Customs, Excise and Gold Tribunal - Delhi
Pearls Of Beauty vs Cce on 16 February, 2000
Equivalent citations: 2001(95)ECR310(TRI.-DELHI)
ORDER Jyoti Balasundaram, Member (J)
1. Vide the impugned order the Commissioner of Central Excise classified Henna Powder in unit packings for use on Hair, manufactured by the Applicants herein, under C.E.T.A. sub-Heading 3305.90 for the years 1994-95 and 1995-96 and under Central Excise Tariff Act sub-Heading 3305.99 for the year 1996-97, confirmed the duty demand of Rs. 33,83,172/- on the above goods cleared during the period from 1.4.1994 to 22.7.1996 under the proviso to Section 11A of the Central Excise Act read with Rule 9(2) of the Central Excise Rules, and has imposed penalty equal to duty under Rule 173Q read with Section 11 AC.
2. Arguing on the stay application, Ld. Counsel Shri L.P. Asthana, contends that the entire demand is barred by limitation since the classification lists/declarations filed during the relevant period, describing the goods as Henna Powder classifiable under chapter Heading 3203.00 of the Central Excise Tariff Act 1985 were approved by extending the benefit of exemption under Notification No. 27/90-CX dt. 20.3.1990; and therefore the charge of suppression, misstatement is not sustainable so as to make available to the department, the extended period of limitation. He also pleads financial hardship on the ground that the current liabilities of Applicants company are in excess of its current assets, as seen from the relevant balance sheet. The Applicants also contends that proviso of Section 11 AC are not applicable herein, because the entire period of demand is prior to the introduction of this section in the Central Excise Act; and that imposition of consolidated penalty under Section 11 AC and Rule 173 of the Rule is not legally permissible. In these circumstances, the Applicants pray for waiver of pre-deposit and stay of recovery of duty and penalty pending disposal of the Appeal.
3. The prayer is opposed by the Ld. D.R. who drew our attention to para 28 of the impugned order wherein the Commissioner has dealt with plea of time bar and held that the assessees deliberately concealed the full description of the goods in the classification lists/declarations with intention and sole motive of evading duty. Regarding the plea of financial hardship, he has no comments to offer.
4. We have considered the rival submissions.
5. The Applicants manufacture Henna Powder and clear them in package of different sizes. 50 grams packing is removed for use for application on hand and feet, while in all other packing it is removed as product for application on the hair. In the packings removed as products for application on hair, the composition was mentioned indicating use of ingredients such as (1) Henna, (2) Amla, (3) Shikakai, and (4) Rose Herbal. During the period in dispute Henna Powder has been shown to fall for classification under C.E.T.A. sub-Heading 3203.00 under the various exemption Notifications issued from time to time. Heading 3203 covers colouring matters of vegetable and animal origin. On 30.10.1996, C.B.E.C, issued a circular clarifying that Henna powder in unit packing with instructions for use on the hair was classifiable under chapter 33 as preparation for use on the hair and not under chapter 32 in view of the dismissal by the Supreme Court of the Appeal of M/s. Henna Export Corporation against the Tribunal's decision in their own case holding that Henna unit packing for use on hair was classifiable under Chapter Heading 33.05. In these circumstances; it cannot be said that the non mention of the use of the Henna Powder manufactured and cleared by the Applicants (which forms subject matter of the present appeal) was with the intention to evade payment of duty and it cannot be said prima facie that the Applicants deliberately concealed the end use of the product. We are, therefore, of the view that the demand is prima facie barred by limitation and hence dispense with the requirement of pre-deposit of duty as well as penalty pending the appeal.