2007 (8) TMI 150 - AT - Central Excise

Classification As per appellant the products(pears face wash) manufactured by him classifiable under Chapter 3402 but as per revenue classifiable under Chapter 3304 After considering the fact tribunal decided in favour of appellant

Summary

Issues: Classification of the product "Pears Face Wash" under Chapter 3304, extended time limit invocation, reliance on literature for classification, presence of essential and subsidiary constituents in washing preparations.

Classification Issue Analysis:
The case involved a dispute over the classification of the product "Pears Face Wash" under Chapter 3304. The appellant claimed the product to be a liquid detergent primarily used for cleaning the body, face, etc., and argued that the addition of a small quantity of milk protein did not categorize it as a product for skin care. The appellant contended that the literature or claims on the carton should not be the sole criteria for classification. The Tribunal analyzed the relevant tariff entries, chapter notes, and HSN notes to determine the appropriate classification. It was noted that washing preparations may contain both essential and subsidiary constituents, such as perfumes, without altering their primary purpose as detergents. The Tribunal emphasized that exaggerated claims on product labels are common in trade and cannot solely dictate classification. No expert opinion or test reports were presented by the Department to support the classification as a skin tonic. The Tribunal accepted the appellant's classification claim based on the composition and purpose of the product as a surface active agent for cleaning.

Extended Time Limit Issue Analysis:
The appellant argued against the invocation of the extended time limit, stating that they had provided detailed clarifications in response to audit queries in February 1998, and thus, there was no willful suppression of relevant facts. The Tribunal agreed with the appellant, noting that the detailed submissions made in 1998 negated the need for invoking the extended time limit. Consequently, the show cause notice issued in 2000 for duty demand from 1996 to 1997 was deemed unjustified.

Literature Reliance Issue Analysis:
The Department relied on the literature accompanying the product, which claimed it was for skin care, to support its classification under Chapter 3304. However, the Tribunal reiterated that such claims on packaging cannot be the sole basis for classification. The Tribunal emphasized that the composition provided by the appellant, which remained undisputed, and the intended use of the product as a surface active agent for cleaning, were more relevant factors for classification.

Presence of Essential and Subsidiary Constituents Issue Analysis:
The Tribunal highlighted that washing preparations may contain essential and subsidiary constituents, including perfumes, without altering their classification as detergents. The presence of such additional constituents does not automatically categorize the product as a skin care item. The Tribunal emphasized that the appellant's product, as a liquid detergent primarily based on surface active agents, did not warrant classification as a skin tonic based on the provided evidence and lack of contradicting expert opinions.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the appellant on both merit and limitation grounds, emphasizing the importance of considering the product's composition and purpose for accurate classification, while dismissing the reliance on packaging claims and justifying the non-invocation of the extended time limit.