9911796707
TMI Blog1995 (8) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-heading 3401.10 and also claimed benefit of the exemption under Notification No. 175/86. This sub-heading 3401.10 CETA covers soap in any form. The classification list was, in due course, approved by the department. Similarly, their classification list for 1990-91 was also approved. On 17-6-1991, the Central Excise officers visited the factory of the appellants and recorded a statement from Shri Lekhraj Sharma, Production Manager of M/s. Hosiden Laboratories since no responsible person of the appellant unit was present at that time. The name `Otion of M/s. Hosiden Laboratories was being used by the appellants and the Hosiden Laboratories were also marketing the products of the appellants. A stock verification was done and 363 po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se under Section 11A of the Central Excises Salt Act, 1944 on the ground that the appellants suppressed the material facts from the department. He also imposed a penalty of Rs. 20,000/- on the appellants under Rule 173Q of the Central Excise Rules. 2. Shri Shiv Das, ld. Counsel appearing for the appellants, contended that the demand is time-barred. The dispute relates to the period August, 1989 to October, 1990 whereas the show cause notice was issued on 14-12-1991, well beyond the time limit under Section 11A. The ld. Counsel contended that the appellants cannot be charged with suppression of facts because they have cleared the goods on the basis of approved classification list. The department had also approved the classification after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board has noted that for classification as `soap under sub-heading 3401.10 the essential character of the product is relevant which is given to the product by sodium salt of fatty acids which had a preponderant predominance over Organic Surface Active Agent. Here also the criterion of how the product is marketed for deciding the classification was laid down. The ld. Counsel submitted that even composition-wise the ingredients of their product confirmed to those of soap in any form. This was also the case even with reference to the definition as per the Hawleys Condensed Chemical Dictionary, which was relied upon by the department, their product also consists of fatty acids and contains sodium sulphate and alkali. The product conforms to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould fall outside the scope of Chapter 33 because they are not exclusively for use on the hair. 3. Shri J.P. Singh, ld. D.R. contended that the printed information on the pouch clearly shows that it is for use on the scalp and hair. The ingredient, reetha, is usually for washing hair. Further, their letter of 6-9-1989, significantly, does not disclose all the ingredients mentioned on the product literature. The product, herein, the ld. D.R. urged, is not covered by any type of soap given under Heading 3401 in the HSN Explanatory Notes. The fact that full particulars regarding ingredients were not disclosed to the department by the appellants, would justify invoking the longer period. In this context, ld. D.R. relied upon the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en given by the Collector, is not sustainable. Therefore, the contentions of the appellants on limitation are accepted and the demand is, therefore, held to be hit by time bar under Sec. 11A of Central Excises Salt Act, 1944. Even on merits, there is no detailed discussion by the Collector and rebuttal of their claim that the goods are not only meant solely for use on the hair and as such, will not fall under sub-heading 3305 CETA. The Chemical Examiner also, while giving his opinion has not adverted to this aspect, which is available in the product literature of use on skin. It would have been also more appropriate, had the department confronted the appellants on this aspect with evidence as to how the goods are being marketed, especiall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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