TaxTMI 
TaxTMI 
2011 (5) TMI 901
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....caution. Hence, respectfully following the stay order in the assessee's own case, we allow these stay petitions and waive the pre-deposit of amounts and take up the appeals for disposal. 4. Since the issue involved in all these appeals, as recorded below, are arising out of the same OIO No.17 to 21/2009(C.Ex.) (Commr.) dated 31.08.2009, we dispose off the same by a common order. Assessees' Appeals Sl. No. Appeal No. Name of the parties Impugned OIO No. and Date 1. E/743/2010 Capital Technologies Ltd. Vs. CCE and ST, Tirupati 17 to 21/2009 dt.31.08.2009 2. E/665/2011 Capital Technologies Ltd. Vs. CCE and ST, Tirupati 19 [17 to 21/2009] dt.31.08.2009 3. E/666/2011 Capital Technologies Ltd. Vs. CCE and ST, Tirupati 18 [17 to 21/2009] dt.31.08.2009 4. E/667/2011 Capital Technologies Ltd. Vs. CCE and ST, Tirupati 20 [17 to 21/2009] dt.31.08.2009 5. E/668/2011 Capital Technologies Ltd. Vs. CCE and ST, Tirupati 21 [17 to 21/2009] dt.31.08.2009 6. E/669/2011 M/s. Hindustan Unilever Ltd. (Co-Noticee) Vs. CCE and ST, Tirupati 21 [17 to 21/2009 dt.31.08.2009 7. E/670/2011 M/s. Hindustan ....
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....ds and liable to Central Excise Duty under Chapter 33 and coming to such a conclusion, issued show cause notices. All the show-cause notices demanded duty from the assessees and also sought to impose penalties and demand of interest and penalty on HLL besides proposition for confiscation of the goods detained during the search of the factory premises of the appellant. The appellants herein (assessee) contested the show-cause notices on the merits as well as on the limitation aspect. It was contended by the assessee before the adjudicating authority that their products would fall under Chapter Sub-heading 15 based upon the submission that they are only undertaking repacking of coconut oil into retail packets ranging from 50 ml to 500ml and as per Note 2 to Section VI, Chapter Sub-Heading 3305 covers only "preparations for use on the hair" and that it had not used the term "products used on the hair". The adjudicating authority, after considering the submissions made by the assessee before her in the reply as well as during the personal hearing came to the conclusion that the case-laws cited by the assessees and the Board Circulars cited by the assessees will not be applicable to the....
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....maller packets from the larger packets would fall under Chapter No. 15 or Chapter 33. It is his submission that all these cases had taken a view that repacked coconut oil would fall under Chapter No.15 and not under 33 as has been issued by the CBEC vide Circular dated 03.06.2009. He would submit that though the 37B Circular issued by the Board in 2009 would be binding on the lower authorities, it would not be binding on the Tribunal. He would submit that in extreme case, the Board's Circular dated 3-6-2009, even if it is sought to be applied in this case would be applicable not retrospectively but prospectively i.e. from the date of issue as it is a pervasive Circular issued by the Board. For this proposition, he would rely upon the judgment of the Hon'ble High Court in the case of Suchitra Components Ltd. vs. CCE, Guntur [2007 (208) ELT 321 (SC)]. It is his submission that during the relevant period, the decisions of this Tribunal were holding the field and as per the judgment of the Hon'ble High Court of Karnataka, in writ Petition No. 16810 of 2009 in the case of M/s. Marico Limited., the same views were expressed which was in respect of the very same issue, which i....
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....hould be of a specific standard. It is his submission that the ISI hair oil specification also indicate that the said peroxide value has one of the test for the purpose of ascertaining the standard of hair oils manufactured in India. It is his submission that the peroxide value test is not included or specified in the Prevention of Food Adulteration Act or BIS Standard for coconut oil edible grade. It is his submission that the common parlance test needs to be applied in this case. It is his submission that the judgment of the Hon'ble Supreme Court in the case of Indo-International Industries vs. Commissioner of Sales Tax, U.P. [1981 (8) ELT 325 (SC)], held that 'any term or expression defined in the enactment must be understood in the light of the definition given in the Act, in the absence of which the meaning of the term as understood in common parlance or commercial parlance must be adopted'. This proposition is being put forth by him for the purpose that the small packets of the coconut oil which are repacked by the appellant are understood in the market as hair oil only and not as edible coconut oil. It is his submission that hair oil is not defined anywhere in th....
