Customs, Excise and Gold Tribunal - Delhi
Dabur India Ltd. vs Cce on 10 October, 2003
Equivalent citations: 2004(91)ECC84, 2004(164)ELT168(TRI-DEL)
JUDGMENT V.K. Agrawal, Member (T)
1. M/s. Dabur India Ltd. have filed these three appeals against the classification of 'Gulabari' under Heading 33.03 of the Schedule to the Central Excise Tariff Act and confirmation of demand of Central Excise duty against them.
2. Shri B.L. Narsimhan, learned Advocate, ubmitted that the appellants manufacture 'gulabjal' under the patent name 'gulabari' which is classified by them as a patent ayurvedic medicament under heading 3003.30 of the Schedule to the Central Excise Act; that a show cause notice dated 19.9.97 was issued to classify the product under sub-heading 3303.00 on the ground that the product is 'toilet water'; the Assistant Commissioner, under Order-in-riginal No. 100/97 dated 11.12,97, classified the impugned product under Heading 33.03 and confirmed the demand of Rs. 1,14,78,517.00, which was deposited by them under protest; that their appeal was rejected on merit by the Commissioner (Appeals), but remanded for uantification of the demand from the period 1.7.97 by Order-in-Appeal dated 25.5.99; that the Tribunal, however, vide Final Order No. 47/2000-C dated 14.1.2000, held that the department has not substantiated their claim that the impugned product is 'toilet water' classifiable under heading No. 33.03 by adducing any evidence and, ccordingly, the demand of Central Excise duty was set aside; that the Tribunal, after holding that the product is not classifiable under heading No. 33.03, observed as under:
"However, we would like to mention that it does not mean that we are confirming the classification of the impugned product under Sub-Heading No. 3003.30 of the Tariff as ayurvedic medicine. It is open to the department to arrive at correct classification of the impugned goods in appropriate proceedings".
3. Learned Advocate, further, submitted that on receipt of the said Tribunal's Final Order, they filed a refund claim; that, however, the department mis-construed that the Tribunal has given it another opportunity of redetermining the classification in the very same proceedings and accordingly the fresh proceedings were started to classify the product; that the department drew the samples, which were sent to the Chemical Examiner, who desired that the appellants should be asked to submit the manufacturing process for the product and the reference standard of 'oil of rose' in order to find out exact constituent present therein alongwith fresh samples; that the information required was provided by them under their letter dated 15.6.2001; that the Deputy Commissioner redetermined the classification of the impugned product under Heading 33.03 under Order-in-original No. 83/2001 dated 27.12.2001, which has also been confirmed by the Commissioner (Appeals) under the impugned Order-in-Appeal Nos. 148-49/2003 dated 31.3.2003. He also mentioned that since the period October 1997 to 18.12.97 was not covered by the order passed by adjudicating authority, the Assistant Commissioner passed a Memorandum Order No. 54/98 dated 2.4.98 confirming the demand of duty for the said period. The said order was reviewed by the Commissioner (Appeals) under Section 35E of the Central Excise Act on the ground that the assessable value was arrived at wrongly; that the said appeal, tiled by the revenue, has been decided by the Commissioner (Appeals) under the impugned Order-in-Appeal No. 167/03 dated 17.4.2003 holding that the correct amount of duty would be Rs. 14,68,330.38.
4. Learned Advocate contended that the impugned orders are liable to be set aside as the Tribunal has categorically held that the impugned product 'gulabari' is not classifiable under Heading 33.03 as 'toilet water' and the demand has been set aside; that no inference to the effect that 'gulabari' is classifiable as ayurvedic medicine can be drawn from the said final order of the Tribunal; that the appellants had not contested the same; that the only issue raised before the Tribunal was whether the impugned product is classifiable as 'toilet water' and whether the demand is sustainable to which the Tribunal has held in negative; that the Tribunal has categorically held that the issue of classification under current proceedings has come to an end and the demand has been set aside and the correct classification may be determined by the department in appropriate proceedings; that effect of this is that the current proceedings are not appropriate to decide the correct classification of 'gulabari'; that the department can re-determine the classification of the impugned product under fresh proceedings and not in the same proceedings, which have attained finality by the order passed by the Tribunal; that the department has also not filed any appeal before the Hon'ble Supreme Court challenging the decision of the Tribunal; that the classification under Heading 33.03 is incorrect; that it has not been given the liberty to decide the classification once again under Heading 33.03. He relied upon the decision in the case of TELCO v. CCE, Patna, 2001 (132) ELT 112 (T), wherein it has been held by the Tribunal that "once the Collector (Appeals) has found show cause notice and letter of demand without jurisdiction and set aside the both, nothing survives for the Collector to adjudicate the matter on the basis of such show cause notice and letter of demand. As rightly emphasised by the Ld. Consultant, no appeal had been filed by the department against both the Orders-in-Appeal, the same has become final and it cannot be argued by the Department that in respect of letter dated 29.3.89, no show cause notice was required to be issued as the demand was issued in pursuance of adjudication order passed by the Collector denying the benefit of Notification No. 217/86".
