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Commissioner of Central Excise, Vapi Versus M/s. Global Health Care Products Partnership Firm & Others

Classificsation of Close-Up Whitening - toothpaste or not - Classification under Chapter sub-heading 3306.10 or 3306.90 - Held that:- There is no dispute that most of the ingredients of the product Close-Up Whitening are the same which are used in the manufacture of the other products, namely, Close-Up Red/Blue/ Green, which are treated as toothpaste by the assessee itself. There are, however, additional ingredients used in the manufacture of the product in question, which are accepted by the Re .....

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ther Close-Up Whitening loses the character of toothpaste and assumes the characteristics of another product, namely, dental cleaner.

There is no evidence on record placed by the Revenue which would reflect that the product in question is known to the consumers as toothpaste. - that Close-Up Whitening is not a toothpaste but a dental cleaner. We are convinced that this finding is perfectly just and proper - Close-Up Whitening dental cleaner is not a 'toothpaste' but other form of dent .....

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or short, 'HLL') since 1998. Major brands of HLL manufactured by the assessee are Close-Up Red, Close-Up Blue, Close-Up Green and Pepsodent falling under Chapter 33 of the Excise Tariff. The assessee is registered with the appellant/Revenue and has been paying the excise duty on the aforesaid products under Chapter sub-heading 3306.10 of the tariff. There is no dispute about these products. 2) From July 01, 2001, a new product known as 'Close-Up Whitening' was introduced by the a .....

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'Act') instead of assessment under Section 4A thereof. Investigation into the matter was initiated resulting into searching of the premises of the assessee. Some documents, which the Revenue claims to be incriminating in nature, were seized under Section 12 of the Act, including a Box File with Heading 'Production Manual', namely, the literature containing pages 1 to 235 issued by the Dental Information Centre of HLL. 3) On the scrutiny of these documents, the Revenue noticed th .....

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ormity dispersed blue speckles'. Statements of certain persons were also recorded. On the basis of the aforesaid material, the Revenue took the position that the aforesaid differences did not change the essential character of the product in question which still remained 'toothpaste' and, therefore, it was classifiable under Chapter sub-heading 3306.10. 4) Show-cause notice dated March 21, 2002 was issued proposing confiscation of the goods and since these goods had already been provi .....

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The aforementioned contention of the assessee was brushed aside by the Commissioner in his Order-in-Original dated December 10, 2003, thereby confirming the excise duty demand as mentioned in the show-cause notice. He, inter alia, recorded the following findings in his order: (i) Close Up Whitening was known in the market or to the trade and public as tooth paste for cleaning the teeth as such it was nothing but tooth-paste used for cleaning the teeth. (ii) M/s. Global Health Care Products in c .....

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The said product was correctly classified under sub heading 3306.10 of the Tariff attracting the provisions of Section 4A of the Act. 5) Aggrieved by the aforesaid order, the respondents herein filed appeals before the Custom Excise & Service Tax Appellate Tribunal, Mumbai (for short, the 'Tribunal'). These appeals have been allowed by the Tribunal vide impugned order dated March 11, 2005. In these appeals, validity and correctness of the aforesaid order of the Tribunal is questioned .....

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al hygiene, including dentifrices (for example, toothpaste and tooth powder and denture fixative pastes and powders) 3306.10 Tooth powders and toothpaste 3306.90 Other. 7) The Chapter Heading makes it clear that it covers various preparations for oral and dental hygiene. These preparations specifically include dentifrices. Examples of such oral and dental hygiene are also given, like toothpaste, tooth powder, denture fixative pastes and powders. Out of these, two products which are covered by su .....

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. 3306.90. Therefore, the moot question is as to whether Close-Up Whitening is toothpaste or not. If it is found to be toothpaste then the stand of the Revenue would be justified. On the other hand, if the product does not qualify to be a toothpaste, then the assessee stands vindicated. 8) Having noticed the controversy involved, we would like to point out the main ingredients of the product at this stage: There is no dispute that most of the ingredients of the product Close-Up Whitening are the .....

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d blue speckles in Close-Up Whitening. There is also additional step of 'addition of silica agglomerates'. In fact, it is this ingredient which felicitates at getting uniformity dispersed speckles. It is on the basis of these additional factors, one has to determine as to whether Close-Up Whitening loses the character of toothpaste and assumes the characteristics of another product, namely, dental cleaner. 9) A reading of the order of the Commissioner, to which our attention was drawn by .....

