Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Johnson And Johnson Ltd. on 26 July, 2005
Equivalent citations: 2006(193)ELT368(TRI-MUMBAI)
ORDER T. Anjaneyulu, Member (J)
1. The Revenue is in appeal aggrieved by an Order dated 25-10-2000 passed by the Commissioner of Central Excise (Appeals), Mumbai-II, wherein he set aside the Order-in-Original made by the Deputy Commissioner of Central Excise, Mulund Division, Mumbai.
2. The issue involved in the present appeal is classification of the product, Johnson Buds, manufactured by M/s. Johnson & Johnson Ltd. The Department claims the classification of the product under Chapter Sub-Heading 3926.90 of the Central Excise Tariff Act, though right from 1986 to 1999, it was classified under 5601.10 of the tariff. According to the Adjudicating Authority, the weight of P.P. Sticks (article of plastics) is predominant as compared to the Buds, which are made of wadding of cotton.
3. As per the Order-in-original, the essential character of the Johnson Bud is not determined by the cotton wadding alone, rather both wadding and the P.P. Sticks determine its essential character in equal measure. There being no other heading in the Tariff, which covers the goods specifically either by description or application of the use, the classification has to be determined on the basis of the material that predominates by weight, which, in the instant case, being polypropylene, the Johnson Buds, falls under Central Excise Tariff Heading 3926.20.
4. The submission of the assessee is that the product is meant for cleaning the outer portion of the ear. However, product is also used for cleaning of the inside of the ear. In view of this, the cotton, which is used for swabs, is an IP Grade Cotton satisfying the Indian Pharmacopoeia Standards. During the period 1986 to 1999, the classification under Sub-Heading 5601.10 of the Tariff was not disputed by the Department and the classification lists were duly approved. There is absolutely no basis in the Department's contention that the weight of the PP Sticks, being predominant in the product, the same is classifiable under 3926.90. Taking into consideration the end use of the product, the product in question is not an article of plastic in the light of Supreme Court judgment in the case of Geep Flashlight Industries v. Union of India reported in 1985 (22) E.L.T. 3 (S.C.). The classification is to be determined having regard to the understanding in respect of the product in the trade.
5. After considering the above submissions made by the assessee, the Commissioner (Appeals) made the following observation in his impugned order at Pages 2 and 3.
...Therefore, merely because PP stick is predominant by weight in the product, the product cannot be classified on this basis. The classification as ordered by the Adjudicating Authority "as an article of plastic" is therefore, contrary to the law declared by the Supreme Court as to what can be regarded as an article of plastic. Since the essential character viz. use of the product is dependent on the cotton swabs the appropriate classification of the product is under Sub-Heading 5601.10. Even in terms of the provisions of Rule 3(c) of the General Rules of Interpretation to the Tariff since Chapter Sub-Heading 5601.10 occurs later than Chapter Sub-Heading 3926.90, the appropriate classification of the product in terms of this provision would be under Sub-Heading 5601.10. In the case of CCE v. Moti Surgi Chem Pvt. Ltd. as , arguing the case for revenue the departmental representative's submissions are reproduced below:
The product is a kin to Johnson's Buds. He submits that the product is not in the form of carded cotton as silver and since it is not in the form of silver it will be classifiable under Chapter Sub-Heading 5601.00. He submits that Chapter Sub-Heading 9603.00 covers items like brooms, brushes etc. that cotton swabs cannot be called brooms or brushes. He submitted that they are similar to M/s. Johnson & Johnson ear buds and therefore, are classifiable under Chapter Sub-Heading 5601.00. In support of his contention he cited and relied upon the decision of this Tribunal in the case of Johnson & Johnson.
In terms of Rule 3(b) of the Rules for interpretation of the Schedule to the said Tariff AO, since the said product consists of Buds, which are made of articles of wadding of textile materials, which gives the said product its essential character and the PP Stick the other component of the said product is only a carrier and of no functional use for the purpose for which the said product is intended to, the product is classifiable under Chapter Heading No. 5601.00.
6. Basing on the aforesaid discussion, the Id. Commissioner of Customs & Central Excise (Appeals) set aside the Order-in-Original and allowed the appeal filed by the assessee. Aggrieved by the same, the Revenue filed the present appeal.
7. The main contention of the Department is that Johnson Bud is a composite item, comprising polypropylene stick with bud of cotton wadding fixed at both its end. To use it, it is inserted into the ear cavity. The selection of cotton wadding at the end of the article is with reference to the delicate nature of the organs inside the ear cavity as well as the functional need of sticking the ear wax to it for its removal. Similarly, the selection of polypropylene as the material of the stick is in view of the flexibility it affords so that the delicate inner organs of the ear are not damaged during the process of removal of the ear wax. From the above, it appears that both the wadding and the PP Stick determine its essential character in equal measure. Hence the said product merits classification under Chapter Sub-Heading No. 3926.90 attracting Central Excise duty @ 25% ad valorem. Therefore, the Commissioner (Appeals) erred in allowing the appeal filed by the assessee and changing the classification of the product.
8. We have heard both sides at length and also perused the record. We do not find any merits in the appeal filed by the Revenue in the light of the observations made by the Supreme Court in the case of M/s. Geep Flashlight Industries as to what amounts to articles of plastics. It is made clear that the commodity known, advertised, sold and offered in the market as ear bud and the same is not classifiable as an article of plastic, which the Department desires to classify under 3926.90 of the Central Excise Tariff Act. Hence appeal is dismissed.