1994 (8) TMI 131 - AT - Central Excise

Summary

Issues:
1. Time-barred demand for central excise duty.
2. Classification of Arnica Oil as cosmetic or homeopathic medicine.
3. Suppression of facts by the appellant.
4. Calculation of duty amount and assessable value.
5. Approval of classification list and consideration of manufacturing homeopathic medicines.

Analysis:
1. The appellant contended that the demand for central excise duty was time-barred as the show cause notice was issued much after the normal period of six months. They argued that the longer period of limitation was not applicable as they had provided all necessary information to the department within the relevant period. The department's delay in issuing the notice was highlighted as a ground for the demand being time-barred.

2. A dispute arose regarding the classification of Arnica Oil, with the appellant claiming it to be a homeopathic medicine under Chapter 3303.30, while the department classified it as a cosmetic preparation under Chapter 3305.10. The appellant emphasized that Arnica Oil was manufactured under a drug license, sold through licensed dealers of homeopathic medicines, and labeled as a medicine, supporting its classification as a homeopathic product.

3. The department alleged suppression of facts by the appellant, stating that they did not clearly indicate the excisable and non-excisable products in their classification lists. The appellant's delayed response to the department's request for details was highlighted as evidence of suppression. The department argued that the relevant date for calculating the time bar should consider the provisions of Section 11A.

4. Discrepancies in the calculation of duty amount were raised by the appellant, claiming that discounts were not considered, and the duty was based on clearance value rather than assessable value. This issue was deemed as a matter of detail to be addressed during the main appeal hearing, along with the validity of test reports and certificates submitted by both parties.

5. The tribunal observed that the appellant seemingly had a stronger case on the time bar issue due to the department's delayed issuance of the show cause notice. The approval of the classification list, which indicated the manufacturing of homeopathic medicines, raised questions about how it was initially approved. The tribunal suggested that the consideration of manufacturing homeopathic medicines should have been taken into account during the approval process, even if detailed information was lacking.

In conclusion, considering the totality of facts and circumstances, the tribunal waived the pre-deposit of the disputed amount and stayed the recovery during the appeal's pendency. The detailed issues of classification, suppression of facts, and calculation discrepancies were deemed more suitable for examination during the main appeal hearing.