2017 (5) TMI 1544 - AT - Central Excise

Levy of Central Excise Duty - Henna Powder and Henna Paste - Revenue classified under Chapter Heading 3304 as against the classification done by the appellants under Chapter 1404 of the Central Excise Tariff Act, 1985 - Held that - N/N. 11/2017-CE (N.T.) dated 24.04.2017 issued by the Government of India, Ministry of Finance (Department of Revenue) under Section 11C of the Central Excise Act, 1944, held that the whole of duty of excise payable on Henna Powder and Paste under Section 3 ibid shall not be required to be paid during the period commencing from 1st day of January, 2007 to 1st day of March, 2013. No classification has been furnished by the Central Government with regard to the goods in question i.e. whether it should be classified under Chapter 33 as claimed by the Department, as against the claim of the appellants under Chapter 14 ibid - classification issue set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Central Excise duty liability classification of Henna Powder and Henna Paste under Chapter Heading 3304 vs. Chapter 1404 of Central Excise Tariff Act, 1985.

Analysis:
The judgment pertains to a batch of appeals where Central Excise duty liability was confirmed on the appellants for classifying Henna Powder and Henna Paste under Chapter Heading 3304, contrary to the appellants' classification under Chapter 1404 of the Central Excise Tariff Act, 1985. The Notification No.11/2017-CE (N.T.) dated 24.04.2017 was referred to during the hearing, which stated that the duty of excise on Henna Powder and Paste need not be paid between 1st January, 2007, and 1st March, 2013. The appellants argued that since the disputed period in all appeals falls within the mentioned dates, the appeals should be allowed, and the impugned orders set aside.

The Central Government, under Section 11C of the Central Excise Act, 1944, has the authority to issue notifications directing non-recovery of excise duty due to general practice. The Notification mentioned above exempts the payment of Central Excise duty on Henna Powder and Paste falling under Chapter 33 between 01.01.2007 to 01.03.2013. Consequently, the Central Excise duty confirmed by the Department in the impugned orders is deemed to be set aside. Notably, the Notification did not specify the classification of the goods in question, leaving the decision on whether to classify under Chapter 33 as claimed by the Department or under Chapter 14 as claimed by the appellants undecided at the current stage.

As a result, the impugned orders were set aside, and the appeals were allowed to the extent of the confirmed demands. The judgment emphasizes the significance of the Notification in exempting the appellants from paying Central Excise duty during the specified period, without providing a definitive classification for the disputed goods.