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TMI Blog2015 (12) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... n brief, as under: 1.1 M/s. Neha Herbals Pvt. Ltd., located at 76, SSI Co-opeartive Industrial Estate, G.T. Karnal Road, Delhi-110033, is a private limited company whose director is Sh. Vikas Gupta. This private limited company had started with effect from 1/5/2012 and prior to the 1/5/2012, the same unit was being run as a proprietary concern, namely, M/s. Neha Enterprises owned by Sh. Vikas Gupta. The appellant firm in their factory at the above mentioned location received Henna powder in bulk, out of which two products are manufactured. The first product is Henna powder retail packs of 6 gram, 15 gram, 25 gram, 50 gram, 250 gram, 500 gram, 1kg, etc.. The second product is henna cones which is made by adding water and preservatives like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Neha Herbals Pvt. Ltd. under proviso to section 11A(1) of Central Excise Act, 1944 along with interest thereon under section 11AB and besides this, while penalty of equal amount under section 11AC was imposed on the Appellant Company, another penalty of Rs. 5 crore on Sh. Vikas Gupta, Director of the appellant company was imposed under Rule 26 of the Central Excise Rules, 2002. Since, the appellant had deposited an amount of Rs. 20 lakh during the investigation, the Commissioner by the impugned order appropriated this amount towards the duty demand. 1.2 Against the above order of the Commissioner, these appeals have been filed along with stay application. 2. Heard both sides in respect of stay application. 3. Sh. Hari Shankar, advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to heading 1404 by section 67(d) of Finance Act, 2006 with effect from 1/1/2007 by deleting the sub-headings 14041011 to 14041090, the heading henna still remained in heading 1404 just below the sub-heading 140410 pertaining to raw vegetable materials of a kind used primarily in tanning ; that henna in the heading 1404 is found even after 1/1/07 in the Central Excise Tariff published by the Directorate of Publications of the Central Board of Excise and Customs; that the appellant because of the word henna appearing in heading 1404 were under bonafide impression that the henna powder and henna cones are covered by sub-heading 1404 for which rate of duty is nil and for this reason, they were neither paying any excise duty nor filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof may be stayed. 4. Sh. R.K. Grover. the ld. DR opposed the stay application by reiterating the findings of the Commissioner and pleaded that the non-payment of duty by the appellant was intentional, as the appellant during the period of dispute were receiving Neha Brand herbals hair dye, mehndi oil, etc., manufactured by M/s. Vedika Herbals Uttrakhand, a Unit working under the area based exemption and in the invoices issued by M/s. Vedika Herbals, the Neha brand herbal hair dye, mehendi oil, etc were being classified under chapter 33. He also emphasized that while in the departmental publications even after 1/1/2007 the word henna continued to appear in the heading 1404, this was due to typographical error, the Central Excise T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1061 Amla (embelica linn) Kg. Nil 14041069 Other Kg. Nil 14041070 Wattle bark (mimosa bark) Kg. Nil 14041090 Other tanning substances Kg. Nil 14042000 Cotton Linters Kg. Nil 140490 Other: 14049010 Bidi wrapper leaves (tendu) Soap-nuts Kg. Nil 14049021 Powder Kg. Nil 14049029 Other Kg. Nil 14049030 Hard seeds, pips, hulls and nuts, of a kind used primarily for carving Kg. Nil 14049040 Betel leaves Kg. Nil 14049050 Indian Katha Kg. Nil 14049060 Coconut shell, unworked Kg. Nil 14049070 Rudraksha seeds Kg. Nil 14049070 other Kg. Nil 7. By section 67 (d) of Finance Act, 2006 heading 140410 alongwith its sub-heading 14041011 to 14041090 were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be blamed for entertaining belief that even after 1/1/07 henna powder was specifically covered under heading 1404 and would attract nil rate of duty. 8. The product being received by the appellant unit form their sister concern in Uttrakhand were Neha brand herbal dye, mehendi, oil, etc, which are different products and not the powder of henna leaves. 9. In view of these circumstances, we hold that irrespective of the merits of the departments case for classification of the goods, in question, under heading 3304, the longer limitation period of five years under proviso to section 11A(1) is not invokable and bulk of the duty demand would therefore to be time barred. Therefore, we are of the view that an amount of Rs. 20 lakh paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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