Essential character of spices controls tariff classification of bath powders; prima facie relief granted from pre-deposit and recovery.

Bath powders were examined for prima facie classification under Chapter 9 of the Central Excise Tariff Act, 1985 on the basis of whether they retained the essential character of spices. The text notes that the competent authority had not properly tested that character: the samples were not examined for spice content, the laboratory did not determine the required composition, and no other competent agency was asked to verify it. On that basis, a prima facie case was found for the assessee in respect of three bath powders. For Chukku Malli Powder, no prima facie case was shown, but the amount already paid exceeded the duty demanded, so relief from pre-deposit and recovery was justified. Waiver of pre-deposit and stay of recovery were granted for duty, interest and penalty.

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Issues: Whether the bath powders retained the essential character of spices so as to merit prima facie classification under Chapter 9 of the Central Excise Tariff Act, 1985, and whether pre-deposit and recovery should be stayed in respect of the demands, including the demand relating to Chukku Malli Powder.

Analysis: The essential character of the goods had not been properly tested by the competent authority. The samples were not examined for the character of spices, the laboratory did not determine the required composition, and no other competent agency was asked to conduct such testing. The classification exercise had proceeded largely on the composition furnished by the assessee, but the crucial question whether the preparations retained the essential character of spices remained unanswered. In these circumstances, a prima facie case was made out for the assessee in respect of the three bath powders. As regards Chukku Malli Powder, the assessee did not establish a prima facie case, but the amount already paid exceeded the duty demanded on that item, justifying relief from pre-deposit and recovery.

Conclusion: The assessee was entitled to waiver of pre-deposit and stay of recovery in respect of the duty, interest, and penalty demands.

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