2012 (11) TMI 682 - AT - Central Excise

Waiver of pre-deposit classification of dental care products/tooth paste - appellant submits that the product contains medicaments having therapeutic or prophylactic properties which is meant for use for oral or dental hygiene and therefore, they are rightly classifiable under Heading No. 3003.10 of Central Excise Tariff Act, 1985 as P or P medicaments Held that - Merely because the dosage says that 10 ml twice daily or as directed by the Physician in case of Triguard Toothpaste and Triguard Mouthwash, it does not mean that these products need a Doctor s prescription for purchase - department was of the view that these products merit classification as Cosmetics or toilet preparations falling under Heading No. 3306.10 - In view of the higher abatement claim the appellant was liable to pay differential duty - product classified as Cosmetics or toilet preparations falling under Heading No. 3306.10 of the First Schedule to the Central Excise Tariff Act, 1985 appellant directed to make pre-deposit

Summary

Issues:
Classification of dental care products/toothpaste under Central Excise Tariff Act, 1985.

Analysis:
The appeal and stay application were directed against the order-in-appeal passed by the Commissioner of Central Excise (Appeals), Mumbai-I. The issue involved the classification of dental care products/toothpaste manufactured by the appellant under Chapter Heading No. 3003.10 of the Central Excise Tariff Act, 1985. The appellant claimed abatement of 42.5% of the MRP under Notification No. 2/2005-C.E.(N.T.), dated 7-1-2005. The department contended that these products should be classified as 'Cosmetics or toilet preparations' under Heading No. 3306.10, eligible for abatement only to the extent of 35% of the MRP under Notification No. 2/2006-C.E.(N.T.), dated 1-3-2006. A show-cause notice was issued to the appellant for the differential duty, which was adjudicated by the jurisdictional Asst. Commissioner, resulting in a confirmed duty demand, interest, and penalty. The appellant appealed against this decision.

The appellant argued that the products contain medicaments with therapeutic or prophylactic properties for oral or dental hygiene, thus classifiable under Heading No. 3003.10 as P or P medicaments. They emphasized the necessity of a Registered Medical Practitioner's prescription for the purchase of these goods, supporting their classification as P or P medicaments. The appellant cited previous Tribunal judgments in their favor. On the other hand, the Revenue argued that the products should be classified as 'Cosmetics or toilet preparations' under Heading 3306.10, aligning with the lower adjudicating and appellate authorities' findings.

The Tribunal analyzed the packaging of the products and noted that only two items explicitly required a Doctor's prescription for purchase. It was highlighted that Chapter Heading 33.06 covers preparations for oral or dental hygiene, even if they contain minor drugs, and should be classified under Chapter 33, not Chapter 30. Previous Tribunal and Supreme Court decisions were referred to, emphasizing the classification of similar products as 'Cosmetics or toilet preparations' despite having medicinal properties. The Tribunal found that the appellant failed to establish a prima facie case for complete waiver of pre-deposit of the dues adjudged.

In conclusion, the Tribunal directed the appellant to make a pre-deposit of 50% of central excise duty adjudged within a specified period, with the balance of dues adjudged waived upon compliance. The recovery of the waived balance was stayed during the pendency of the appeal. The judgment was pronounced on 19-12-2011.