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306.20 Yarn used to clean between the teeth (dental floss) 3306.90 Other This heading covers preparations for oral or dental hygiene such as: (I) Dentifrices of all types: (1) Tooth pastes and other preparations for teeth. These are substances or preparations used with a toothbrush, whether for cleaning or polishing the accessible surfaces of teeth or for other purposes such as anticaries prophylactic treatment. Toothpastes and other preparations for teeth remain classified in this heading, whet .....

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th dentifrices. The Commissioner noted that the meaning of dentifrices as per the Concise Oxford Dictionary is 'a paste or powder for cleaning of teeth'. On that basis, he concluded that the product in question was paste, namely, the toothpaste for cleaning the teeth and, therefore, would fall under sub-heading 3306.10. En passe, the Commissioner also observed that there is no major difference in these products, namely, Close-Up Whitening and Close-Up Red/ Blue/Green, except one ingredie .....

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SCN that the tooth paste, being dentifrice has been correctly classified under the HSN and the Central Excise Tariff has been based on HSN. Accordingly it is essential to follow the correct classification of the product in question as described and classified under the relevant chapter of HSN. In this connection it may be mentioned that the Hon'ble Supreme Court in the case of CCE, Shillong vs. Wood Craft Product Ltd. Reported in 1995 (77) ELT 23 (SC) in para 18 has held that the structure o .....

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d in 1978 (2) ELT (J581) in para 6 has held that the correct test in interpreting any item mentioned in the first schedule to the Central Excise Act is to see the commercial sense in which the item is understood or the sense in which traders or persons dealing in that terms understand it and not the technical or scientific sense. Even it may be mentioned that the Hon'ble Tribunal in case Veto Co. Vs. CCE reported in 1992 (62) ELT 584 (T) in para 6 has held that the goods have to be classifie .....

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al pointed out that there was material difference in the sub-heading 3306.10 in the Indian statute when contrasted with Harmonized Commodity Description and Coding System. Whereas, as per the tariff entry 3306.10 in the Excise Act, it is 'tooth powder' and 'toothpaste', under the Harmonized Commodity Description and Coding System, what is mentioned is 'dentifrices'. It is further noticed by the Tribunal that dentifrices was more generic in nature as it recognized all thre .....

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) 'Toothpaste', (ii) Other preparations for teeth, and (iii) 'Denture cleaners'. The Note further explains that Dentifrices to include 'toothpaste' and other preparations for teeth whether for cleaning or polishing the assessable surface of teeth or for other purposes such an Anticaries prophylactic treatment. The Note also enumerates that 'toothpaste' and 'other preparations for teeth' remains classified under Heading 3306 whether or not they contain abra .....

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Fixative paste and powders under Heading 3306 and at the four digit level it is para material HSN. The scope of sub heading 3306.10 of CETA 1985 restricts it to only 'tooth powder and paste' and any entity which is not a 'toothpowder or toothpaste' would be covered under heading 3306.90. This submission has to be upheld. We find ourselves in agreement with the aforesaid approach of the Tribunal having regard to the cogent reasons given by it. 12) This Court in the case of Camlin .....

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ub-Heading 3215.90 of the said Tariff. The Tribunal failed to appreciate that the entries under the HSN and the entries under the said Tariff are completely different. As mentioned above, it is settled law that when the entries in the HSN and the said Tariff are not aligned, reliance cannot be placed upon HSN r the purpose of classification of goods under the said Tariff. One of the factors on which the Tribunal based its conclusion is the entries in the HSN. The said conclusion in the order of .....

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known in the market as 'toothpaste'. The Tribunal has differed with the aforesaid view. 15) In the first place, it is pointed out that there is no evidence on record placed by the Revenue which would reflect that the product in question is known to the consumers as toothpaste. When this was pointed out to Mr. Radhakrishnan, he was unable to pinpoint any evidence in support that was led by the Revenue. 16) We may record that a finding is arrived at by the Tribunal to the effect that Clos .....

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ilicon Agglomerate and Bluer Agglomerates, which play an active role as abrasive. (b) Even the manufacturing process of Close-Up toothpaste and Close-up Whitening is different. While the total stages for manufacturing toothpaste were nine, the number of stages for manufacture of Close-Up Whitening were eleven. It takes 120 minutes to manufacture a toothpaste tube, while it takes 155 minutes to effect the manufacture of Close-Up Whitening. (c) Statement of one Mr. N.H. Bijlani, the only expert in .....

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