TMI Blog2016 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... fied 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: - sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be done under Section 4. He upheld the denial of SSI exemption and confirmed the demand for extended period. Penalties were also imposed on the appellant and partners of the appellant-assessee and on brand owner and its Directors. The Commissioner confirmed a duty demand of ₹ 49,28,262/-. The appellant-assessee accepted the order and paid 25% of penalty imposed to close the matter. The duty demanded had already been paid. 2. In respect of Indore unit the Additional Commissioner, Indore passed the order holding that Roop Amrit to be classified as Ayurvedic medicine and valuation to be done under Section 4. He upheld the invocation of extended period and imposition of penalty. However, the SSI exemption was allowed to the appellant-assessee. A duty demand of ₹ 9,63,749/- was confirmed in the said impugned order. On appeal filed by the partners, the penalties imposed upon them were set-aside by the Commissioner (Appeals) by his order dated 20.12.2007. 3. The original order passed by Commissioner of Central Excise, Bhopal was reviewed by the department and two appeals (E/298/2008 and E/814/2008) were filed by the Revenue against the said order. The appellant-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Works- 2003 (154) ELT 328 (SC) to support his views. A reference was also made to Supreme Court decision in Puma Ayurvedics Herbal (P) Ltd., vs. CCE, Nagpur 2006 (196) ELT 3 (SC). 8. The nature of the products and their usage as explained by the appellant assessee themselves in their catalogue are as follow: Roop Amrit- The Roopamrit Gel combines the ancient secrets for fair and pimple free skin and manufacturer expertise to unlock the secret of glowing/ radiant fairness and natural beauty. It has been specifically manufactured to cure acne and pimple prone skins of all type . Complete solution- Complete solution is a breast enhancement solution. It is a unique blend of natural oils and herbs traditionally known for their ability to increase woman s breast size and firmness by stimulating new cell growth in mammary gland. This herbal formula is the first ever of its kind natural breasts enhancement alternative. It is recognized for its positive results of firm and fuller breasts for the women who use it . A plain reading of the description of the product as given by appellant- assessee in their catalogue reveals that both the products are more in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties. It reads thus :- Heading 33.07 apply, Nos. 33.03 to 2. inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packing with labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialised to such use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value. [Underlining for emphasis] Based on Note No. 2, the main emphasis in the arguments advanced on behalf of the appellant is that the product is manufactured especially for defence personnel and packed in simple packing with labels and literatures indicating that it is not sold as cosmetics or toilet preparation. On the other hand on behalf of Revenue, portion of Note No. 2 underlined above has been highlighted to contend that the products classifiable under Chapter 33 include such products under it even though they contain subsidiary pharmaceutical or antiseptic constituents or held out as having subsidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCE 1996 (83) ELT 492 (SC) upheld the view of the Tribunal to the effect that ordinarily a medicine is prescribed by a medical practitioner and it is used for a limited time and not everyday, unless it is so prescribed to deal with specific decease like diabetis. It was also held that normal scientific and technical meaning of the terms and expression should not be automatically adopted but preference should be given to the popular meaning that is to say, the meaning attached to them by those using the product. As such, the certificates issued by Drug Control Authorities or affidavit given by Vaidyas cannot be the basis to decide the classification of these products. In Puma Ayurvedic Herbal P. Ltd. vs. CCE 2006 (196) ELT 3 (SC) the Supreme Court 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. 11. We also note that the Tribunal in Richardson Hindustan Limited vs. CCE 1988 (35) ELT 424 (Tri.), observed that there are two tests to determine a drug or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no case law or ground to defend their bonafide belief to the effect that the said product can be considered as a medicine in any manner. We find no justification even 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. Considering the facts and circumstances of the case, we find no justification for interference with the finding of the lower authorities on this ground. However, regarding the penalties imposed on partners, we find 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, we find the penalties on partners are liable to be set-aside in view of the facts and circumstances of the case. Accordingly, these penalties are s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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