2013 (4) TMI 79 - AT - Central Excise

Classification - combipack - essential character - manufacture of All Out Refill Bottles containing insecticides falling under Chapter Heading 3808.10 or under heading 8516 - Held that - The question arises here is what would be the right classification for combipack. After considering the General Rules for the Interpretation of this Schedule to the Central Excise Tariff Act, 1985 it is clear that the combipack comprises of two different articles classifiable under different chapters and sub-heading of the Central Excise Act, 1985, the classification of combipack would be governed by Rule 3(b) of the above quoted Rule. Now the question arises, which of the two components, i.e. electro thermic apparatus or refill bottle of pesticides gives essential character to the combination pack. To find answer to this question, it would be essential to look at the combination pack from the buyer s perspective. - the right classification for the combipack would be under Chapter heading 3808.10. - Decided in favor of assessee.

Summary

Issues: Classification of combination pack containing insecticides and electro thermic apparatus under Central Excise Tariff Act, 1985

Classification Issue:
The appeal involved a classification issue regarding a combination pack manufactured by the appellant, comprising insecticides refill and electro thermic apparatus. The appellant claimed the classification under Chapter Heading 3808.10, while the Department contended it should be classified under Chapter Heading 8516.

Facts and Background:
The appellant manufactured a combination pack known as 'All Out Combi Pack' containing insecticides refill and electro thermic apparatus. The dispute arose when the Department issued a show cause notice proposing to reclassify the combination pack under Chapter Heading 8516, considering the apparatus as the main product.

Appellant's Argument:
The appellant argued that the essential character of the combination pack was as a mosquito repellent, classified under Chapter Heading 3808.10, based on the General Interpretation Rule of the Central Excise Tariff Act, 1985.

Previous Orders:
The Additional Commissioner upheld the classification under Chapter Heading 3808.10, but the Commissioner (Appeals) reversed this decision, classifying the combination pack under Chapter Heading 8516, emphasizing the apparatus as the main product.

Analysis and Decision:
The Tribunal analyzed the interdependence of the insecticides refill and electro thermic apparatus for functional use in the combination pack. Refill bottle without the apparatus is useless as a mosquito repellent, and the apparatus alone serves no purpose without the insecticides.

Legal Interpretation:
Referring to the General Rules for Interpretation of the Central Excise Tariff Act, the Tribunal applied Rule 3(b) to determine the classification of the combination pack. Rule 3(b) states that goods put up in sets for retail sale should be classified based on the component giving them their essential character.

Buyer's Perspective:
Considering the buyer's perspective, the Tribunal concluded that the liquid pesticides bottle provided the essential character of a mosquito repellent to the combination pack, as the apparatus merely facilitated the vaporization of the pesticide.

Decision and Conclusion:
The Tribunal set aside the Commissioner (Appeals) order and classified the combipack under Chapter Heading 3808.10, relating to insecticides, emphasizing that the liquid pesticides bottle determined the essential character of the combination pack. The appeal was accepted, and the impugned order was overturned.

Final Outcome:
The appeal was disposed of in favor of the appellant, with the Tribunal pronouncing the decision in open court on 25-6-2012.