TaxTMI 
TaxTMI 
2000 (12) TMI 373
X X X X Extracts X X X X
X X X X Extracts X X X X
....to Rs. 2,98,292.15 on that ground. The Assistant Commissioner upheld the allegations, confirmed the duty and imposed penalty of Rs. 30,000/- on the assessees. The Commissioner (Appeals) accepted the assessees' contention that the goods were toilet water, set aside the lower order and allowed the appeal. Against this order the revenue have filed an appeal bearing No. E/72-R&V/2000-Mum. 3. Another show cause notice was issued on 20-4-1998 invoking the extended period between April, 1993 to June, 1996 containing similar allegations. The Commissioner adjudicated the case confirming demand of Rs. 20,46,176.38 directing payment of interest on the delayed payment of duty, imposing a penalty of Rs. 4,00,000/-, ordering confiscation of land, building etc. but permitting redemption thereof on payment of fine of Rs. 50,000/-. Against this order the assessees have filed an appeal bearing No. E/2504-R/99-Mum. 4.  We have heard Shri M.H. Patil, Advocate appearing along with Shri T.C. Nair, Advocate for the assessees. We have also heard Smt. Reena Arya for the revenue. 5. The first issue is the classification of the contested product. The respective tariff entries and the releva....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e action upon dry skin condition and are primarily intended for this use and to help return the skin to a supple, soft condition. The book uses the following words - "creams possessing good softening and lubricating properties find numerous uses. The skin not only dries out by exposure to sun and salt air in the summer time but also becomes dry and rough in the winter by the low humidity and heat indoors and cold outdoors. Lubricating creams are formulated principally to apply oily emollient to skins that are "deficient in oil". 12. Emollient are further described as fatty or waxy substances that are sought to be absorbed by the skin. It further states that such lubricating creams consistently applied to dry skin would ensure a silky appearance. 13. The book further describes several recipes for such creams or lotions. Significantly, mineral oils occupy a very high percentage by volume therein. 14. In the light of these observations we examine the components of the contested goods. The Commissioner says that liquid paraffin content of the product is about 46%. Shri Patil submits that it is about 95%. Paraffin is a hydrocarbon derivative. The bulk conforms to the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....verage of the two tariff entries. 19. Shri Patil also lays stress on the commercial parlance and invited our attention to the various opinions on record. The opinions are given by some medical practitioners and also general users perhaps at the instance of the marketing manager one Ms. Kulkarni of the assessee. The medical opinions are worth examination. One Dr. N.D. Rajani, skin specialist, opined as follows :- "I have been using moyzen as a toilet water product and it does not have the properties of a skin care preparations. It helps a great many patients with dry skin". As we have discussed above the property of a product restoring the dry skin condition would put it in the category of a cosmetic product. The skin specialist no doubt is a medical expert but he may not be an expert in the classification under central excise. One other Dr. S.T. Tahiliani has described the product as useful for patients suffering from ichthyoses. In this disease the skin develops fishlike scales due to excessive dryness and only an emollient cream would assist the patient. When this property is evident in the opinion, the doctor's certificate that the contested product is not a skin care prep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lds the field. It is held that where the goods are cleared surreptitiously, the demand under this rule could sustain but not where the goods are cleared openly after assessment. It is not the case here that the goods were cleared surreptitiously. The demand under Rule 9(2) therefore does not sustain. 24. The revenue appeal therefore succeeds in part. The Assistant Commissioner's order insofar as it relates to the classification is upheld but the confirmation of demand does not sustain. For the same reason the orders of imposition of penalty also do not survive. 25. In the appeal filed by the assessees the show cause notice dated 20-4-1998 invokes the provisions of Section 11A(1) along with Rule 9(2). The show cause notice was signed by the Commissioner and invokes the extended period. The allegations as to mis-statement etc. are also made. The assessees among other arguments claimed limitation. It was claimed that the department was aware of the composition of the product. The classification had been approved. The RT 12 returns had been filed. Substantial case law was referred to. The Commissioner in his order distinguished the facts before him. He held that even in the....