Customs, Excise and Gold Tribunal - Ahmedabad
Cello House Hold Appliances Ltd., Shri ... vs Commissioner Of Central Excise on 6 December, 2006
ORDER Archana Wadhwa, Member (J)
1. The dispute in the present appeal is as regards the correct classification of the product being manufactured by the appellant. Admittedly the appellants are in the business of manufacturing various kinds of plastic articles. The dispute in the present appeal relates to the plastic shelf manufactured by the appellant. Four types of shelves are manufactured i.e. Japan Shelf, Singapore Shelf, Tokyo Shelf and Hong Kong Shelf. The only difference between various types of shelves is number of levels. Whereas Japan Shelf and Tokyo Shelf had three levels Hong Kong Shelf and Singapore Shelf had two levels respectively.
2. The appellant had filed declaration as also classification list classifying the above product under Heading 3924.90, as articles of plastics. On the other hand revenue's contention is that the said products are appropriately classifiable as "Other shelved furniture" falling under Tariff Heading 9403.00. As the said heading attracted higher rate of duty appellants were issued that a Show Cause Notice dated 24.03.2000 proposing confirmation of demand of duty in respect of the goods cleared during the period 1997-98, upto January 2000.
3. The Commissioner vide his impugned order has held that the said goods were properly classifiable under Heading 9403.00 as "Other shelved furniture" and accordingly confirmed the demand of duty of Rs. 28,65,548/- alongwith imposition of personal penalty of identical amount imposed under Section 11AC of the Central Excise Act. In addition, he confirmed the interest in terms of Section 11AB, confiscated land, building, plant and machinery with a option to the appellant to redeem the same on payment of redemption fine of Rs. 5 Lakhs. Personal penalty of Rs. 5 Lakhs and Rs. 1 Lakh was imposed upon the Director and authorized signatory of the company respectively under Rule 209A of Central Excise Rules, 1944.
4. We have heard Shri Vinay Sejpal, learned advocate appearing for the appellant and Shri K.J. Sanchis, learned J.D.R. appearing for the revenue.
5. The Commissioner, for classifying the goods under Chapter 94 had relied upon Chapter Note 2 to Chapter 94. For better appreciation, we reproduce the same:-
the articles (other than parts) referred to in headings Nos. 94.01 to 94.03 are to be classified in those heading-only if they are designed for placing on the floor on the ground. The following are, however, to be classified in the above-mentioned headings even if they are designed to be hung; to be fixed to be wall or to stand one on the other:
Cupboards, bookcases, other shelved furniture and unit furniture;
Seats and beds.
The Commissioner has further observed that inasmuch as the appellant's product is primarily used as a mini cupboard or cabinet. The same satisfied the criteria for being classified under Chapter Heading No. 9403.00 as "Other Shelved Furniture". He has also referred to the dictionary meaning of the 'furniture' which means - 'movable equipment of house/room etc.' Accordingly he has observed that since the product is a movable equipment of house/room, and as shelves, the same is properly classifiable as "other shelved furniture."
6. On the other hand appellant had strongly contended that the plastic shelves are not meant for placing on the floor and the same are used for keeping on the table or on the shelves in the bathroom and kitchen. The same is not neither designed to be hung, or to be fixed to the wall or to stand on the other. As such, they have justified classification under Chapter 39.
7. We have seen the technical literature and the photograph of the product produced before us, the same are commonly used items made of plastic. It is also on record in the shape of affidavit of the dealers showing that these shelves are used in the bathroom for keeping small items like Tooth paste, Brushes, Creams and Soaps etc. This fact has also been taken note of by the Commissioner. Statements of Shri Anil Das, authorized signatory and Shri Pannalal Sharma, one of the Director of the assessee disclosed that the product in question are meant for keeping toilet articles, medicaments shaving cream, cosmetics, cassettes, calculators etc. Similarly one of the dealers of the goods Shri Kundan Kothari, in his affidavit dated 04.11.2000 has deposed that the goods are used for keeping miscellaneous items like stationery items, tooth paste, tooth brush, sewing kits, pens, pencils. Similarly Shri Mukesh Bhatt, a consumer has stated in his affidavit that he has using the cello Singapore Shelf by placing the same on top of his table for keeping stationery items like pens, U-Pins and stapler etc. As such, it is seen that the use of the product is not being doubted by the Revenue. It is well settled law that popular trade and commercial parlance has to be given preference over dictionary and technical meaning [reference Supreme Court decision as reported in 2003 (152) E.L.T. 22 (S.C.)] Definitely the product is conceived in the mind of people who deals with the same as article of plastic and not as furniture.