5. Countering the arguments, Shri Virag Gupta, learned DR, submitted that the three points emerged from the Final Order No. 47/2000-C passed by the Tribunal:
(i) the burden cast upon the revenue to prove that the product is to be classified as 'toilet water' has not been discharged;
(ii) The demand of Central Excise duty is set aside;
(iii) It is open to the department to arrive at correct classification of the impugned product in appropriate proceedings.
The learned DR contended that the appellants have filed refund claims, which are appropriate proceedings for considering the classification of the impugned product; that, accordingly, the department started the process of re-determination of the classification of 'gulabari' and both the adjudicating authority and the Commissioner (Appeals), after considering the tariff heading and the Notes of Chapters 30 and 33, have come to the conclusion that the product is classifiable under Heading 33.03. He emphasised that the proceedings for reclassification of the product as has been made by the Revenue are the appropriate proceedings as mentioned in the final order passed by the Tribunal.
6. We have considered the submissions of both the sides.
7. It has not been disputed by the revenue that the determination of classification of the impugned product 'gulabari' and the confirmation of the demand has been made for the period which was in dispute before the Tribunal in the first round of proceedings which stands finally decided by the Tribunal vide Final Order No. 47/2000-C dated 14.1.2000; that the said final order reveals that the issue involved therein was whether 'gulabjal' manufactured by them and marketed under patent name 'gulabari' is classifiable under Heading 33.03 of the Tariff. After hearing the arguments from both the sides, the tribunal decided the matter finally as under:
"We have considered the submissions of both the sides. The entire case of the appellants to the effect that their product in question is not classifiable under Heading 33.03 of C.E.T.A. is based on the argument that their product does not contain any alcohol whereas as per H.S.N. Explanatory Notes and Technical Books, toilet water does contain alcohol. We find that neither the Appellants nor the Revenue have brought on record any chemical test report indicating the contents of the impugned product. The department has not mentioned any reason in the show cause notice as to why the product is to be considered as a toilet water. The Department has not substantiated their claim that the impugned product is a toilet water classifiable under Heading No. 33.03 of C.E.T.A. by adducing any evidence. The burden cast upon the Revenue to prove that the product is to be classified as toilet water has not been discharged and as such the product in question is not classifiable under Heading No. 33.03 of the schedule to the Central Excise Tariff Act and accordingly the demand of Central Excise duty is set aside. However, we would like to mention that it does not mean that we are confirming the classification of the impugned product under Sub-Heading No. 3003.30 of the Tariff as Ayurvedic Medicine. It is open to the Department to arrive at correct classification of the impugned goods in appropriate proceedings."
8. As far as proceeding before the Tribunal was concerned, the matter has been finally decided by the Tribunal holding that the impugned product is not classifiable under Heading 33.03 of the Tariff as the Department had not discharged its burden to prove that the product, in question, is classifiable under Heading 33.03. The Tribunal, therefore, set aside the demand of the Central Excise duty. As the Tribunal in the said matter did not decide the heading under which the product, in question, would be classifiable and to avoid any future controversy, observed that while holding that the product is not classifiable under heading No. 33.03; it does not mean that the Tribunal is confirming the classification of the impugned product under sub-heading 3303.30 of the Tariff as ayurvedic medicine and it was open to the Department to arrive at correct classification of the impugned goods in appropriate proceedings. It does not mean that in the same proceedings, in which the tribunal has finally decided the product, not being classifiable under Heading 33.03 of the Tariff and the demand of duty being set aside, the Department is at liberty to re-open the same proceedings and re-determine the classification. Had it been the intention of the Tribunal, the matter would have been remanded to the competent adjudicating authority to decide the matter afresh. This was not done as no chemical test report indicating the contents of the impugned product was brought on record by the Revenue and the Department had not mentioned any reason in the show cause notice as to why the product is to be considered as a 'toilet water' classifiable under Heading 33.03 of the Tariff. As far as the said proceedings are concerned, they have attained finality in view of the fact that the said Order has not been challenged before Hon'ble Supreme Court The Department is, therefore, barred from re-determining the classification of the product in the same proceedings again. If the appellants continue to manufacture the impugned product and claim again the classification under any heading of the Tariff other than 33.03, it is open to the Department to adduce the evidence and re-determine the classification of the Product in accordance with law. But the Department cannot re-determine the classification in the same proceedings, which have attained the finality. We, therefore, set aside the impugned order and allow all the appeals.