2008 (10) TMI 310 - AT - Central Excise

Attar Hina Special and Attar Shamma. - The products in dispute are mixtures of odoriferous substances and mixtures with basis of one or more substances of a kind used as raw materials in Gutka, Pan Masala or tobacco industry - contention of Revenue that the two products are classifiable under CETH 3302.90 and therefore cannot avail exemption in terms of Notification No. 167/1986-C.E., is acceptable revenue has produced evidence of clearance of similar products by other manufacturers classifying the same under CETH 3302 - Held that impugned product cannot be classified under Chapter Heading 3301 as these are neither essential oils nor its absolute and concentrates, nor they can be called extracted Oleoresins, concentrates of essential oils and aqueous distillates or solutions. Classification sought by revenue is acceptable - proviso to Section 11A (1) is applicable for invocation of extended period of limitation

Summary

Issues:
Classification of products under CETH 3301 or 3302, applicability of exemption notification, time-barred show cause notice, misdeclaration in declaration filed, end use of manufactured products.

Classification under CETH 3301 or 3302:
The appellant, engaged in manufacturing Attar Hina Special and Attar Shamma, claimed exemption under Notification No. 167/1986, arguing that the products were classifiable under CETH 3301. The Revenue contended that the products fell under CETH 3302. The appellant's advocate emphasized that the manufacturing process resulted in essential oils, classifiable under CETH 3301, not as mixtures of oils under CETH 3302. However, the Revenue pointed out evidence of essential oils and attars being added, leading to classification under CETH 3302. The Tribunal observed that the products were mixtures used in industries like Gutka, Pan Masala, or tobacco, falling under CETH 3302 based on manufacturing process and end use, rejecting the appellant's classification argument.

Exemption Notification and Time-Barred Notice:
The appellant argued for exemption under Notification No. 167/1986, claiming the show cause notice was time-barred. However, the Revenue highlighted misdeclarations in the declaration and absence of process details, supporting the notice's validity. The Tribunal noted the misdeclaration and lack of process information, affirming the notice's timeliness and dismissing the exemption claim.

End Use and Misdeclaration:
The Revenue emphasized the end use of the products as raw materials for Gutka manufacturing, contradicting the appellant's claim of manufacturing only from herbs and spices. The Tribunal found evidence of essential oils and attars being added, supporting the Revenue's position. Additionally, the misdeclaration in the declaration and absence of process details further weakened the appellant's case.

Judicial Precedents and Competitor Classification:
The Revenue cited judicial decisions and invoices from manufacturers classifying similar products under CETH 3302 for Gutka production. The Tribunal considered these precedents and competitor classifications, along with evidence of essential oils and attars being used, to uphold the Revenue's classification and reject the appellant's appeal.

In conclusion, the Tribunal dismissed the appeal, emphasizing the products' classification under CETH 3302 based on manufacturing process, end use, competitor classifications, and judicial precedents, while rejecting the exemption claim and time-barred notice arguments.