2009 (5) TMI 791 - AT - Central Excise

Summary

Issues: Classification of shikakai powder under Central Excise Tariff Act, demand for duty, penalty imposition, rectification of errors in the final order.

In this case before the Appellate Tribunal CESTAT, CHENNAI, the issue revolved around the classification of shikakai powder under the Central Excise Tariff Act. The appellant, M/s. Mayilmark Nilayam, sought rectification of errors apparent from the records in the Final Order. The Commissioner of Central Excise had classified shikakai powder under CSH 3307.39, leading to a demand for duty, confiscation of seized goods, and imposition of penalties. However, the Tribunal, following the judgment of the Apex Court, classified shikakai powder under CSH 3305.90 and restricted the demand to the normal period, vacating penalties except for those related to the confiscated goods.

Upon hearing both sides, the Tribunal acknowledged the appellant's argument that the demand for duty could not be validly confirmed even for the normal period as the original authority did not notify the liability to duty under CSH 3305.90. The Tribunal agreed that fines and penalties could not be imposed without a proper proposal for classification. Consequently, the Tribunal allowed the ROM petition and modified the final order, holding that shikakai powder is excisable and classifiable under CSH 3305.90, while Arapputhool is not excisable. Due to the lack of notice regarding the proposed classification, the entire demand for duty and penalties on the appellant and others were set aside, and the appeals were allowed accordingly.