2003 (10) TMI 563 - AT - Central Excise

Summary

Issues: Classification of "dimethicone" under CETA sub-heading 3910.00 as "silicones in primary forms" or as medicaments under CETA sub-heading 3003.20.

In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand involves the classification of "dimethicone" manufactured and cleared by the applicants under CETA sub-heading 3910.00. The Tribunal notes that the classification under Chapter Heading 39.10 has been confirmed based on a prior decision in the case of CCE, Calcutta v. Metroark Private Limited. The applicants had been filing classification declarations, describing the manufacturing process involving mixing silicon oils of various grades to obtain a predetermined viscosity, filtering, and packing the product. The Commissioner accepted that the product had prophylactic and/or therapeutic use, meeting one aspect of Note 2 to Chapter 30 covering medicaments.

However, the Commissioner raised concerns regarding the non-disclosure of the method of packing, specifically whether the product was packed in bulk, retail packs, measured doses, or for hospital use. This non-disclosure was viewed as suppression by the applicants, invoking the extended period of limitation. The Tribunal found merit in the applicants' argument that the method of packing is relevant primarily for unmixed products suitable for prophylactic and therapeutic uses, not for products with multiple constituents mixed for such purposes. Since the Commissioner heavily relied on a past decision for classification under Chapter 39, attributing suppression to the applicants was deemed unjustified as the Tribunal's decision occurred after the period in dispute. Consequently, the demands in both cases were considered prima facie time-barred, leading to the waiver of pre-deposit of duties and penalties, with recovery stayed pending the appeals.