2011 (3) TMI 1093 - AT - Central Excise

Benefit of notification No. 12/94-CE denied - Textile softener used for softening of textile fibers is lubricating preparation or not - penalty imposed - Held that - The issue stands decided against the appellants by the earlier decision of the Tribunal in their own case - As this being a bonafide dispute of admissibility of notification, imposition of penalty upon the appellants is not warranted

Summary

Issues:
1. Interpretation of Notification No. 12/94 regarding exemption for lubricating preparations under Chapter 3403.00.
2. Classification of textile softener as a lubricating preparation.
3. Consideration of previous tribunal orders in similar cases.
4. Applicability of penalty in case of mis-declaration for claiming exemption.

Analysis:
1. The main issue in this case revolves around the interpretation of Notification No. 12/94 concerning the exemption for lubricating preparations under Chapter 3403.00. The appellant claimed that textile softener falls under this category and is entitled to the benefit of the notification. However, the Commissioner (Appeals) denied this claim, stating that textile softener, despite having similar ingredients to lubricating preparations, cannot be considered as such. The tribunal upheld this decision, emphasizing that textile softener, used for oil and grease treatment in textiles, does not qualify as a lubricating preparation under the notification.

2. The classification of textile softener as a lubricating preparation was a key point of contention. The tribunal referred to a previous order in the same appellant's case, where it was established that textile softener, while falling under heading 34.03 of the Central Excise Tariff Act, is not a lubricating preparation eligible for the exemption under Notification No. 12/94. Despite the appellant's arguments citing other tribunal decisions, the tribunal maintained its stance based on the previous ruling and subsequent judgments, confirming the denial of the exemption.

3. The consideration of previous tribunal orders in similar cases played a significant role in the decision-making process. The appellant attempted to challenge the earlier tribunal decision by highlighting different cases where similar arguments were made. However, the tribunal, after reviewing these arguments and previous judgments, found no compelling reason to deviate from the established interpretation regarding the classification of textile softener and the applicability of the exemption notification.

4. Regarding the applicability of penalty for mis-declaration in claiming the exemption, the tribunal acknowledged that the dispute was a bona fide one concerning the admissibility of the notification. Consequently, the imposition of a penalty was deemed unwarranted, especially considering that in a previous case involving the same appellant, the penalty was set aside due to the classification nature of the issue. Therefore, the penalty was set aside in the present case, and the appeal was disposed of accordingly.