TMI Blog2018 (11) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... EX/IND/2018 dated 30.01.2018 passed by the Commissioner of Central Excise Central Goods Service Tax, Indore. The period in dispute is 2011-12 to February 2016. 2. The brief facts of the case are that, during the period under consideration, the assessee-Appellants were engaged in the manufacture of Absorbent Cotton Wool IP, Gauze/Bandage Wool I.P, Absorbent Cotton B.P., Purified Cotton USP, Cotton Gauze Absorbent B.P., Absorbent Lint IP, Rolled Bandages, Cotton Bandages Cloth, Cotton Crepe Bandage B.P. On the basis of information, the Department came to know that the assessee-Appellants have classified Absorbent Cotton Wool IP under Tariff Heading No. 56012110 of the first Schedule to the Central Excise Tariff Act, 1985 and availed exemption from payment of Central Excise Duty claiming as Textile Textile Articles under Notification No. 30/2004-CE dated 09.07.2004. Accordingly, a show cause notice demanding duty, penalty and interest was issued, which culminated into passing of the impugned order. Being aggrieved, the assessee-Appellants filed the present appeal. 3. With this background, we have heard Sh. Bipin Garg, learned Advocate for the assessee-Appellants and R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I further observe that the department has intended to classify the said goods under Chapter Heading No. 3005 on the grounds that the goods were put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes because appellants were selling their goods to various government hospitals and hospitals of railway and defence establishments. The first part of broad definition of Chapter Heading 3005 was not considered because the fact that the goods were not coated or impregnated with pharmaceutical substances has not been disputed. For determining the classification under Chapter Heading No. 30, the department has consulted and relied upon the Section notes, the Chapter note, the explanations of HSN and the case law of various judicial forum. On the contrary, the appellants have pleaded that the goods in question were rightly classifiable under their respective sub-headings as claimed by them, on the basis of nomenclature. The basic submission of the appellants was that the specific entry cannot be overridden by the residuary entry. In support of their contention they have relled upon various judicial pronouncements of Hon'ble Apex Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... base for classification of goods under the aforesaid Chapter 30. I have gone through the various provisions of the Central Excise Act, 1944; the Rules for interpretation; relevant provisions of Drugs Cosmetic Act, the Standards of Weight Measures Act, 1976, the Standards of Weight Measures (Packaged Commodities) Rules, 1977; the samples of the goods in question produced before me and the submissions made by the appellant in the grounds of appeal and at the time of personal hearing. Before proceeding to decide the appropriate classification, let us go through the correct method to be adopted for classification. In my opinion the basics of the classification are that initially an attempt should be made to search a specific entry where the goods can be classified as per the nomenclature and the constituent material. In case no specific entry is available the next attempt should be to find the nearest entry where the goods can be classified. In case both the attempts turn to be futile then the attempt should be made to consider the end uses, the inclusion and exclusion clauses provided in the section notes, the chapter notes and the explanatory notes given the HSN. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3005 90 50 ---Burn therapy dressing soaked in protective gel Kg 16% 3005 90 60 ---Micro pores surgical tapes Kg 16% 3005 90 70 ---Corn removers and callous removers Kg 16% 3005 90 90 ---Other Kg 16% 5202 Cotton waste (including yarn waste and garneted stock Unit Rate of Duty 5202 10 00 -Yarn waste (including thread waste) Kg Nil -Other: 5202 91 00 ---Garneted Stock Kg Nil 5202 99 00 ---Other Kg Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes do not otherwise require, according to the provisions hereinafter contained. In the aforesaid rule there is no ambiguity and it has clearly been held that the classification has to be determined according to the terms of headings and in case of any ambiguity the Rule 2, 3 or 4 as the case may be, shall be applied. Furthermore, the Rule 5 of aforesaid Rules again clarifies the position. For the sake convenience the provisions of said rules are reproduced as follows : - 5. For legal purposes, the classification of goods in the Sub-headings of a heading shall be determined according to the terms of those Sub-headings and any related Sub-heading notes and mutatis and mutandis, to the above rules, on the understanding that only Sub-headings at the same level are comparable. For the purposes of this rule, the relative Chapter and Section notes also apply, unless the context otherwise requires. The said rule is self-explanatory. The reference to Chapter notes and Section notes has been placed at last. In the present case the provisions of Rule 2, 3 or 4 are not attracted because the Chapter Sub-heading 56012110 52030000 specifically provide for the classification of goods in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant can be said to satisfy the description of Tariff Heading 90.24, then by virtue of Tariff Heading 90.29 the rate of duty on the components imported by the appellant could be levied as in Tariff Heading 90.24. On the finding recorded by the Assistant Collector the end-product manufactured by the appellant being specifically provided for by 90.24, the accessory imported by the appellant which was solely used for manufacture of it was liable to be classified on the same rate as the item in which it was used, namely, flow meter. The findings above clearly lay that the specific will prevail over the general. I notice that the Adjudicating Authority has referred the said judgment in the order but the same has not been appreciated in right perspective. The following case law has further strengthened my views. The findings given by Hon'ble Supreme Court in above Case have further been relied by Hon'ble Tribunal while deciding the case of Commissioner of Central Excise v. SPM India Ltd. 2007 (211) E.L.T. 573 (Tribunal) relating to classification in a similar situation. After relying the case law in the case of Moorco India (supra) it has been held that When there is a spec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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