2016 (3) TMI 125 - AT - Central Excise

Differential duty demand - valuation under Section 4 or Section 4A - appellant is engaged in the manufacture of cleaning liquids like floor cleaners, utensil cleaners, glass cleaners, etc. - Revenue felt that the appellant s products attracted duty on MRP, in terms of Notification No. 49/2008 (N.T.), dated 24-12-2008 issued in terms of Section 4A of Central Excise Act - Held that - There is no dispute about the fact that the Entry 3402, under which the appellant s products fall, is one of the specified entry under Sl. No. 40. The said entry relates to organic surface active products. The description of the goods appearing against the said entry clearly reflects upon the intention of the legislation that it is only the organic surface active products and preparations for use as soap, which are in the shape of bars, cakes, moulding pieces or shapes, which would get covered under the said entry. If the Revenue s contention is correct, the entry, according to us, would have read as preparations for use as soap in the form of bars, cakes, moulding pieces or shapes and organic surface active products . In other words if the legislature intended to cover all the organic surface active products, which may be in a shape other than bars, cakes, moulded pieces or shapes, they would have referred to the organic surface active products, after describing the preparations for use as soap in the form of bars, cakes, moulding pieces or shapes. There is no warrant to hold that the expression in the form of bars, cakes, moulding pieces or shapes referred to only preparations for use as soaps and not to organic surface active products. The overall reading of the entry clearly reveals that both the products should be in the form of bars, cakes, moulding pieces or shapes so as to attract the said Sl. No. 40. In view of the above, we find that Sl. No. 40 does not cover organic surface active products, in liquid form and as such, their assessment to duty under Section 4A is not called for. Accordingly, the impugned order of Commissioner (Appeals) is set aside and the order of the original authority is restored.

Summary

Issues:
Interpretation of Notification No. 49/2008 for duty assessment under Central Excise Act.

Analysis:
The appellant, engaged in manufacturing cleaning liquids, faced proceedings for duty payment based on MRP under Notification No. 49/2008. The original adjudicating authority accepted the appellant's argument that as the goods were in liquid form, they were not covered under the notification. However, the Commissioner (Appeals) reversed this decision, stating that the notification's scope includes organic surface active products and preparations for use as soap. The Commissioner emphasized that the form requirement applies only to soap preparations, not organic surface active products like those manufactured by the appellant.

The Tribunal analyzed the relevant tariff entries and the notification's wording. They concluded that the notification's intent was to cover only organic surface active products and soap preparations in specific forms. The Tribunal found that the appellant's products, falling under Heading 3402 and being in liquid form, did not fall under the notification's purview. They emphasized that the legislative intent was clear in requiring products to be in bars, cakes, or shapes to attract the notification's duty provisions.

In light of the above analysis, the Tribunal set aside the Commissioner (Appeals) decision and upheld the original authority's order. They ruled that the appellant's products, as organic surface active products in liquid form, were not liable for duty under Section 4A of the Central Excise Act. The appeals were allowed in favor of the appellant, providing consequential relief as necessary.