8. HSN Explanatory Note to Chapter 94 is a good guide to be looked into for the purposes of classification. As per Note 4(B) to the said Chapter is reproduced below, for better appreciation:-
(B) The following:
(i) Cupboards, bookcases, other shelved furniture and unit furniture, designed to be hung, to be fixed to the wall or to stand one on the other or side by side, for holding various objects or articles (books, crockery, kitchen utensils, glassware, linen, medicaments, toilet articles, radio or television receivers, ornaments, etc.) and separately presented elements of unit furniture.
(ii) Seats or beds designed to be hung or to be fixed to the wall.
Except for the goods referred to in subparagraph (B) above, the term "furniture" does not apply to articles used as furniture but designed for placing on other furniture or shelves or for hanging on walls or from the ceiling.
It therefore follows that this Chapter does not cover other wall fixtures such as coat, hat and similar racks, key racks, clothes-brush hangers and newspaper racks, nor furnishings such as radiator screens. Similarly, the Chapter excludes the following types of goods not designed for placing on the floor: small articles of cabinet-work and small furnishing goods of wood (heading 44.20) and office equipment (e.g. sorting boxes, paper trays) of plastics or of base metal (heading 39.26 or 8304).
As it clear from the above, Chapter 94 does not cover articles designed for placing on other furniture or shelf or for hanging on the wall or from the ceiling in asmuchas. As has already come on record that the plastic shelf manufactured by the appellants are being used by the consumer by placing the same on table tops or kitchen shelves or bathroom shelves, the same would get excluded for the purview of Chapter 1994.
9. On the other hand we find that Chapter Heading 39.24, which is to the following effect - Tableware, kitchenware, other household articles and toilet articles, of plastics, Insulated ware, Other deals with the other household articles of plastic. Shelves in question are used either in the bathroom or on the table top or in the kitchen, being movable house articles. The same would in our view get properly classified under Heading 3924.90.
10. In view of our foregoing discussion, we hold that the shelves manufactured by the appellant are properly classifiable under Heading 3924.90, as claimed by the appellant.
11. Apart from the merit of the case being in favour of the appellant, we also find that the demand in question is barred by limitation. It is not disputed that the appellants were filing declaration with the department giving description of the goods and claiming classification. The only objection by the adjudicating authority is that they should have submitted alongwith the declaration, the printed literature/catalogue of the product instead of giving and putting the names i.e. Japan Shelf, Singapore Shelf, Hong Kong Shelf and Tokyo Shelf. According to the adjudicating authority this does not given any details of use or shape. Accordingly, he has held that the material facts were suppressed and longer period of limitation is correctly invoked.
12. The above reasoning adopted by the Commissioner fallacious on the face of it. Having filed the declaration under Rule 173B and having given the requisite information as required in the declaration, appellant cannot be attributed with any suppression on the ground that printed literature/catalogue of the product was not furnished. There is no requirement under the said rule or column in the format of the declaration requiring an assessee to submit the technical literature. If the revenue was of the view that the information given by the appellants is not sufficient, they were within the jurisdiction to ask for the literature or other relevant information. As such, we are of the view that the demand is also hit by bar of limitation.
13. As we have already held in favour of the appellant on merits as well as on limitation, imposition of penalties upon all the appellants is not justified. The same are accordingly set aside. In a nut shell all the appeals are allowed with consequential relief to the appellants.
(Pronounced in Court on 6/12/06)