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....ned. It is not disputed that the "coconut oil" without anything more could cover both the edible as also the non-edible (commercial or industrial) varieties. When a customer goes to the market and asks for coconut oil to buy, he is not necessarily supplied the edible variety. Coconut oil is put to less of edible use than non-edible." He would also like to draw our notice to HSN Explanatory Note in respect of Section VI of the said HSN. 9. The learned counsel in rejoinder would submit that the judgment in the case of Jain Exports (P) Ltd. (supra) was in respect of an Import Policy while in the case in hand Central Excise tariff Act, 1985, clearly holds in his favour. It is also his submission that as regards the common parlance test, he is net disputing the fact that common parlance test can be applied; but in this case when there is a direct judgment of the Tribunal on an identical set of facts, the same will apply unless stayed or set aside by the higher forum. It is his submission that all the evidences, which the learned JCDR has brought forth, though mentioned in the annexure to the show-cause notice will not carry case of the Revenue any further as though these were documen....
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.... due on the excisable goods cleared by them during the material period by suppressing relevant facts from the department. There is penalty on Marico in all the impugned orders for having abetted evasion by the job worker. Order-in-Original in respect of M/s. Aiswarya Industries confirms a demand of duty of Rs. 26,92,25,605/- along with interest, Education Cess of Rs. 53,84,512/- and penalty of Rs. 27,46,10,118/- on M/s. Aiswarya Industries and Rs. 25,00,000/- on M/s. Marico. Similar demands and penalties are involved in the other three orders. 2. The facts of the case are that with effect from 28-2-2005, by Central Excise Tariff (Amendment) Act, 2004, the Central Excise Tariff Act, 1985 was modified by substituting the tariff in the First Schedule with the entries in the HSN. This exercise also involved incidental and other amendments to the Section Notes and Chapter Notes wherever felt necessary by the Government. The Chapter No. 2 to Chapter No. 33 was replaced by a new Chapter No.3. The Commissioner observed that the job workers used the Parachute brand registered for marketing hair oil by Marico on the excisable goods impugned in the proceedings. A plethora of material showe....
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....be classified in those headings and in no other headings of this Schedule." The relevant extract of the Explanatory Notes to HSN reads as follows before and after 28-2-2005: "Preparations (e.g., varnish, and unmixed products (e.g. unperfumed powdered talc, fuller's earth, acetone, alum) which are suitable for other uses in addition to those described above are classified in these headings only when they are: (a) In packings of a kind sold to the consumer and put up with labels, literature or other indications that they are for use as perfumery, cosmetic or toilet preparations, or as room deodorizers; or (b) Put up in a form clearly specialised to such use (e.g., nail varnish put up in small bottles furnished with the brush required for applying the varnish)". The above Explanatory Note prescribed conditions, for classifying a product under Heading Nos. 3303 to 3307, which were contained in the erstwhile Note 2 to Chapter No. 33. In view of that position, the proceedings which culminated in the impugned orders on the basis that the relevant law contained in the Central Excise Tariff Act had changed with effect from 28-2-2005 was incorrect. The Tribunal, in its dec....
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....cise, Kanpur reported in 2002 (139) E.L.T. 633 the Tribunal had held that the mere small size of a pack shall not be determinative of the fact that the product was hair oil. A similar view was held in the case of Shrikant Sachets Pvt. Ltd. v. CCE [2005 (180) E.L.T. 401] by the Tribunal. 5. It is also argued that for a product to be classified under Chapter Heading 3305, it has to be a preparation for use on hair. The subject goods was coconut oil per se and did not undergo any process to make it suitable for use on hair. Therefore, it was not a preparation for use on hair. To become a preparation, the product had to satisfy Note 3 to Chapter 33. The Note 2 to Section VI was relevant only when the goods were classifiable under Chapter 33. As the subject goods did not bear a label, literature or other indication to show that the same was meant for use as cosmetic, toilet preparation or that the same was put up in a form which was clearly specialised for use as hair oil, the product could not be classified under Chapter 33. Goods which were not otherwise classifiable under Chapter Heading 3305 could not be classified under CH 3305 on repacking Note 2 of Section VI did not apply in ....
