2016 (12) TMI 27 - AT - Central Excise

Classification - Olemessa Baby Massage Oil - Held that - the decision of the Tribunal on the very same product made by the appellant dealt with the classification in the new tariff under heading 1508.90. It was noted that the classification list dated 01/03/1986 and 01/4/1986 of the appellants were also finally approved under heading 1508.90 based on earlier decision of the Tribunal. It was also recorded that the earlier decision of the Tribunal dated 31/01/1990 holding the classification of the product under T.I. 12 has been affirmed by the Apex Court also - Appeal allowed - decided in favor of the assessee.

Summary

Issues:
Classification of Olemessa Baby Massage Oil (OBM Oil) under Central Excise Tariff Heading, re-examination of classification by the Department, applicability of previous decisions and orders, legal tenability of the impugned order.

Analysis:
The dispute in this case revolves around the classification of Olemessa Baby Massage Oil (OBM Oil) prepared and sold by the appellant. The appellant had been facing classification issues since 1984 when a show cause notice was issued, alleging that OBM Oil is a "cosmetic and toilet preparation." Initially, it was held that OBM Oil was not a preparation at all and was classified under a different category. On appeal, the Tribunal decided that OBM Oil should be classified as 'vegetable non-essential oil' under a specific tariff item. Subsequent appeals and orders upheld this classification until a fresh examination was initiated by the Department in 1994. The Commissioner (Appeals) differed from the earlier decision, leading to a series of appeals and counter-appeals, including a writ petition before the Delhi High Court.

The High Court set aside the Commissioner (Appeals) order and directed a fresh examination based on the law laid down by the Tribunal in a previous order. The impugned order dated 30/04/2013 was passed in these denovo proceedings, where it was held that OBM Oil could not be classified under the specific heading as it was not merely groundnut oil. The Tribunal noted that the previous decisions and approvals had classified the product under the specific heading, and there was no appeal against those decisions. The Tribunal found that the attempted reclassification of the product by the Department, despite no material change in composition or use, was not legally tenable. Therefore, the impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal emphasized the importance of consistency in classification decisions, especially when there is no change in the product's composition or use over several decades. The Tribunal reiterated that the earlier decisions and approvals in favor of the appellant's classification claim should be upheld, and attempts to reclassify the product without valid grounds are not legally sustainable. The impugned order was deemed unsustainable, and the appeal was allowed in favor of the appellant.