2004 (5) TMI 480 - AT - Central Excise

Summary

Issues:
Classification of the product under the Central Excise Tariff - Toothpaste or otherwise; Confirmation of duty demand; Imposition of personal penalties under Rule 26 of the Central Excise Rules, 2001.

Classification of the Product:
The case involved a dispute regarding the classification of the product "Close-up Whitening" by M/s. Global Health Care Products. The Commissioner classified the product under Heading 3306.10 as toothpaste, resulting in a duty demand of Rs. 22,64,176. The appellants claimed the product should be classified under Heading 3306.90. The Tribunal noted that the duty rate was the same under both headings but highlighted that if classified under 3306.10, the value would be adjudged under Section 4A, leading to higher duty payment.

Confirmation of Duty Demand:
The appellants had paid the entire duty amount on the disputed items at the time of clearance under protest. The Commissioner imposed personal penalties on various individuals and M/s. Global Health Care Products for mis-declaring the product under an incorrect heading. The Tribunal disagreed with the reasoning, stating that the appellants had made proper declarations to the Revenue. Since there was no suppression or misstatement, the Tribunal found no prima facie merits for imposing penalties. Consequently, the Tribunal dispensed with the pre-deposit condition of personal penalties and stayed the recovery during the appeal's pendency.

Imposition of Personal Penalties:
The Commissioner had imposed personal penalties on the appellants under Rule 26 of the Central Excise Rules, 2001. The Tribunal, after considering the arguments from both sides, concluded that since the appellants had not suppressed any information or made any misstatement, the penalty was not warranted. Therefore, the Tribunal decided to dispense with the pre-deposit condition of personal penalties and stayed the recovery during the appeal process.

Miscellaneous:
The Chartered Accountant representing the appellants requested an early hearing of the appeal due to the recurring nature of the classification issue. The Tribunal scheduled the appeals for hearing on 26th July 2004 to address the classification matter promptly.