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2019 (2) TMI 400 - AT - Central ExciseClassification of Henna Powder - under the chapter heading 3304 or 3305 - deemed manufacture - repacking from bulk in unit packs - Penalty - Rule 25 of Central Excise Rules, 2002 read with Section 11AC of The Central Excise Act, 1944 - Held that: - From the description of the product as it appears on the packing it is quite evident the product is a beauty or make up preparation for application on the hands. In terms of Section Note 4 to Section VI, such beauty or make up preparations are to be classified only under the heading 3304 of tariff and not anywhere else in the Schedule. In terms of chapter note 3 to Chapter 33, also these goods have to be classified as per the use as indicated on the packing material. It is fact that though the Henna Powder in unit container could be used for colouring the hairs also, but the packing describes the use of the product being cleared as beauty or makeup preparation for decoration of the hands. In view of the specific description and use as is mentioned on the packing the classification under heading 3305 cannot be accepted. Since the product gets classified under Chapter 33, in terms of Chapter Note 5, “conversion of powder into tablets, labelling or relabelling of containers intended for consumers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the products marketable to the consumer, shall be construed as ‘manufacture’.” Thus the processes undertaken by the appellant also amount to manufacture Penalty 25 of Central excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944 - Held that:- The demand in the present case is made within the normal period of limitation as provided by Section 11A (1) - Not even a whisper or iota of mention of ingredients mentioned for invoking extended period of limitation as per proviso to section 11A(1) is there in any of the two show cause notices, or adjudication order. Since the ingredients as prescribed for invoking extended period of limitation are identical to those for invoking Section 11AC for imposition of penalty, there is no justification to sustain the penalty imposed. The penalty equivalent to the duty demanded imposed on the appellants under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of The Central Excise Act, 1944 is set aside - The demand of duty under Section 11A along with interest under Section 11AB of Central excise Act, 1944 is upheld - appeal allowed in part.
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