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2024 (7) TMI 685 - AT - Central Excise


Issues Involved:
1. Classification of the product Suncros UVA Lotion/Gel/Hyclean Cream as medicaments or cosmetics under the Central Excise Tariff Act, 1985.
2. Invocability of the extended period of limitation in the case of a show cause notice dated 06.03.2013.

Analysis:
1. Classification Issue:
The appellant contended that the product should be classified under heading No. 30049099 as "Medicaments" and be eligible for a concessional rate under a specific notification. They argued that the product, made of various drugs and chemicals, was for protection against UV rays and required administration by licensed professionals. The product label indicated it should be sold on a medical practitioner's prescription, aligning with Rule 96 of the Drugs and Cosmetics Rules, 1945. The Tribunal found the product prima facie classifiable as medicaments due to its composition and intended use. It criticized the adjudicating authority for presuming the product as cosmetics without expert verification, recommending a reevaluation.

2. Extended Period of Limitation Issue:
Regarding the extended period demand, the Tribunal noted the complexity of classifying goods as medicaments or cosmetics, citing previous litigations. The appellant's regular filing of ER1 returns, declaring the product under the medicament classification, indicated no intent to evade duty. The objection raised during an audit did not imply suppression of facts to evade duty payment. Consequently, the demand for the extended period was set aside, while the matter was remanded to the adjudicating authority for reconsideration during the normal period. The Tribunal emphasized that the demand's sustainability was not based on limitation grounds.

In conclusion, the Tribunal set aside the impugned order, nullified the demand for the extended period, and remanded the case for reevaluation under the normal period. The judgment highlighted the importance of expert verification in classifying technical products and emphasized the lack of evidence suggesting duty evasion by the appellant.

 

 

 

 

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