2014 (10) TMI 336 - AT - Central Excise

Tribunal grants waiver of duty & penalty under Rule 173Q for Rexona case.

The Tribunal granted total waiver of duty and penalty imposed under Rule 173Q of Central Excise Rules, 1944, amounting to Rs. 6.50 crores each, in favor ... Waiver of pre-deposit of duty - Classification of goods - classification of “Rexona” under Chapter sub-heading No. 3401.00 or under 3307.30 - Held that:- Issue relates to classification of the goods manufactured by the applicant viz. Lux, Rexona and between two competing sub-headings viz. 3401.10 and 3307.30 of CETA, 1985. It is the claim of the Department that the goods in dispute are classifiable under sub-heading 3307.30 and not as bathing bar as claimed by the appellant under Chapter sub-heading 3401.10. We find this Tribunal in the case of Wipro Ltd. and also in the applicant’s own case discussed in detail the merit of classification of similar products and arrived at a conclusion that the said goods are classifiable under Chapter Heading 3401.10 and not under 3307.30 as claimed by the Revenue - from the record that for subsequent periods following the said decision similar goods had been classified under Chapter sub-heading 3401.90 which had also not been appreciated by the ld. Commissioner even though the said orders were placed before him. Taking into consideration the aforesaid circumstances, we are of the prima facie view at this stage that the applicant’s products are classifiable under Chapter sub-heading 3401.10 as claimed by the applicant. - Stay granted. Issues involved:- Application seeking waiver of pre-deposit of duty and penalty imposed under Rule 173Q of Central Excise Rules, 1944.- Classification of 'Rexona' under Chapter sub-heading No. 3401.00 or 3307.30.Detailed analysis:1. Application for waiver of pre-deposit: The appellant sought waiver of duty of Rs. 6.50 crores and an equal amount of penalty imposed under Rule 173Q of Central Excise Rules, 1944 read with Section 11AC of CEA, 1944. The issue revolved around the classification of 'Rexona' under specific sub-headings, leading to the application for relief from pre-deposit requirements.2. Classification issue: The advocate for the appellant argued that the classification issue concerning 'Rexona' was settled by previous judgments. Reference was made to the Tribunal's decisions in cases involving Wipro Ltd. and Hindustan Lever Ltd., which supported the classification of similar products under Chapter Heading 3401.10. Additionally, the Commissioner of Central Excise, Puddichery had previously classified goods under brand names like Hamam, Lux, and Rexona under Chapter sub-heading 3401.10. The advocate emphasized the binding precedents and favorable orders in their case, indicating a strong merit in their favor.3. Tribunal's analysis and decision: After hearing arguments from both sides and examining the records, the Tribunal noted the dispute over the classification of goods manufactured by the appellant, specifically Lux and Rexona, under sub-headings 3401.10 and 3307.30 of CETA, 1985. Despite the Commissioner's observation that the Tribunal's judgment did not reach finality due to the Supreme Court's dismissal of an appeal, the Tribunal found the Commissioner's stance unconvincing. The Tribunal considered the binding nature of its judgments and the classification of similar goods under Chapter sub-heading 3401.90 for subsequent periods. Consequently, the Tribunal was of the prima facie view that the appellant's products should be classified under Chapter sub-heading 3401.10. As a result, the Tribunal granted total waiver of dues adjudged and stayed the recovery during the appeal's pendency, allowing the appeal.