Tariff classification and limitation for repacked ultramarine blue were decided in favour of the assessee.

Ultramarine blue repacked from bulk packs into small consumer packs was held classifiable under Chapter sub-heading 3206.90, because the trade understood the product as ultramarine blue and earlier decisions had already placed it in Chapter 32.06; the Tribunal also noted that repacking attracted duty only where the tariff expressly so provided, which was not shown for the relevant period. On limitation, the Section 11C notification reflected recognised contrary practice on dutiability, so the demand could not be enforced beyond six months. The duty confirmation was therefore set aside and relief followed accordingly.

---

---

Issues: (i) Whether ultramarine blue repacked from bulk packs into small consumer packs was classifiable under Chapter Heading 32.06 or Chapter Heading 32.12 of the Central Excise Tariff Act, 1985. (ii) Whether the demand was barred by limitation in view of the earlier practice and the notification issued under Section 11C of the Central Excise Act, 1944.

Issue (i): Whether ultramarine blue repacked from bulk packs into small consumer packs was classifiable under Chapter Heading 32.06 or Chapter Heading 32.12 of the Central Excise Tariff Act, 1985.

Analysis: The product was found to be known in trade as ultramarine blue, and earlier judicial decisions had held that the commodity falls under Chapter Heading 32.06 and Chapter sub-heading 3206.90. The reasoning accepted that repacking would attract duty only where the tariff entry specifically so provided, and that no such legislative intention was present on the facts before the Tribunal. The later introduction of a chapter note by the Finance Act, 1995 was also noted as supporting the earlier position for the period in dispute.

Conclusion: The classification under Chapter sub-heading 3206.90 was upheld in favour of the assessee.

Issue (ii): Whether the demand was barred by limitation in view of the earlier practice and the notification issued under Section 11C of the Central Excise Act, 1944.

Analysis: The issuance of the Section 11C notification showed that a contrary practice on dutiability had been recognised by the Government for the relevant period. On that basis, the Tribunal held that the demand could not be enforced beyond six months.

Conclusion: The demand beyond six months was held to be time-barred in favour of the assessee.

Final Conclusion: The order confirming duty was set aside and the appeals succeeded, with consequential relief available according to law.

Ratio Decidendi: Where a tariff entry does not expressly extend duty to repacked consumer packs, and the prevailing practice on dutiability has been recognised by the Government, classification follows the accepted tariff heading and demand cannot survive beyond the applicable limitation period.

---