2014 (1) TMI 268 - AT - Central Excise

Correct classification of Roop Amruta Under Chapter Heading 3004 9011 as Ayurvedic Medicine or not Waiver of Pre-deposit Extended period of limitation - Held that - ER-I clearly disclosed that the classification of the applicant goods is under Chapter 30 - The appellants request to get the goods tested by an Ayurvedic Laboratory or Drug Controller of India stands rejected by the adjudicating authority on the sole ground that the Revenue is very sure about the classification as contained under Chapter 33 - invocation of extended period was not justified - tooth powder attracts nil rate of duty whereas the appellant was paying duty on the Daant Pari - This fact reflects the appellant s understanding of the dispute and their plea that their products are nothing but medicines Pre-deposits waived till the disposal stay granted.

Summary

Issues:
1. Correct classification of the product "Roop Amruta" under Chapter Heading 3004 9011 or 3304 9910.
2. Justification of demand raised by invoking the longer period of limitation.
3. Dispute regarding the classification of another product named "Daant Pari" as tooth powder.

Analysis:
1. The dispute in the appeals revolves around the correct classification of the product "Roop Amruta." The appellant argues it should be classified under Chapter Heading 3004 9011 as an Ayurvedic medicine, while the Revenue contends it belongs under Heading 3304 9910. The duty liability differs based on the classification under Section 4 or Section 4A. The Tribunal observed that the appellant had consistently declared the product under Chapter 3004.9011, and the invocation of the extended period for demand was deemed unjustified.

2. The demand was raised through a show cause notice invoking the longer period of limitation, but the appellant's ER-I return clearly indicated the classification under Chapter 30. The adjudicating authority did not dispute this classification but alleged it was done to mislead the Revenue. The request for testing the goods by an Ayurvedic Laboratory was denied, leading the Tribunal to conclude that the extended period invocation was unwarranted.

3. Additionally, the appellant's classification of another product, "Daant Pari," as an Ayurvedic medicine under Chapter 30 was shifted by the adjudicating authority to tooth powder under a different chapter. This discrepancy in classification, where tooth powder attracts nil duty rate but duty was being paid by the appellant, supported the appellant's claim that their products were medicinal in nature. Consequently, the Tribunal dispensed with the pre-deposit condition for all dues and penalties, allowing the stay petitions unconditionally.

Misc Applications:
Two miscellaneous applications sought early hearing of the stay petitions, which were disposed of concurrently with the main stay petitions, resulting in the unconditional allowance of the stay petitions.