TaxTMI 
TaxTMI 
2017 (7) TMI 50
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....ria, GM of M/s Shanti Surgical Pvt. Ltd. challenging the personal penalty imposed on them through said OIO No.01/Commr./2008 dated 29/04/2008. Further Appeal No.E/1911/2009-EX[DB] is filed by Revenue challenging OIA No.59-CE/APPL/KNP/2009 dated 25/03/2009 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. Appeal No.E/2841/2010-EX[DB] is filed by Revenue challenging OIA No.288-289-CE/APPL/KNP/2010 dated 25/05/2010 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. Appeal No.E/1234/2012-EX[DB] is filed by Revenue challenging OIA No.15-CE/APPL/KNP/2012 dated 20/01/2012 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. & all the Orders-in-Appeals are passed by Commissioner of Central Excise (Appeals), Kanpur. Further details of said appeals are as follows:- M/s Shanti Surgical Pvt. Ltd Versus Commissioner of Central Excise, Kanpur Order-in-original No. 01 [Commissioner/2008 dated 29/04/2008 Appeal Nos. (E/1561, 1562, 1563/2008) Time period 20005-07 E/1561/2008 Demand Rs.57,92,123/- E/1561/2008 Penalty Rs.57,92,123/- E/1561/2008 On Directors Penalty Rs.5,00,000/- E/1562/2008 Penalty ....
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....example-dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes and therefore they were falling under Chapter 3005. It, therefore, appeared to revenue that M/s Shanti surgical Pvt. Ltd. failed to take registration, failed to pay appropriated duty, failed to properly maintain the records & failed to file periodical returns with the Central Excise Department. Therefore, through the said Show Cause Notice M/s Shanti Surgical Pit. Ltd. were called upon to show cause as to why Central Excise duty amounting to Rs. 1,29,02,271/(BED) + Education Cess Rs. 2,14,224/- & Higher Education Cess of Rs. 6,476/- should not be demanded from them under the provision of Section 11A of the Central Act, 1944. Further, there were proposals to impose personal penalty on Shri Shanket Kheria & Shri Subhash Chandra Kheria under Rule 26 of the Central Excise Rules, 2002. M/s Shanti Surgical Pvt. Ltd. submitted before the Original Authority that they were manufacturing Absorbent Cotton Wool, Carded Cotton/Non-Absorbent Cotton, Handloom Gauze, Handloom Bandages & Bandages et....
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....Shanket Kheria, Director of the party & Shri Subhash Chandra Kheria, General Manager of the party have challenged the personal penalty imposed on them. 5. In respect of Appeal No.E/1911/2009, a Show Cause Notice on the similar line was issued on 22/09/2008 wherein Central Excise duty amounting to Rs. 20,43,256/- was demanded for period subsequent to the earlier Show Cause Notice with the same contention that the goods manufactured by M/s Shanti Surgical Pvt. Ltd. were classifiable under so-called Chapter 3005. The said Show Cause Notice dated 22/09/2008 was adjudicated through Order-in-Original No.03/Combined Commissioner/2009 dated 18/02/2009 wherein the proposals in the said Show Cause Notice were confirmed. M/s Shanti Surgical at. Ltd. challenged the said Order-in-Original No.03/Combined Commissioner/2009 dated 18/02/2009 before Commissioner (Appeals). Learned Commissioner (Appeals) has decided the appeal through Order-in-Appeal No.59-CE/APPL/KNP/2009 dated 25/03/2009 wherein the Id. Commissioner (Appeals) has held that classification adopted by the Original Authority was not appropriate and as claimed by the M/s Shanti Surgical Pvt. Ltd. that the goods manufactured by them w....
