1999 (6) TMI 450 - AT - Central Excise

Summary

Issues:
Classification of Johnson & Johnson's prickly heat powder under Central Excise Tariff, Time-barred show cause notice, Pending Writ Petition in Bombay High Court, Premature show cause notice, Infructuous appeal, Issue of limitation

Classification Issue:
The appellants manufactured Johnson & Johnson's prickly heat powder under a loan license basis and claimed classification under sub-heading 3003.19 of the Central Excise Tariff. However, a show cause notice was issued for classifying the product under sub-heading 3003.90. The Collector of Central Excise, in the impugned order, held that the issue of classification was pending before the Bombay High Court in a Writ Petition filed by Johnson & Johnson. As a result, he directed the jurisdictional authority to finalize the classification list, stating that the show cause notice was premature. The appellants argued that the show cause notice was time-barred as they had submitted detailed classification lists. They contended that if the assessments were provisional, as per the Collector's order, then invoking Section 11(1)(a) along with Rule 9(2) of the Central Excise Rules would not be appropriate.

Pending Writ Petition Issue:
Johnson & Johnson had filed a Writ Petition in the Bombay High Court regarding the classification of their products, including prickly heat powder. The High Court had passed an interim order restraining the Union of India from levying or demanding any differential duty during the pendency of the Writ Petition. The Collector of Central Excise refrained from making any findings on the classification issue due to the pending matter before the High Court.

Premature Show Cause Notice Issue:
The Collector of Central Excise, in the impugned order, deemed the show cause notice as premature and decided not to take any action on it. He directed the jurisdictional authority to finalize the classification list after being apprised of the outcome of the Writ Petition filed by Johnson & Johnson in the Bombay High Court. As a result, the Collector did not propose any action on the show cause notice, making the appeal filed by the appellants infructuous.

Issue of Limitation:
The appellants raised concerns about the time-barred demand. Since the Collector considered the show cause notice as premature, if the Revenue were to issue a fresh notice, the appellants would have the opportunity to raise the issue of limitation in accordance with the law. The adjudicating authority would then decide on the limitation issue afresh.

In conclusion, the judgment by the Appellate Tribunal CEGAT, New Delhi addressed various issues related to the classification of Johnson & Johnson's prickly heat powder, the impact of a pending Writ Petition in the Bombay High Court, the premature nature of the show cause notice, and the potential issue of limitation. The decision highlighted the importance of awaiting the outcome of the Writ Petition before finalizing the classification list and refraining from taking action on a premature show cause notice. The appellants were granted the opportunity to address the issue of limitation if a fresh notice were to be issued by the Revenue.