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TMI Blog2015 (7) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... se-Up Whitening loses the character of toothpaste and assumes the characteristics of another product, namely, dental cleaner. There is no evidence on record placed by the Revenue which would reflect that the product in question is known to the consumers as toothpaste. - that Close-Up Whitening is not a toothpaste but a dental cleaner. We are convinced that this finding is perfectly just and proper - Close-Up Whitening dental cleaner is not a 'toothpaste' but other form of dental hygiene and, therefore will have to be classified under sub-heading 3306.90 as a consequence. - Decided against Revenue. - Civil Appeal Nos. 5902-5909 of 2005, Civil Appeal No. 3569 of 2006 - - - Dated:- 28-7-2015 - A. K. Sikri And Rohinton Fali Nariman,JJ. JUDGMENT A. K. Sikri, J. The respondent No.1 (hereinafter referred to as the 'assessee') is engaged in the manufacture of different brands of toothpaste and these are manufactured exclusively for M/s. Hindustan Lever Limited, Mumbai (for short, 'HLL') since 1998. Major brands of HLL manufactured by the assessee are Close-Up Red, Close-Up Blue, Close-Up Green and Pepsodent falling under Chapter 33 of the Excise Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter sub-heading 3306.10, show-cause notice stated as to why the amount of differential duty amounting to ₹22,64,176 be not confirmed under the provisions of Section 11A(1) of the Act and why redemption fine in lieu of confiscation as well as penalty be not imposed. The assessee filed its reply thereto contending that it was not a toothpaste and, therefore, rightly classified by it under sub-heading 3306.90. The aforementioned contention of the assessee was brushed aside by the Commissioner in his Order-in-Original dated December 10, 2003, thereby confirming the excise duty demand as mentioned in the show-cause notice. He, inter alia, recorded the following findings in his order: (i) Close Up Whitening was known in the market or to the trade and public as tooth paste for cleaning the teeth as such it was nothing but tooth-paste used for cleaning the teeth. (ii) M/s. Global Health Care Products in collusion with M/s. Hindustan Lever Ltd. by willfully suppressing the fact that Close-up Whitening was a variant of Close Up tooth paste classifiable under Tariff Heading 3306.10 failed to show particulars of classification, assessable value and duty leviable with an intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be justified. On the other hand, if the product does not qualify to be a toothpaste, then the assessee stands vindicated. 8) Having noticed the controversy involved, we would like to point out the main ingredients of the product at this stage: There is no dispute that most of the ingredients of the product Close-Up Whitening are the same which are used in the manufacture of the other products, namely, Close-Up Red/Blue/ Green, which are treated as toothpaste by the assessee itself. There are, however, additional ingredients used in the manufacture of the product in question, which are accepted by the Revenue also and noticed above. Apart from additional presence of Silicon Agglomerate and Bluer Agglomerate of specified percentage and absence of Tri Chloro 2 hydroxy Diphenyl Ether, there is a presence of uniformity dispersed blue speckles in Close-Up Whitening. There is also additional step of 'addition of silica agglomerates'. In fact, it is this ingredient which felicitates at getting uniformity dispersed speckles. It is on the basis of these additional factors, one has to determine as to whether Close-Up Whitening loses the character of toothpaste and assumes the char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he product was known as toothpaste. He also observed that it is treated as toothpaste as per the product manual issued by the Dental Invocation Centre, Mumbai. Discussion is summed up in para 32 of the order passed by the Commissioner, which reads as under: 32. As narrated in the SCN that the tooth paste, being dentifrice has been correctly classified under the HSN and the Central Excise Tariff has been based on HSN. Accordingly it is essential to follow the correct classification of the product in question as described and classified under the relevant chapter of HSN. In this connection it may be mentioned that the Hon'ble Supreme Court in the case of CCE, Shillong vs. Wood Craft Product Ltd. Reported in 1995 (77) ELT 23 (SC) in para 18 has held that the structure of Central Excise Tariff is based on the internationally accepted nomenclature found in the HSN and therefore any dispute relating to tariff classification must, as far as possible be resolved with reference to the nomenclature indicated by the HSN unless there be an express different intention indicated in the Central Excise Tariff Act, 1985 itself. Further it may be mentioned that the Hon'ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Anticaries prophylactic treatment. The Note also enumerates that 'toothpaste' and 'other preparations for teeth' remains classified under Heading 3306 whether or not they contain abrasives and whether or not they are used by dentist. The correct scope of the heading as per the submission of the appellants is that when one refers to HSN item 3306 and the bifurcations as also under CETA 1985 there is a variance seen. In other words, this bifurcation under Heading 3306 for HSN and is not pari materia and under CETA 1985 and therefore the sub heading structure of HSN would not apply to CETA. The CETA proves preparation for oral or dental hygiene including Dentifrices and Denture Fixative paste and powders under Heading 3306 and at the four digit level it is para material HSN. The scope of sub heading 3306.10 of CETA 1985 restricts it to only 'tooth powder and paste' and any entity which is not a 'toothpowder or toothpaste' would be covered under heading 3306.90. This submission has to be upheld. We find ourselves in agreement with the aforesaid approach of the Tribunal having regard to the cogent reasons given by it. 12) This Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a toothpaste and dental cleaner are different and varying. The dental cleaner, in addition, has two more ingredients, namely, Silicon Agglomerate and Bluer Agglomerates, which play an active role as abrasive. (b) Even the manufacturing process of Close-Up toothpaste and Close-up Whitening is different. While the total stages for manufacturing toothpaste were nine, the number of stages for manufacture of Close-Up Whitening were eleven. It takes 120 minutes to manufacture a toothpaste tube, while it takes 155 minutes to effect the manufacture of Close-Up Whitening. (c) Statement of one Mr. N.H. Bijlani, the only expert in this case and whose statement was recorded on January 09, 2002, was referred to by the Tribunal. In this statement, Mr. Bijlani has explained the difference between toothpaste and dental cleaners and has opined that Close-Up Whitening dental cleaner cannot be equated with toothpaste. (d) The Tribunal has also found that as per records, classification of the same product in an earlier avtar/brand was acceptable to the Department as the same was classified under a different name for all these years when the rate of duty under Heading 3306.90 were higher th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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