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....bmitted that M/s Shanti Surgical Pvt. Ltd. were manufacturing the goods which were properly classifiable under eight (08) digit Tariff Item No.5601 21 10 which was specific but Revenue wanted to classify the same under so-called Chapter 3005 which is a title of a group of commodities where it is mentioned that "put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes." He has further taken us through the findings by Id. Commissioner (Appeals) in Order-in-Appeal No.59-CE/APPL/KNP/2009 dated 25/03/2009 on Page No.39 to 46 of the said Order-in-Appeal dated 25/03/2009 and urged that appeals filed by M/s Shanti Surgical Pvt. Ltd. and that against the personal penalty may be allowed and the Departmental appeal may be rejected with consequential relief to M/s Shanti Surgical Pvt. Ltd. 9. Heard the Id. D. R. who has supported the Order-in-Original in respect of Appeal Nos.E/1561/2008, E/1562/2008 & E/1562/2008 and grounds of appeal filed by Revenue. 10. Having considered the rival contentions and on perusal of the facts on record, we find that the main issue in the present 6 appeals is the classification of the products mainly Absorbent Cotton ....
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....isputed. For determining the classification under Chapter Heading No.30, the department has consulted and relied upon the Section notes, the Chapter note, the explanations of HSN and the case laws of various judicial forums. On the contrary, the appellants have pleaded that the goods in question were rightly classifiable under their respective Sub-headings as claimed by them, on the basis of nomenclature. The basic submission of the appellants was that the specific entry cannot be overridden the residuary entry. In support of their contention they have relied upon various judicial pronouncements of Hon'ble Apex Court and Hon'ble Tribunal, wherein it has been settled that the specific entry will prevail over the general. The next submission of the appellant was that their sales were not the 'retail sales' as the goods were not sold for retail consumption to ultimate consumers; rather their buyers were the industrial and institutional buyers. They have also submitted that their packages were not the 'retail packages'. The appellants in their defence have relied upon the definition of terms 'retail sale' and 'retail package' as defined in 'Th....
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....t method to be adopted for classification. In my opinion the basics of the classification are that initially an attempt should be made to search a specific entry where the goods can be classified as per the nomenclature and the constituent material. In case no specific entry is available the next attempt should be to find the nearest entry where the goods can be classified. In case both the attempts turn to be futile then the attempt should be made to consider the end uses, the inclusion and exclusion clauses provided in the section notes, the chapter notes and the explanatory notes given the HSN. While doing so the interpretation of the said Note will depend upon the context in which the entries have been worded. If an entry is clearly worded and is broad in character, the same would lead to the conclusion. An entry is to be given its ordinary meaning. If any goods fit in within one entry, the same for any purpose would not be held to be included in the other and in particular the residuary. Now coming to the issue, I observe that the goods "Absorbent cotton Wool" and "cotton Carded" specifically find place in the Chapter Sub-heading 56012110 & 52030000 respectively. Nothing re....
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....liners for babies and similar sanitary articles, of wadding Kg Nil -Wadding; other articles of wadding: 5601 21 -of Cotton 5601 21 10 ---Absorbent Cotton Wool Kg 8% 5601 21 90 ---Other Kg 8% 5601 22 00 --Of man made fibres Kg 8% 5601 29 --Other Kg 8% 5601 30 -Textile flock and dust and mill neps Kg 8% 5602 Felt, whether or not impregnated, coated, covered or laminated. It is well settled what is not excluded would be held to be included. In this regard, I would like to quote the provisions of Rule 1 of the Rules for the Interpretation which clearly provides that "1. The titles of Sections and chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes don not oth....
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....4. they may also fall in Heading No.90.26 but that being preference should have been given to the entry 90.24 the goods satisfy most specific description of being flow meter. The Tribunal or the Appellate Authority without adverting to it applied clause (c) would apply only if clauses (a) and (b) do not apply. Since the goods manufactured by the appellant satisfied the specific description of Tariff Heading 90.24 being a Bow meter, the Tribunal committed an error of law in classifying it under Tariff Heading 90.26 as it was a letter item under the classification list." In the same order, in Para 4 the Hon'ble Bench while comparing various Chapter Headings has further noticed that "Flow meters are specifically covered in Tariff Heading 90.24. Specific excludes general, is the well-known principle. Heading 90.29 permits levy on parts or accessories which are used solely in the manufacture of one or more of the articles falling within Heading 90.24. The Assistant Collector held that the accessories imported by the appellant were used solely for the meter manufactured by the appellant. Therefore, if the meter manufactured by the appellant can be said to satisfy the description o....