 169
Issues:
1. Determination of assessable value of goods consumed captively under Rule 6(b)(ii) of the Central Excise Valuation Rules.
Analysis:
The judgment revolves around the issue of how to calculate the assessable value of goods consumed captively under Rule 6(b)(ii) of the Central Excise Valuation Rules. The dispute arose regarding whether the profit earned by the steel drum plant attached to a company should be considered or if the profit of the company as a whole is relevant. The Collector (Appeals) held that the profit of the company, being a juristic person, is crucial. However, the appellant argued that the net profit, not the gross profit, should be added, citing a Board's Order and principles of accountancy. The appellant contended that depreciation should not be included in the profit calculation. The Tribunal's decision in a similar case was also referenced, emphasizing the need to re-examine profit margins without linking them to the end product. Ultimately, the matter was remanded to the original authority to decide whether gross profit or net profit should be added to the assessable value.
The key contention from the appellant's side was that net profit, not gross profit, should be considered for calculating the assessable value. They argued that the authorities should have added the profit before tax, which accounts for interest and depreciation, rather than gross profit. The appellant relied on a Board's Order and a book on accountancy to support their stance. Additionally, they highlighted a Tribunal decision that emphasized the exclusion of depreciation in profit calculations. The appellant's position was clear that depreciation should not be factored in while determining the profit margin.
On the other hand, the respondent submitted that the issue presented before the authorities differed from the arguments made before the Bench. They suggested that the matter should be referred back to the lower authorities for reconsideration. However, the Bench found that the core issue of whether gross profit or net profit should be added to the assessable value was not addressed by the lower authorities. Consequently, the impugned order was set aside, and the case was remanded to the original adjudicating authority for a fresh decision on this specific issue. The appeal was allowed on the grounds of remand, focusing on the determination of whether gross profit or net profit should be included in the assessable value calculation.
In conclusion, the judgment primarily dealt with the interpretation of Rule 6(b)(ii) of the Central Excise Valuation Rules concerning the assessable value of goods consumed captively. The dispute centered on whether gross profit or net profit should be added to the assessable value calculation. The appellant argued for the inclusion of net profit, citing relevant legal provisions and principles of accountancy, while the case was remanded to the original authority for a fresh decision on this specific issue.
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1998 (8) TMI 168
Issues:
Whether refractory containers comprising pillars, bases, setting, and bats are entitled to the benefit of Notification No. 217/86-C.E.
Analysis:
The main issue in this case is whether the product described as refractory containers falls under the excluded category of inputs as mentioned in Notification No. 217/86-C.E. The lower authority held that these containers are covered by the excluded category of 'appliances and equipment,' thus denying the benefit of the notification to the appellant. The appellant, represented by Shri M. Venkataraman, argued that refractory containers do not fall under the category of appliances or equipment. He relied on a judgment from the Calcutta High Court to support his argument. Venkataraman contended that refractory containers do not draw energy or produce any work or result, and they do not perform a complete function. He emphasized that these containers are merely separate parts assembled for stacking raw tiles and should be considered inputs entitled to the notification's benefit.
The JDR, Shri R.S. Sangia, opposed this argument, stating that the refractory containers function as containers for raw tiles, enabling the manufacturing process of glazed tiles. He argued that without these containers, the raw tiles could not be stacked or baked properly. However, upon careful consideration of both sides' arguments, the Tribunal observed that the refractory containers, comprising separate parts like pillars and bases, do not function as containers by themselves. These parts are consumed during the baking process and are akin to raw tiles in terms of being manufacturing inputs. The Tribunal concluded that the containers do not qualify as equipment or appliances and are therefore entitled to the benefit of Notification No. 217/86-C.E. Consequently, the Tribunal allowed the appeal and set aside the lower authority's decision, granting the appellant the consequential relief.
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1998 (8) TMI 167
The case involved the classification of a coupling imported by the appellants for use in connecting drive shaft with fuel injection pump of a petrol engine. The Collector of Customs held that the couplings should be classified under Chapter 87, but the tribunal disagreed. The tribunal ruled in favor of the appellants, classifying the goods under Tariff Heading 84.83 as an integral part of engines or motors.
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1998 (8) TMI 166
The Appellate Tribunal CEGAT, New Delhi ruled in favor of the appellant regarding the import of a super finishing machine. The machine, capable of achieving 0.03 Ra, was deemed eligible for benefits under Notification No. 154/86-Cus. The Tribunal dismissed the Revenue's appeal, stating that the machine's capability to achieve the specified finish range satisfied the notification's terms.
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1998 (8) TMI 165
Issues involved:
1. Availment of double benefit on inputs for products exported under Value Based Advance Licences.
2. Verification of Modvat credit quantum for exports under the Value Based Advance Licence Scheme.
Issue 1: Availment of double benefit on inputs for products exported under Value Based Advance Licences:
The appellants were required to deposit duty and penalty due to the violation of conditions under Notification No. 203/92-Customs for availing double benefit. They voluntarily debited a sum in their account as per the prescribed formula by the Government. The main contention was the need for detailed verification of the correct Modvat credit to be expunged based on actual data. The Assistant Commissioner of Central Excise had intimated the Customs House about the exports made under specified AR 4s, but actual verification was pending due to the unavailability of documentary evidence. The appellants provided details of inputs used for export products, but no further report was received, leading to the issuance of the impugned order-in-original.
