2003 (4) TMI 300 - AT - Central Excise

Tribunal clarifies detergent cakes' exemption criteria under Notification No. 88/88, emphasizing usage criteria.

SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD Versus COMMR. OF C. EX., AURANGABAD

SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD Versus COMMR. OF C. EX., AURANGABAD - 2003 (155) E.L.T. 297 (Tri. - Mumbai) Issues:1. Interpretation of Notification No. 88/88 regarding exemption for detergent cakes.2. Classification of detergent cakes under Heading 34.01 and its coverage under Serial No. 3 of the notification.3. Applicability of earlier Tribunal decision in the case.4. Eligibility for exemption under Serial No. 3 of the notification.Interpretation of Notification No. 88/88 regarding exemption for detergent cakes:The case involved a dispute over the interpretation of Notification No. 88/88 concerning the exemption for detergent cakes. The Tribunal examined the two relevant entries in the annexed Table of the notification, specifically Serial No. 3 covering laundry soap and carbolic soap falling under Chapter 34, and Serial No. 26 covering synthetic detergent under Heading 34.02. The Tribunal noted that detergent cakes manufactured by the appellants were classifiable under Heading No. 34.01, which did not fall under Serial No. 26. However, under Serial No. 3, the coverage extended to the entire Chapter 34, including products under Heading No. 3401. The Tribunal emphasized that as long as the products were used as laundry soaps and known in the market as such, they should not be denied exemption under Serial No. 3.Classification of detergent cakes under Heading 34.01 and its coverage under Serial No. 3 of the notification:The Tribunal clarified that detergent cakes, even if classified under Heading 34.01, could still be entitled to exemption under Serial No. 3 of Notification No. 88/88. The Tribunal highlighted that the description of goods covered under the notification was not strictly aligned with the Central Excise Tariff. While soap was covered under specific sub-headings, detergent cakes fell under a different sub-heading. However, the Tribunal concluded that as long as the products were used as laundry soaps and known in the market as such, they should qualify for the exemption under Serial No. 3, which encompassed the entire Chapter 34.Applicability of earlier Tribunal decision in the case:The Tribunal noted that the Commissioner had distinguished the current case from an earlier Tribunal decision. The previous case did not involve the classification of detergent cakes under Heading 3401. The main dispute in the earlier case was whether the unit was in a rural area. The Tribunal found that the issue in the current case could be resolved without delving into the applicability of the previous Tribunal decision.Eligibility for exemption under Serial No. 3 of the notification:After considering the arguments and case records, the Tribunal concluded that all products falling under Chapter 34 should be entitled to exemption under Serial No. 3 of the Table annexed to Notification No. 88/88, as long as they were known as laundry soaps or carbolic soaps in the market. The Tribunal set aside the original order and allowed the appeal, granting consequential relief to the appellant.