2003 (10) TMI 449 - AT - Central Excise

Classification - Re-classification when not permissible - Adjudication - Gulabari - Classification of

Summary

Issues: Classification of 'Gulabari' under Central Excise Tariff Act, confirmation of demand of Central Excise duty, re-determination of classification, appropriate proceedings for classification.

Classification of 'Gulabari' under Central Excise Tariff Act:
The case involved appeals against the classification of 'Gulabari' under heading 33.03 of the Central Excise Tariff Act. The appellant contended that 'Gulabari' should be classified as a patent ayurvedic medicament under Heading 3003.30. The Assistant Commissioner initially classified the product under heading 33.03 as 'toilet water,' leading to a demand for Central Excise duty. However, the Tribunal in Final Order No. 47/2000-C held that the department failed to prove that 'Gulabari' is 'toilet water' under heading 33.03, setting aside the demand for duty. The Tribunal clarified that it did not confirm the classification under 3003.30, leaving it open for the department to determine the correct classification in appropriate proceedings.

Confirmation of demand of Central Excise duty:
Following the Tribunal's final order, the appellant filed a refund claim. The department initiated fresh proceedings to re-determine the classification of 'Gulabari' under heading 33.03. The Deputy Commissioner reclassified the product under heading 33.03, which was confirmed by the Commissioner (Appeals). However, the appellant argued that since the Tribunal had finalized the issue and set aside the demand, the subsequent reclassification in the same proceedings was inappropriate. The Tribunal emphasized that the department had not challenged its decision before the Supreme Court, thus barring them from re-determining the classification in the same proceedings. The Tribunal set aside the impugned order and allowed all appeals.

Re-determination of classification and appropriate proceedings:
The Revenue argued that the refund claims filed by the appellant initiated the appropriate proceedings for reclassification. They contended that both the adjudicating authority and the Commissioner (Appeals) correctly classified 'Gulabari' under heading 33.03 based on the Tariff heading and Chapter notes. However, the Tribunal reiterated that the department failed to discharge its burden of proving that 'Gulabari' is 'toilet water' under heading 33.03. The Tribunal clarified that the department could determine the correct classification in fresh proceedings but not in the same proceedings that had attained finality after the Tribunal's decision. The Tribunal highlighted that without evidence or a chemical test report, the department could not reclassify 'Gulabari' under heading 33.03 in the same proceedings.

In conclusion, the judgment revolved around the classification of 'Gulabari' under the Central Excise Tariff Act, with the Tribunal setting aside the demand for Central Excise duty due to the department's failure to prove the product's classification as 'toilet water' under heading 33.03. The Tribunal emphasized that the department could determine the correct classification in appropriate fresh proceedings but not in the same proceedings that had concluded after the Tribunal's decision.