Issue 2: Verification of Modvat credit quantum for exports under the Value Based Advance Licence Scheme:
The appellant's consultant argued that the order-in-original lacked specificity as it did not undergo the prescribed actual verification. They requested a remand for proper verification by the Central Excise department. The Revenue representative opposed, citing the lapse of time since the last communication. The Tribunal noted that the matter primarily involved factual verification based on existing data with the Assistant Commissioner of Central Excise. The appellants had already reversed certain amounts voluntarily. The Tribunal emphasized the need for proper verification as per the Government Circular dated 26-6-1997 for exports made before 31-1-1997. It was highlighted that the verification on an actual basis was pending due to the lack of detailed documentation readily available. The Tribunal directed the Assistant Commissioner to complete the verification and issue the necessary certificate for legal processing of duty exemptions for exports under the Value Based Advance Licence Scheme.
In conclusion, the Tribunal granted a waiver of the remaining duty and penalty, stayed the recovery, and remanded the matter for de novo consideration. The Assistant Commissioner of Central Excise was directed to promptly verify the data provided by the appellants and issue the required certificate. The Customs authorities were instructed to process the information contained in the certificate for further consideration. The appeal succeeded by way of remand, emphasizing the importance of timely completion of the entire procedure to serve the interests of both Revenue and the appellants.
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1998 (8) TMI 164
Issues: Correct classification of the product "Ghrit Kumari Tel" - under CET sub-heading 3003.30 as ayurvedic medicine or under CET sub-heading 3305.10 as perfumed hair oil.
Analysis:
1. The appellants initially classified the product under Tariff Item 68 but faced issues regarding the benefit of exemption under Notification 234/82-C.E. The Collector (Appeals) extended the benefit, which was upheld by the Tribunal. Later, the product was classified under Tariff Item 14F as perfumed hair oil, leading to a duty demand for clearances during a specific period.
2. Following a change in tariff, the appellants sought classification under CET sub-heading 3003.30, but the Assistant Collector upheld the classification under CET sub-heading 3305.10 based on previous adjudication and product advertising. The lower appellate authority confirmed this classification, prompting the appeal.
3. The product's composition includes various ingredients, and the appellants claimed it was prepared according to ayurvedic formula. However, they failed to substantiate this claim, and the argument proceeded without proof of preparation as per ayurvedic standards.
4. Referring to relevant case law, it was highlighted that ayurvedic medicines must be prepared according to formulations in authoritative texts on ayurveda. As the appellants couldn't demonstrate adherence to ayurvedic formulas, the product was deemed not an ayurvedic medicine under CET sub-heading 3003.30.
5. Considering the product's nature as a hair care item with a fragrant odor, it was correctly classified as a perfumed hair oil under CET sub-heading 3305.10 in line with Note 6 to Chapter 33 of the Schedule to the Central Excise Tariff Act, 1985.
6. Ultimately, the Tribunal ruled that the product falls under CET sub-heading 3305.10 as a perfumed hair oil, upholding the lower authority's decision and rejecting the appeal.
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1998 (8) TMI 163
Issues:
Classification of products under sub-heading 3906.90 of the Central Excise Tariff; Whether the process of dilution amounts to manufacture warranting assessment to duty; Proper consideration of appellant's contentions by Adjudicating and Appellate authorities; Rejection of appellant's contentions in the impugned order; Change in department's view post-adjudication; Interpretation of relevant case laws.
Analysis:
The appeal challenged the Order-in-Appeal confirming the classification of certain products under sub-heading 3906.90 of the Central Excise Tariff. The appellants argued that they purchased Polymethyl Methacrylate and diluted it by adding water, with the difference among the products being the ratio of methacrylate to water. They contended that the process of dilution did not amount to manufacture warranting assessment to duty. The appellants also highlighted that the methacrylate purchased was duty paid, and after dilution, it remained in emulsified primary form. They relied on case laws to support their argument that dilution does not constitute manufacture.
The appellant further contended that their submissions were not properly considered by the Adjudicating or Appellate authorities. They raised concerns about the lack of access to the Chemical Examiner's report and the rejection of their request for a copy. Additionally, they pointed out a letter from the department stating that the products were prepared from duty paid materials and that the process involved was only dilution, which did not amount to manufacture. The appellant argued that the impugned order failed to address their contentions adequately.
The impugned order rejected the appellant's contentions, stating that adding water could be considered a manufacturing activity if it transformed the raw material into a new commodity with a different character or end-use recognized in the market. The order referenced relevant case laws to support this position, emphasizing the importance of whether the process resulted in a new commodity known to the market. The Legal Draftsman reiterated the findings in the impugned order during the proceedings.
Upon reviewing the case records and considering the rival submissions, the Tribunal found that the department had changed its view post-adjudication, informing the appellant that no duty was payable as the process involved was only dilution of the material. The Tribunal also noted the appellant's reliance on various case laws supporting their argument that mere change in physical form did not constitute manufacture. Consequently, the Tribunal opined that the case required reconsideration by the original authority, especially in light of the changed departmental view and the need for clear findings on the applicability of Chapter Note 6 and careful consideration of the case laws cited by the appellant. Therefore, the appeal was allowed by way of remand for further assessment.
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1998 (8) TMI 162
The judgment by Appellate Tribunal CEGAT, New Delhi in 1998 (8) TMI 162 held that the benefit of Notification No. 114/73 is available for dry distemper color powder and oxide color. The tribunal ruled that the benefit is available if the binding agent does not exceed 4% by weight. The Department failed to provide evidence that the oxide color contained a binding agent exceeding 4%. The appeal was allowed in favor of the appellant.
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9911796707
