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Issues: Classification of imported goods under Central Excise Tariff and liability for countervailing duty.
Classification of Goods: The appellant contended that the imported goods, deodorants containing alcohol, should not be liable for Central Excise duty as alcohol is one of the ingredients, citing Chapter Note 33(1)(d) of Chapter 33 of the Central Excise Tariff. They argued that alcohol in the goods falls under perfumery, cosmetics, and toilet preparations, which are exempt. However, the Tribunal found that the denatured alcohol in the deodorants was not fit for human consumption and was only used for industrial purposes, thus falling under Chapter 22 of the Tariff. The Tribunal referred to the case of Deccan Sugar & Abkari Co. Ltd. v. Commr. of Excise, where it was held that rectified spirit, although capable of producing potable liquor, is liable for Central Excise duty. The Tribunal concluded that since the denatured alcohol in the deodorants was for industrial use, the impugned order classifying the goods under Central Excise Tariff and imposing countervailing duty was upheld. Sample Analysis: The appellant submitted a sample of the Nivea deodorant, the impugned goods, containing denatured alcohol. The Tribunal examined the ingredients of the deodorant, which included Butane, Alcohol Denat, Isobutane, Propane, Parfum, and other components. Denatured alcohol, as per the Concise Chemical and Technical Dictionary, is ethyl alcohol to which substances have been added to make it unsuitable for beverages or medicines, rendering it suitable for specialized industries. The Tribunal noted that denaturation involves adding disagreeable or poisonous substances to alcohol to make it unfit for consumption. Citing legal precedents and Chapter notes to the Tariff, the Tribunal determined that the denatured alcohol in the deodorants was not intended for human consumption but for industrial use, aligning it with Chapter 22 of the Central Excise Tariff. Therefore, the Tribunal found no error in the impugned order classifying the goods and dismissing the appeal. This detailed analysis of the legal judgment highlights the issues of classification of imported goods under the Central Excise Tariff and the liability for countervailing duty. The Tribunal's decision was based on the nature of the denatured alcohol in the deodorants, determining its suitability for industrial purposes and its alignment with Chapter 22 of the Tariff. The analysis provides a comprehensive overview of the arguments presented by the appellant, the examination of the sample ingredients, and the legal principles applied by the Tribunal to reach its decision.
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