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2018 (12) TMI 2009 - AT - Central ExciseExemption from duty for henna powder and paste under N/N. 12/2013-CE - HELD THAT - It ss noted that the objection of the Revenue, that no other ingredients should have been added to claim the exemption, is correct. However, the facts of the present case did not reveal that any other ingredients at all has been added in making the henna paste. Admittedly, the clove oil is a liquid used to make henna paste from powder and make it marketable as such paste in cones. The said process is for making the paste marketable/useable much later by the customers. There is no addition of any active ingredients to heena powder to make the heena paste other than the said oil or liquid. Conclusion - The use of clove oil as a medium to make the henna paste marketable does not constitute mixing with other ingredients as per the exemption's terms. The exemption stands allowed. Appeal allowed.
The judgment from the Appellate Tribunal CESTAT New Delhi, presided over by Hon'ble Shri Anil Choudhary and Hon'ble Shri Bijay Kumar, addresses an appeal concerning the denial of an exemption from central excise duty for henna powder and paste under Notification No. 12/2013-CE. The appellant, engaged in manufacturing henna products, claimed exemption under Sl. No. 134 of the notification, which stipulates that henna products "not mixed with any other ingredient" are subject to a nil rate of duty.
The Tribunal considered the clarification issued by the Board on 10.07.2014, which stated that the exemption applies to henna powder mixed with a liquid solely to convert it into a paste, excluding products like henna dye. The Revenue argued that the inclusion of other ingredients disqualifies the exemption. However, the appellant contended that clove oil was used only to preserve and market the henna paste, without adding any other active ingredients. The Tribunal found that the use of clove oil as a medium to make the henna paste marketable does not constitute mixing with other ingredients as per the exemption's terms. Thus, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant.
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