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2014 (8) TMI 470 - AT - Central ExciseClassification of goods - Coconut Oil packed in 200 M.L. of plastic containers - Held that - Board issued a Circular No. 890/10/2009-CX dated 03/06/2009 laying down that classification of Coconut Oil packed in small containers upto 200 M.L. would be considered as hair oil which would fall under heading 3305 and not under Chapter 15 of the Central Excise Tariff Act, 1985. After issuance of the said circular, the appellant, under the advice of their Jurisdictional Central Excise Authorities, started clearing the said product on payment of duty in terms of Chapter 33 classification, under protest. Attention has also been drawn to the outer label on the container indicating that the Coconut Oil is Edible Coconut Oil. Learned DR is disputing the said fact on the ground that he is not sure about the label being a label of 200 M.L. pack - matter remanded back for ascertaining facts of the case.
Issues:
Correct classification of Coconut Oil packed in 200 M.L. plastic containers under Chapter 15 as Edible Coconut Oil or Chapter 33 as "preparation for use on the hair". Analysis: The dispute in the appeal revolves around the classification of Coconut Oil packed in small containers. The appellant argues for classification under Chapter 15 as Edible Coconut Oil, while the Revenue classifies it under Chapter 33 as a "preparation for use on the hair." The Board's Circular No. 890/10/2009-CX dated 03/06/2009 specified that Coconut Oil in containers up to 200 M.L. should be classified as hair oil under heading 3305, not under Chapter 15. Following this circular, the appellant cleared the product under Chapter 33 classification, paid duty under protest, and later sought a refund, leading to the current appeal. The Commissioner (Appeals) disregarded Tribunal decisions predating the Board Circular, favoring the Circular over Tribunal decisions. However, the appellant contends that the Tribunal decisions, including the case of Capital Technologies Ltd. & Others vs. CCE, Tirupati, did not align with the Circular. The Kerala High Court decision in Marico Limited vs. Union of India emphasized that Revenue should adhere to Tribunal decisions unless appealed to the Apex court. Thus, the matter should have been decided based on Tribunal decisions rather than the Board Circular. Given the above, the case is remanded to the original Adjudicating Authority for a fresh assessment. The Authority must consider the impact of amendments in Chapter Note 2 of Chapter 33 and Section Note 2 of Section VI, as highlighted by the Departmental representative. Additionally, the Authority should review whether the Board Circular and its amendments were previously addressed by the Tribunal. The ongoing challenge of the Circular in the Allahabad High Court, transferred to the Apex court, and its consideration by the Kerala High Court, should also be taken into account. Furthermore, the Adjudicating Authority must examine the factual accuracy of the label on the container indicating the Coconut Oil as "Edible," particularly concerning the 200 M.L. pack. The reevaluation is necessary to determine the correct classification based on factual and legal considerations, including various Tribunal decisions and the unjust enrichment aspect. The final decision will be contingent upon the legal and factual analysis conducted during the reconsideration process.
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