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TMI Blog2024 (6) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... the audit period March 2012 to December 2013. The dispute of classification was raised in audit vide Audit Report No. 327/2013-14 dated 10.11.2014 and on that basis further investigation was carried out by Preventive Wing and thereafter the show cause notice came to be issued on 08.08.2018. It is also observed that prior to the aforesaid audit, the appellant have been audited from time to time but no objection was raised on the classification of wet wipes. So, in view of the above facts, there is absolutely no suppression of facts or mis-statement with intent to evade payment of duty on the part of the appellant. Therefore, the demand for the extended period is not sustainable. It is found that appellant s case is on much better footing inasmuch as the appellant have time to time declared their changes and claim of exemption notification therefore, the above judgments are directly support the case of the appellant. It is also found that since the appellant have been audited from time to time and no objection was raised, it cannot be said that the appellant have suppressed any fact. The reliance is also placed on the Hon ble Supreme Court decision in the case of COMMISSIONER OF CENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the product while the liquid formulation is added for increased marketability. In common parlance, the products are known and used as wipes in the market. 2.3. For the period up to August 2009, the Appellants classified wet wipes under Chapter Sub-heading 3307.90 of the First Schedule to the Central Excise Tariff Act,1985 as other perfumery, cosmetic or toilet preparations, not elsewhere specified or included. The Appellants discharged Central Excise duty at the rate of 10% on the value determined under Section 4A of the Central Excise Act, 1944 i.e. MRP less abatement. The Central Excise duty was thus being discharged on a value calculated at 65% of the MRP of the goods after claiming abatement of 35% in view of Sr. No. 37 of NotificationNo.49/2008-CE(NT) dated 24.12.2008. 2.4. As a part of a periodic self-review of various tax positions, Appellant formed a bona fide view that the appropriate classification for wet wipes is under Tariff Item5603.9200 of the First Schedule to the Central Excise Tariff Act, 1985 as nonwovens, whether or not impregnated, coated, covered or laminated, of man-made filaments weighing more than 25 g/m2but not more than 70 g/m2. 2.5. The Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise duty by wrongly availing benefit of exemption on clearance of wet wipes. It was also alleged that prior to July 2013, the Appellants have short paid Central Excise duty on wet wipes by discharging duty on the value equal to 64.80% of the MRP of the wet wipes instead of discharging duty on the value equal to 65% of the MRP of wet wipes. 2.9. The Department vide letter dated 14.11.2014 asked the Appellants to provide their comments and reply in response to the said audit observation the audit report dated 10.11.2014. The Appellants responded vide letter dated 15.12.2014 and informed the Department that they have correctly classified the wet wipes and the classification of wet wipes under Chapter Heading 5603 has been implemented from August 2009 and not July 2013. The exemption, however, was being availed since July 2013. It was further informed that the classification of the goods and fact of availing exemption were duly intimated to the Central Excise department. 2.10 After a period of 9 months, the Ld. Additional Commissioner of Central Excise, Audit-II, Surat vide letter dated 08.09.2015 informed the Ld. Additional Commissioner of Central Excise, Bharuch regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 11AA of Central Excise Act, 1944 and imposed penalty under Section 11AC(1)(c) of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002 and penalty under Section 15B of Central Excise Act, 1944. The show cause notice also proposes to impose penalty upon FCL under Section 11AC(1)(c) of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002 and penalty under Section 15B of Central Excise Act, 1944. 3. The Adjudicating Authority after considering the appellant s submissions made in reply and also at the time of personal hearing on merit as well as on limitation, passed the order-in-original No. VAD-EXCUS-002-COM-025-18-19 dated 16.04.2019 whereby the demand of Central Excise duty of Rs. 5,38,76,124/- was confirmed along with interest and equal penalty under Section 11AC. Aggrieved by the order-in-original appellant filed the present appeal. 4. Shri V. Sridharan, learned Senior Counsel with Shri Ishan Bhatt, Advocate appearing on behalf of the appellant argued extensively the issue of classification and claimed that the correct classification of KARA brand wet wipes is under 5603 9200 as against the department s claim of classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nned below : - 6.3 From the above correspondence it is absolutely clear that the classification, claim of exemption notification in respect of their product wet wipes was categorically declared before the department. Therefore, there is no suppression of facts on the part of the appellant with intent to evade payment of duty. Moreover, all these facts were on record while conducting EA-3 audit by Central Excise department during March 2014 to October 2014 for the audit period March 2012 to December 2013. The dispute of classification was raised in audit vide Audit Report No. 327/2013-14 dated 10.11.2014 and on that basis further investigation was carried out by Preventive Wing and thereafter the show cause notice came to be issued on 08.08.2018. It is also observed that prior to the aforesaid audit, the appellant have been audited from time to time but no objection was raised on the classification of wet wipes. So, in view of the above facts, there is absolutely no suppression of facts or mis-statement with intent to evade payment of duty on the part of the appellant. Therefore, the demand for the extended period is not sustainable. In support of their defense on limitation, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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