2018 (7) TMI 912 - AT - Central Excise

Classification of goods - Laltel and Janma Ghunti - whether the goods classifiable under Chapter Sub-heading 3003.39 of Central Excise Tariff Act, 1985 which pertains to the Ayurvedic Medicines or under Central Excise Tariff Chapter Subheading 3003.39 but under Chapter 33.01 as aqueous distillate of essential oil? - Held that - The Ld. Commissioner in hurry to adjudicate the order has not followed the instructions of this Tribunal in its letter and spirit. The adjudicating authority has grossly erred in holding that this Tribunal in DABUR (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JSR 2002 (6) TMI 70 - CEGAT, KOLKATA had held that the Janam Ghunti is classifiable under Chapter Sub-heading 3301 as detailed in preceding Paras 5 & 6 - The ld. Commissioner has also not considered the submissions made by appellant during the course of hearing wherein the appellant had offered samples of the same products manufactured by their other factory which is still manufacturing the same product with same composition for undertaking necessary chemical test for deciding the composition of the products. It is also seen that the Ld. Commissioner has also failed to verify the practice of classification of the same products followed in the other Commissionerate. Matter remanded to the original adjudicating authority for denovo adjudication with the directions that the instructions given by this Tribunal should be followed in its letter and spirit - appeal allowed by way of remand.

Issues:
Classification of Ayurvedic preparations under Central Excise Tariff Act, 1985 - Correct classification of products - Time limitation for duty demands - Treatment of price as cum-duty - Compliance with Tribunal's instructions - Adjudication based on chemical tests and relevant evidence.

Detailed Analysis:

1. Classification of Ayurvedic Preparations:
The appeal involved the classification of Ayurvedic preparations under the Central Excise Tariff Act, 1985. The dispute arose regarding the correct classification of the products, namely Laltel and Janma Ghunti, under Chapter Sub-heading 3003.39. The Department contended that the products should be classified under Chapter 33.01 as aqueous distillate of essential oil. The Tribunal, in its earlier order, remanded the issue to the Commissioner for re-consideration based on relevant evidence and chemical tests to determine the accurate classification.

2. Time Limitation for Duty Demands:
The issue of time limitation for duty demands was raised, with the Tribunal emphasizing that duty demands raised beyond six months, as prescribed in Section 11A of the Central Excise Act, would be time-barred. The Tribunal held that duty demands should be restricted to the normal period of six months prior to the issuance of the show cause notice, in accordance with the legal provisions.

3. Treatment of Price as Cum-Duty:
The Tribunal directed that the duty demand should be re-computed treating the price as cum-duty, aligning with established precedents and decisions. The treatment of price as cum-duty was deemed appropriate, as per the rulings of the Tribunal and the Apex Court, ensuring consistency in duty calculations.

4. Compliance with Tribunal's Instructions:
The appellant argued that the Commissioner did not fully consider the Tribunal's previous order and failed to follow the instructions provided therein. The Tribunal found that the Commissioner did not adhere to the Tribunal's directions in the earlier order, leading to errors in classification and adjudication. It was emphasized that the Commissioner should have followed the Tribunal's instructions in their entirety for a correct decision.

5. Adjudication Based on Chemical Tests and Relevant Evidence:
The Tribunal stressed the importance of adjudication based on chemical tests and relevant evidence to determine the classification of products accurately. The Commissioner's failure to consider the submissions made by the appellant, including the availability of samples for testing and the classification practices in other areas, was highlighted as a deficiency in the adjudication process. The Tribunal ordered a remand back to the original adjudicating authority for denovo adjudication, with specific instructions to follow the Tribunal's previous order and consider all relevant factors, including chemical tests and sample availability.

In conclusion, the judgment addressed various critical issues related to the classification of Ayurvedic preparations, time limitations for duty demands, treatment of price, compliance with Tribunal instructions, and the necessity of adjudication based on chemical tests and relevant evidence for accurate classification. The Tribunal's decision emphasized the importance of following legal procedures and considering all relevant factors in determining the correct classification of products under the Central Excise Tariff Act.

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