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TMI Blog2018 (7) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... il Choudhary, Member (Judicial) and Mr. Anil G. Shakkarwar, Member (Technical) Shri Mohd. Altaf, Assistant Commissioner (AR), for Appellant Shri A. K. Dixit, Advocate, for Respondent ORDER Per: Anil G. Shakkarwar The present appeal is filed by Revenue is arising out of Order-in-Appeal No. 159-CE/APPL/KNP/2012 dated 27/04/2012 passed by Commissioner of Customs Central Excise (Appeals), Kanpur. 2. The brief facts of the case are that the respondents were engaged in the manufacture of Absorbent Cotton Wool, Carded Cotton/Non-absorbent Cotton, Handloom Gauze, Handloom Bandages and Bandages, etc. under the Product License No.1/97 dated 13/01/1997 issued by the Drug Controller, Lucknow. The respondent believed that the said goods were classifiable under Chapter 52 56 of Schedule to Central Excise Tariff Act, 1985 and did not attract any Central Excise duty. Therefore, they did not registered themselves with the Central Excise Department. It appeared to Revenue that the respondent should have registered with the Central Excise Department since it appeared to them that the goods manufactured by the respondents were classifiable under Chapter 3005 and were att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the MRP was declared on the package of 12 bottles, the bottles did not have any MRP instead it was written : (a) not for re-sale; (b) specially packed for Jet Airways. No retail price was written on 200ml. Bottle. There is further no dispute that the assessee has entered into a contract with Jet Airways dated 13-2-2002 and the contracted price of sale for the goods was ₹ 2.61. It was the condition in the contract that each bottle to be supplied shall have a printed label specially packed for Jet Airways . On the basis of these facts Shri Subba Rao urged that this case, if it was identical with Jayanti Foods case, then it was bound to be held that the MRP based assumption could not be the correct assessment and it should be under Section 4 of the Act. The contention is incorrect and as in fact the package cannot be viewed as a wholesale package . It does not come within the definition of Rule 2(x)(i) as the package was not intended for sale, distribution or delivery to an intermediary. On the other hand it is sold directly to Jet Airway and the Jet Airways supplied the said bottles to their passengers and thus there is no further sale by the Jet Airways of these bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uphold the ultimate verdict of the Tribunal that the valuation should be under Section 4A of the Act. We accordingly dismiss the appeals filed by the Department but without any order as to costs. From the above, it is clear that goods supplied by the party to hospitals, CGHS, defence institutions do not fall under the category of wholesale package. It is also worth mentioning that the Commissioner (Appeals) has not commented on the cited case law quoted in the captioned Order-in-Original dated 01.09.2011 and passed the order ignoring the cited case law of Hon ble Apex Court which is against the Judicial Discipline as ruled by Hon ble Supreme Court in the case of UOI vs. Kamlakshmi Finance Corporation Ltd. [1991 (55) E.L.T. 433]. 2. The Commissioner (Appeals) has observed as under: It is a well known fact that for dressing purposes material should at least be sterilised, if not coated or impregnated with pharmaceutical substances The Commissioner (Appeals) has again ignored the rulings given by Hon ble Supreme Court in the case of Chamanlal Jagjivandas Sheth vs. State of Maharashtra [1963] Supp 1 SCR 344, opined that even absorbent, cotton wool, roller bandages and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andards. This may not constitute a promissory estoppel, but it would certainly constitute evidence of the fact that in the pharmaceutical trade the product manufactured by the party was regarded as Absorbent Cotton Wool. There is, therefore, enough evidence to show that in the common parlance of the trade, namely the pharmaceutical trade in this case, the said product manufactured and cleared by the party was regarded as Absorbent Cotton Wool . It thus clear that the absorbent cotton wools, carded cotton etc. manufactured by the party will fall within the description of the goods mentioned under Chapter 30 and not under the chapter meant for Textile and Textile Articles as claimed by the party through their party in their defense reply. 4. Shri Shubhash Kheria in his statement recorded under Section 14 of the Central Excise Act, 1944 has stated that before introduction of eight digit tariff they were classifying their product under Chapter heading 3004 and after introduction of eight digit tariff they were classifying the same in Chapter 56. There was no change in manufacturing process prior and post introduction of eight digit tariff. The only basis that new Chapter 56 has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hy the common parlance test or the commercial usage test are the most common. Whether a particular article will fall within a particular Tariff heading or not has to be decided on the basis of the tangible material or evidence to determine how such an article is understood in common parlance or in commercial world or in trade circle or in its popular sense meaning. It is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the legislative intention, when the statute was enacted. One of the essential factors for determining whether a product falls within Chapter 30 or not is whether the product is understood as a pharmaceutical product in common parlance. Further, the quantity of medicament used in a particular product will also not be a relevant factor for, normally, the extent of use of medicinal ingredients is very low because a larger use may be harmful for the human body. However, there cannot be a static parameter for the correct classification of a commodity. The process of manufacture of a product and the end use to which it is put, cannot necessarily be determinative of the classification of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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