Custom, Excise & Service Tax Tribunal
2) Cuddalore Kalamandir Women Worker'S vs ) Cuddalore Kalamandir Women Worker'S on 11 November, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH
CHENNAI
Appeal Nos.E/714/2003 (By Dept.)
E/751/2003 (By Assessee)
[Arising out of Order-in-Appeal No.259/03 (Pondicherry) dt. 24.6.2003 passed by the Commissioner of Central Excise (Appeals), Chennai]
For approval and signature :
Honble Shri P.K. Das, Judicial Member
Honble Shri R. Periasami, Technical Member
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not ? :
3. Whether the Members wish to see the fair copy of
the order? :
4. Whether Order is to be circulated to the Departmental authorities ? :
1) Commissioner of Central Excise, Pondicherry
2) Cuddalore Kalamandir Women Worker's
Multi Purpose Co-op. Cottage
Industrial Soc. Ltd. Appellant
Versus
1) Cuddalore Kalamandir Women Worker's
Multi Purpose Co-op. Cottage
Industrial Soc. Ltd.
2) Commissioner of Central Excise,
Pondicherry Respondent
Appearance:
None For the Assessee Shri K.P.Muralidharan AC (AR) For the Revenue CORAM :
Honble Shri P.K. Das, Judicial Member Honble Shri R. Periasami, Technical Member Date of Hearing : 11-11-2014 Date of Decision : 11-11-2014 FINAL ORDER No.40826-40827/2014 Per P.K. Das
1. Both the appeals are arising out of a common order and therefore both are taken up together for disposal.
2. The relevant of the case, in brief, are that the assessees are engaged in the manufacture of Herbal Shikakai Powder under the name of "Ragaa" and classified under sub-heading 3003.39 as "other medicaments". According to the Revenue, the product namely Herbal Shikakai Powder is a preparation for use on the hair and would be classifiable under Chapter Heading 3305.99 as per Note 2 to Chapter 33 read with Chapter Note 1 (d) to Chapter 30 of the Schedule to the Central Excise Tariff Act, 1985 attracting 30% adv. The Superintendent of Central Excise issued periodical show cause notices during the year 1997. The adjudicating authority ordered that the product "Shikakai Powder packed in unit containers and sold under brand name is classifiable under chapter sub heading 3305.99 of the Schedule to the CETA'85 and also confirmed the demand of duty of Rs.23,86,083/- under Rule 9 (2) of the erstwhile Central Excise Rules, 1944 read with Section 11A (1) of the Central Excise Act, 1944. By the impugned order, the Commissioner (Appeals) modified the adjudication order in so far as the classification of the product was upheld but the demand of duty was partly dropped on the ground of limitation. The assessee filed appeal against the classification of the goods and demand of duty. Similarly, Revenue filed appeal against setting aside a portion of the demand on limitation.
3. None appeared on behalf of the assessee. There is no adjournment application in the file. As the appeal is an old one, we take up the appeals for hearing.
4. After hearing the Ld. AR for Revenue and on perusal of records, we find that the issue relates to classification of Herbal Shikakai Powder is no longer res integra in view of the decision of the Tribunal in the case of Commissioner of Central Excise, Trichirapalli Vs Medi Herbs - 2006 (202) ELT 600 (Tri.-Chennai). It has been held that Herbal Shikakai Powder is classifiable as cosmetic under sub-heading 3305.99 of the CETA'85 during the period September 1996 to December 1997 and September 1996 to March 1997. The Hon'ble Karnataka High Court in the case of Shri Ramakrishna Soapnut Works Vs Superintendent 2004 (164) ELT 238 (Kar.) held that Shikakai Powder (used as a shampoo for cleaning hair) would fall under Heading 33.05 of the CETA under the residuary item 'others'. Hence we do not find any merit in the appeal of the assessee.
5. Regarding the Revenue's appeal, we find that the Commissioner (Appeals) had given a detailed finding on this issue as under :-
"The appellants have also contended that as the demand was based on the Board's Circular No.333/49/9 CX dated 10.09.97, the demand cannot be made retrospectively but only prospectively as held by Hon'ble Apex Court in H.M. BAGS MANUFACTURER Vs CCE 1997 (94) ELT 3 (SC) and also pointed out that in similar situation in the case of classification of Meera Herbal Shikakai Powder the then Commissioner Appeals vide his Order in Appeal No.15 to 17 / 99 (Try) dated 06.01.99 had restricted the demand with effect from 10.9.97. i find that this contention of the appellant has merit. By respectfully following the decision of the Hon'ble Apex Court, I hold that in this case, the demand made in the impugned order for the period prior to 10.9.97 fails.
With regard to their contention on limitation, I find that in this case Show Cause Notice OC No.1788/97 dt. 22.10.97 was issued to demand a sum of Rs.10,,53,442/- for the period from 5/97 to 9/97 and subsequently the demand was enhanced to Rs.16,58,356/- by Corrigendum No. 1652/98 dt. 3.8.98. The corrigendum was issued after the expiry of 6 months. Show cause notice OC No.33/98 dt. 19.2.98 was issued to demand a sum of Rs.1,73,183/- for the period from 10/97 to 12/97 and subsequently the demand was enhanced to Rs.5,15,261/- by Corrigendum No.1650/98 dt. 1.8.98. The corrigendum was issued after the expiry of 6 months. The Hon'ble Tribunal in case of Wipro Information Technology Vs CCE 1999 (107) ELT 467 (T) has held that addendum making material changes in the original show cause notice and increasing the demand amount is barred by limitation. In SANGEET SYNTEX LTD. VS CCE 2002 (149) ELT 1185 (T) it was held that Corrigendum to a show cause notice not merely correcting or removing a clerical error but changing entire basis for commissioning, condoning and its character would, prima facie, be a nullity in law. By following the said decisions of the Tribunal I hold that demand increased by way of corrigendum in this case is hit by limitation and hence not sustainable."
6. The Tribunal in the case of CCE Tiruchirapalli Vs Medi Herbs (supra) on the same product in the context of Board's Circular No.333/49/97-CX dt. 10.9.97 held that assessee was bound to pay duty on the goods in question for six months prior to 10.9.1997 by following the judgement of the Hon'ble Supreme Court in the case of ITW Signode India Ltd. Vs Collector 2003 (158) ELT 403 (SC). Hence, the demand of duty for the period prior to 10.9.97 is sustainable and the findings of the Commissioner (Appeals) to that extent is liable to be set aside. However, we agree with the finding of the Commissioner (Appeals) that demand increased by way of corrigendum to SCN is hit by limitation.
7. In view of the above discussion, we dismiss the appeal filed by the assessee. The appeal filed by the Revenue is partly allowed in so far as the assessee is liable to pay demand of duty for six months prior to 10.9.1997. The Revenue's appeal is partly allowed to the extent ordered as above.
(Operative part of the order
pronounced in open court on 11.11.2014)
(R. PERIASAMI) (P.K. DAS)
TECHNICAL MEMBER JUDICIAL MEMBER
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