2002 (10) TMI 143 - AT - Central Excise

Summary

Issues: Classification of "Liril Active Shower Gel" under the tariff - Heading 3401.10 vs. Heading 33.04.

In this judgment by the Appellate Tribunal CEGAT, Mumbai, the issue at hand is the classification of the product "Liril Active Shower Gel" manufactured by the appellant. The appellant had initially classified the product under Heading 3401.10 of the tariff, while the department, through notices invoking the extended period, proposed classification under Heading 33.04. The Commissioner confirmed the proposed classification in the notice and justified the invocation of the extended period of limitation, leading the manufacturer to appeal.

The crux of the matter lies in the interpretation of the tariff headings. Heading 34.01 encompasses soap and related substances, with subheading 10 specifically referring to "soap in any form." The department argued that the product in question, being a liquid soap with surface active products, did not fit the criteria for liquid soap as per the Explanatory Notes to the Harmonised System of Nomenclature (HSN), thus necessitating classification under Heading 33.04. The Commissioner rejected the appellant's contentions and upheld the classification under Heading 33.04 based on the product's composition, characteristics, and advertised use for skin care.

The Tribunal, after hearing arguments on the Explanatory Notes and the scope of classification, decided not to delve into those aspects. Moreover, the Tribunal did not find it necessary to address the arguments on limitation. Heading 33.04 pertains to beauty or skin care preparations, excluding medicaments, and includes various beauty products. The Tribunal highlighted that the product in question, primarily used for skin washing and bathing, did not align with the categories under Heading 33.04, contrary to the department's reliance on the advertised use of the product for classification.

Furthermore, the Departmental Representative suggested a reclassification under Heading 33.07 as bathing preparations, a contention not raised before the Commissioner and thus deemed impermissible at this stage. Citing a Supreme Court judgment, the Tribunal emphasized that new contentions cannot be introduced at the appeal stage. Consequently, the classification under Heading 33.04, as confirmed by the Commissioner, was overturned, and the appeals were allowed with consequential relief granted, setting aside the impugned order.