2009 (10) TMI 301 - AT - Central Excise

Classification- perfumes- The respondents are engaged in manufacture of Aerosol products including dress perfumes since 1998. The respondents have been classifying the product in question under Chapter Heading 3303.00 from 1-2-1999. Prior to that the product was being classified under heading 3307.49 and the respondents were paying excise duty @ 18% adv. Pursuant to the revised declaration filed on 1-2-99 under Rule 173B of the Central Excise Rules, 1944 the classification of dress perfumes was claimed under chapter heading 3303.00 and further exemption was sought to be claimed in terms of Notification No. 167/86-C.E., dated 1-3-1996. Show cause notices dated 22-6-99 and 3-11-99 came to be issued to the respondents and after hearing the parties, the said order came to be passed by the Deputy Commissioner, had held that the perfume manufactured by the respondent is classifiable under Chapter Heading 3307.90 and would attract duty @ 30% and, therefore, had confirmed the demand. Held that- similar dispute in relation to same product for subsequent period decided in favour of assessee. Nothing pleaded to justify different view. Thus perfume classifiable under sub-heading 3303.

Summary

Issues:
- Classification of the product under Chapter Heading 3303.00 or 3307.90
- Entitlement for exemption under Notification No. 167/86-C.E., dated 1-3-1996

Classification under Chapter Heading 3303.00 or 3307.90:
The appeal involved a dispute regarding the classification of a product by the respondent. The Deputy Commissioner had classified the perfume manufactured by the respondent under Chapter Heading 3307.90, attracting a duty of 30%. However, the impugned order set aside the original decision and upheld the respondent's claim that the product falls under sub-heading 3303.00, entitling it to an exemption under Notification No. 167/86-C.E., dated 1-3-1996. The respondent had been classifying the product under different headings in the past, with a recent declaration seeking classification under Chapter Heading 3303.00. The Tribunal noted that the HSN notes clarified that Chapter Heading 3303.00 covers perfumes designed to give fragrance primarily to the human body. The respondent argued that the product need not be used primarily on the human body to fall under this heading, and previous decisions in favor of the respondent supported this classification.

Entitlement for exemption under Notification No. 167/86-C.E., dated 1-3-1996:
The Tribunal considered the respondent's claim for exemption under Notification No. 167/86-C.E., dated 1-3-1996. The impugned order upheld the respondent's classification under Chapter Heading 3303.00, which allowed for this exemption. The Tribunal found that the HSN notes did not specify that the perfume must be used exclusively on the human body for this classification. The Tribunal dismissed the appeal, noting that no additional material was presented to justify a different view from previous decisions confirming the classification under Chapter Heading 3303.00. The Tribunal emphasized that the HSN notes only required the perfume to be designed to give fragrance primarily to the human body, leaving room for the product to be used on other objects that could transmit the fragrance to the human body.

In conclusion, the Tribunal upheld the classification of the product under Chapter Heading 3303.00, granting the respondent entitlement for exemption under Notification No. 167/86-C.E., dated 1-3-1996. The appeal was dismissed as the arguments based on the HSN notes were deemed unsubstantiated, and no other grounds were presented to challenge the impugned order.