2020 (1) TMI 759 - AT - Central Excise

Classification of goods - Rexona - Lux - whether classified under S. H. No. 3401.10 of CETA or under sub-heading 3307.30 of CETA? - CBEC Circular No. 31/89 dt. 12/05/1989 - HELD THAT - The issue has been settled by the Tribunal in the case of appellants themselves in the case of HINDUSTAN LEVER LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR 2002 (10) TMI 143 - CEGAT, MUMBAI and was upheld by the Supreme Court in COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS HINDUSTAN LEVER LTD. 2013 (8) TMI 722 - SC ORDER , where it was held that the item in question is soap only for classification under Chapter Heading 34 and it is not bath preparation for classification under Heading 33.07 of the Central Excise Tariff Act as contended by the Revenue. Appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of products 'Rexona' and 'Lux' under CETA.

Analysis:
1. The appellants, engaged in manufacturing toilet soaps under various brands, claimed classification under S. H. No. 3401.10 of CETA. The Department issued a Show Cause Notice proposing to classify 'Rexona' and 'Lux' under sub-heading 3307.30 of CETA. The Commissioner confirmed this in the Order-in-Original dated 16/03/2012.

2. The Appellant's Counsel argued that the distinct feature of Bathing Preparations and Toilet soaps supports classifying 'Rexona' as soaps under S. H. No. 3401. The show Cause Notice proposed classification under 3307.30 based on the total fatty matter (TFM) content being less than 60%. The Counsel cited various judgments supporting the classification under Sub-Heading 3401.10 and not under Sub-heading 3307.30.

3. The Supreme Court's decision in the case of Hindustan Lever Ltd. rejected the Department's appeal and upheld the Tribunal's decision. Circulars by CBEC clarified the classification of similar products under Chapter 34. The Appellant also argued against invoking the extended period due to regular compliance with reporting requirements.

4. The Department's Authorized Representative reiterated the findings of the Order-in-Original.

5. The Tribunal found that the issue had been settled in previous cases involving similar products. Referring to the Tribunal's decision in the case of Dove, it was concluded that the TFM content is not the basis for classification. The judgment emphasized the commercial understanding and everyday household use of toilet soaps, leading to the classification under Chapter Heading 34. The impugned order was set aside, and the appeal was allowed with consequential relief.

This detailed analysis covers the classification issue of products 'Rexona' and 'Lux' under CETA, highlighting the arguments presented, relevant judgments cited, and the final decision rendered by the Tribunal.