Customs, Excise and Gold Tribunal - Delhi
Dabur India Ltd. vs Commissioner Of C. Ex. on 2 August, 2002
Equivalent citations: 2002(84)ECC33, 2002ECR371(TRI.-DELHI), 2003(153)ELT660(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. Appellants filed this appeal against the order-in-original passed by the Commissioner of Central Excise.
2. Brief facts of the case are that appellants are engaged in the manufacture of Dabur Lal Tail. The appellants claimed the classification of this product under Chapter Heading 30.03 of the Schedule to the Central Excise Tariff. A show cause notice dated 5-7-2000 was issued to the appellants on the ground that the Dabur Lal Tail was not a medicament classifiable under Heading 3003 of the Central Excise Tariff but was a cosmetic or toilet preparation classifiable under heading 33.04 of the Central Excise Tariff. In the show cause notice duty was demanded for the period June, 95 to July, 1998. The adjudicating authority confirmed the demand after reclassifying the goods and also imposed penalty.
2. Learned Counsel appearing on behalf of the appellants submitted that the whole demand is time barred. His submission is that show cause notice was issued on 5-7-2000 demanding duty for the period June, 95 to July, 98. The appellants have now stopped manufacture of Dabur Lal Tail at their facotry at Sahibabad. Therefore, they are not arguing on the classification but they are only contesting the impugned order on limitation. The learned Counsel submits that the appellants were filing the classification lists in respect of Dabur Lal Tail claiming the classification under Heading 30.03 of the Central Excise Tariff and the classification lists were duly approved even after conducting the verification. The learned Counsel submits that the classification list was filed in the year 1977 and the same was approved as claimed by the appellants. His contention is that even after 1986 when new Tariff come into force, the classification list was filed claiming the classification as Ayurvedic Medicines under Chapter 3003.30 of the Central Excise Tariff and the same was duly approved. Appellants also produced the classification list filed in the year 1994 which was also approved as claimed by the appellants. The appellants also submitted that a sample was taken in the year 1991 and was sent for chemical examination to find out whether the Dabur Lal Tail is classifiable under Heading 3003.30 of the Central Excise Tariff as Ayurvedic Medicines or Patent and Proprietory medicines classifiable under heading 3003.10 of the Central Excise Tariff. The appellants also submitted that in the year 1996, they also filed declaration under Rule 173B of the Central Excise Rules claiming the classification under Chapter 30 of the Central Excise Tariff. The contention of the appellants is that as the appellants regularly filing the classification list which was duly approved therefore, no suppression can be alleged against the appellants. Appellants relied upon the decision of the Tribunal in the case of Collector of Central Excise v. Muzzaffarnagar Steels, reported in 1989 (44) E.L.T. 552 (Tribunal).
3. The contention of the Revenue is that appellants misdeclared their product and suppressed the material information just to evade the payment of duty. The contention of the Revenue is that the appellants had not declared correctly the description/nominclature of the product in their classification lists, therefore, extended period of limitation is rightly envoked by the Commissioner of Central Excise.
4. Heard both sides.
5. The appellants are challenging the impugned order only on the ground of limitation. The demand is made for the period June, 95 to July, 98 and the show cause notice was issued on 5-2-2000. We find that right from 1977, the appellants were filing necessary classification lists claiming the classification of the goods in question under Chapter 30 of the Central Excise Tariff. The sample of the goods were taken by the Revenue for chemical examination in the year 1991 for determining the classification under Chapter Heading 3003.30 of the Central Excise Tariff or P & P medicaments falling under Heading 3003.10 of Central Excise Tariff. At this stage also, the Revenue had not attempted to classify the goods in question under Chapter 33 of the Central Excise Tariff as Cosmetic or Toilet preparations. The approval of classification lists is claimed by the appellant is not disputed by the Revenue.
6. The contention of the Revenue is that appellant had not declared the correct description of the product when the Revenue approved the classification lists. It is presumed that the approval was after making due enquiry by the proper officer. The Tribunal in the case of Collector of Central Excise v. Muzzaffarnagar Steels, reported in 1989 (44) E.L.T. 552 (Tri.) held as under :
"The Rule 173B providing for the filing of classification list clearly shows that what is required of the Assistant Collector is the approval "after such enquiry as he deems fit". The approval of classification list is an important part of the process of assessment and, therefore, the Assistant Collector is required to be very careful and is expected to apply his mind before according approval. He is entitled to and indeed required to make such inquiries and summoned such information as may be called for in order to arrive at the correct decision. In order words the act of approval was not merely as passive act or concurrence but involves an active decision making and the Assistant Collector was required to fully satisfy himself about the particulars of goods being manufactured and the process of manufacture wherever necessary and the relevant facts and than only determine the classification and pass appropriate orders; and once the Assistant Collector has approved the classification the department has to bear the consequences thereof."
In the present case when classification lists were approved by the Revenue, even after taking sample for chemical examination, now the Revenue cannot say that there is any suppression or mis-declaration with the intend to evade duty on the part of the appellant. If the Revenue was in any doubt about the description of the goods, the Revenue could have called for more information from the appellant. In view of the above discussion the demand is time barred, hence is not sustainable. Consequently, the impugned order is set aside and appeal is allowed.