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....ed the brand name under which goods were being sold or that they were being sold at MRP. The demand was time-barred. The demand for interest and imposition of penalty were also challenged as the impugned demand itself failed. 6.1. Heard both sides. 7. We have carefully considered the case records and the submissions by all concerned. The issue involved is the correct classification of coconut oil packed and sold in plastic containers of capacity 50 ml to 500 ml manufactured by the Job workers and marketed as pure edible oil. The raw material, coconut oil in bulk is received from the principal Marico. The competing entries are CSH 33951990 and CSH 151311 of the CET. The period of dispute is 1-3-2005 to 28-2-2007. The Tribunal had considered classification of refined coconut oil packed in containers i.e., plastic sachets of 50 ml to plastic cans of 500 ml manufactured by M/s. Madhan Agro Industries India Pvt. Ltd. It was decided that the correct classification of the product was under Chapter Heading 15.13 as coconut oil and not under Chapter Heading 3305 of the tariff as hair oil. The period of dispute in the case considered in that final order was post-28-2-2005. We find that....
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....e, coconut oil before repacking should be classifiable in Chapter Heading 3305 to classify the same on packing in sachets, bottles and cans under Chapter Heading 3305. In the instant case, the item goes out of the purview of Chapter 33 owing to the operation of Note 3 to Chapter 33 and the HSN Explanatory Notes to the above Chapter. Therefore, Section Note does not help in bringing the impugned goods under CSH 33051990. Yet another ground found by the Commissioner to deny classification under Chapter Heading 15.13 to the coconut oil cleared by the job workers in retail packages is that the containers were not suitable for packing edible oil. The Commissioner found that containers which comprised a component of more than 15% reground plastic was not suitable for packing food grade oil. No basis was disclosed for this finding. On the other hand, the appellants placed on record a report of the Indian Institute of Packaging which showed that containers having even as much as 70% of reground material could be used for packing food in terms of the PFA Rules which prescribed ISI standards in this regard. As regards this ground, we find that Chapter 15 covers all varieties of coconut oil, ....
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....or as room deodorizers; or (b) put up in a form clearly specialized to such use (e.g. nail varnish put up in small bottles furnished with the brush required for applying the varnish)". The impugned product does not satisfy these notes and therefore does not fall for classification under CSH 3305. 10. Vide Circular No. 145/65/95-CX dated 1-8-1995 the CBEC had clarified that coconut oil whether pure or refined or whether packed in small or large containers merited classification under Chapter Sub-Heading No. 1503 if it satisfied the criteria of 'fixed vegetable oil' laid down in Chapter Note 3 of Chapter 15. It was also clarified that if the containers bore labels, literature etc. indicating that it was meant for the application on hair as specified under Note 2 of Chapter 33 and/or if the coconut oil had additives (other than BHL) or had undergone processes which made it a preparation for use on hair as mentioned in Chapter 6 of Chapter 33 then the coconut oil merited classification under Chapter 33. 11. In Amardeo Plastics Industries v. CCE, Belapur [2007 (210) E.L.T. 360 (Tri. Mumbai)] Tribunal considered the above circular of the Board. In that case, the conta....
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.... case interpreting the scope of Chapter 15.13 and 33.05 of Central Excise Tariff applies to the corresponding entries even after 28-2-2005. The above ratio of the decision of the Tribunal therefore squarely applies to the present case also. We find that the impugned order is not consistent with the Tribunal's reading of the Tariff entries and HSN Notes relating to the relevant entries of Chapters 15 and 33 of the first schedule to the CETA, 1985. 15. In the result, we set aside the impugned order and allow the 15. appeal filed by M/s. Madhan Agro Industries (P) Ltd." On a study of all the relevant material, we are of the considered opinion that the impugned orders are not sustainable as regards as the classification and the consequential duty liability fastened on the job workers. As the duty liability of the job workers is found to be not sustainable, the demand of interest and imposition of penalty on all the appellants including Marico is also not sustainable. In the result, we allow these appeals filed by the assessees and vacate the impugned orders. The stay applications also get disposed of." 12. It can be seen from the above reproduced entire judgment of the Tri....