Custom, Excise & Service Tax Tribunal
Netway Home Products India Pvt. Ltd vs Cce, Bangalore-Ii on 29 June, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21300, 21284, 21285/2014-DB [Arising out of Order-in-Appeal No. 24/2014-CE and No.25-26/2014-CE all dated 29/01/2014 passed by Commissioner of Central Excise, BANGALORE-II( Appeal) ] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI B.S.V.MURTHY, 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? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Netway Home Products India Pvt. Ltd. Plot No.2&3, Survey No.243/295, Village Kolgaon, Nr. Genesis, Palghar, Thane 401 404. Maharashtra Appellant(s) Versus CCE, Bangalore-II, Bangalore Respondent(s)
Appearance:
Shri Vinay S Sejpal, Advocate For the Appellant Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent Date of Hearing: 02/06/2015 Date of Decision: ..
CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. .. / 2015 Per : ARCHANA WADHWA Being aggrieved with the impugned orders of Commissioner(Appeals) vide which he has allowed the Revenues appeals and has reversed the orders of the original adjudicating authority, the appellant has filed the present appeals. All the appeals are being disposed of by a single order, as the issue in all of them is identical.
2. As per facts on record, the appellant is engaged in the manufacture of cleaning liquids like floor cleaners, utensil cleaners, glass cleaners etc. under the brand of ARO, CLEANMATE and MORE VALUE. The said products are being cleared by them on payment of duty on the assessable value adopted in terms of the provisions of Section 4 of Central Excise Act.
3. However, the Revenue felt that the appellants products attracted duty on MRP, in terms of Notification No.49/2008(NT) dt. 24/12/2008 issued in terms of Section 4A of Central Excise Act. Accordingly proceedings were initiated against them for confirmation of differential duty of duty.
4. During the course of adjudication, appellant took a stand before the adjudicating authority that in terms of Sl.No.40 of Notification No.49/2008-(NT), the goods which are in the form of bars, cakes, moulding pieces or shapes are only covered by the provisions of Section 4A and inasmuch as the products being manufactured by them were in liquid form, they would not be required to pay duty in terms of Section 4A of Central Excise Act. The said plea of the appellant stand accepted by the original adjudicating authority, who observed that inasmuch as the appellants goods which fall under Tariff heading 3402, are in liquid form, and inasmuch as Sl.No.40 of the Notification in question refers to the goods cleared in the form of bars, cakes, moulding pieces or shapes, the said notification would not get attracted. Accordingly, he dropped the proceedings against the appellant.
5. Being aggrieved with the said order of Asst. Commissioner, Revenue filed appeals before the Commissioner(Appeals). The appellate authority vide his impugned orders set aside the orders of the Asst. Commissioner and allowed the Revenues appeals. Hence these appeals.
6. After hearing both the sides duly represented by Shri Vinay S Sejpal, Advocate for the assessee and Shri R. Gurunathan, Addl. Commissioner(AR) for the Revenue, we find that the appellant is engaged in the manufacture of various types of liquid cleaners put up in retail packs. The said goods were being cleared by them on payment of duty in terms of Section 4 of the Central Excise Act. The said goods were admittedly classifiable under heading 3402 20 10 and 3402 20 90.
7. The dispute in the present appeals relates to the legal issue as to whether the said goods would attract duty in terms of Section 4 or the same are required to discharge their duty liability in terms of Section 4A of the Central Excise Act, in terms of Sl.No.40 of Notification No.49/2008. For better appreciation, we reproduce the said sl.no. 40 of the Notification in question.
403401 11, 3401 19 or 3402 Organic surface active products and preparations for use as soap in the form of bars, cakes, moulding pieces or shapes, other than goods falling under 3402 90 20 30 As is clear from the above sl.no., organic surface active products and preparation for use as soap are required to be in the form of bars, cakes, moulding pieces or shapes so as to attract the said notification. The original adjudicating authority accepted the appellants stand that inasmuch as the goods in question are a liquid form, they would not get covered by the said notification. On the other hand, the reasoning of the Commissioner(Appeals) is that the said sl.no.40 of the notification consists of two parts i.e. organic surface active products and preparations for use as soap. The criteria of the goods being in form of bars, cakes, moulding pieces or shapes is associated only with the preparation for use as soap and not with the organic surface active products. For the above observation, he has referred to the description of the products as appearing against Sl.No.3401 and 3402. Accordingly he has observed as under:-
12. It is clear from the description in column 2 appearing at st. no.40 of the said notification, that it has to be interpreted in relation to the relevant chapter heads 3401 and 3402. The product category - "preparations for use as soap in the form of bars, cakes, moulding pieces or shapes" is specifically covered under chapter head 3401 and do not find mention under chapter head 3402. The other category -"Organic surface active products" finds mention under both 3401 and 3402. However, there are no other products of chapter head 3402 which are mentioned in the said. notification. Hence, it can be inferred that the chapter head 3402, mentioned in the notification, refer to "Organic surface active products" only. The products manufactured by the Respondents fall under the said chapter head 3402. 1 find that the form of the products i.e., bars, cakes etc., finds mention only in chapter head 3401 and not in 3402. In this regard, the Respondents argue that the heading 3402 20 cover preparations for washing and cleaning, which are in various forms including Bars, Cakes, Moulding Pieces, Shapes and also in the form of liquid, and that the said notification has consciously excluded cleaning and washing preparations in the form of liquid. I am not in agreement with this argument because, the description -"preparations for use as soap in the form of bars, cakes, moulding pieces or shapes" is a self-contained description of a category of goods falling under 3401, and only a part/ portion of it - "for use as soap in the form of bars, cakes..." cannot be applied tc, the category - "Organic surface active products" falling under the head 3402. The products under the two categories - (i) "Organic surface active products" and (ii) "preparations for use as soap in the form of bars, cakes, moulding pieces or shapes" are separate and distinct. Hence, I do not accept the argument that "Organic surface active products" of chapter head 3402 should also be in the form of bars, cakes etc., to be covered under the said MRP notification. I am in agreement with the argument of department in this regard. I find that the original authority has erred in holding that the goods manufactured by the Respondents are not covered by the said notification no.49/2008-CE(NT), for MRP based assessment, as they are in liquid form.
8. For better appreciation of facts, we also reproduce the relevant entries below:-
Tariff item Description of goods Unit Rate of duty (1) (2) (3) (4) 3401 3401 11 Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces or shapes, whether or not containing soap; organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap; paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent
-- Soap and organic surface-active products and preparations, in the form of bars, cakes, moulded pieces or shapes, and paper, wadding, felt and nonwovens, impregnated, coated or covered with soap or detergent:
-- For toilet use (including medicated products):
Tariff item Description of goods Unit Rate of duty (1) (2) (3) (4) 3402 3402 11 Organic surface-active agents (other than soap), surface-active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of heading 3401
-- Organic surface-active agents, whether or not put up for retail sale:
-- Anionic:
9. After appreciating the submissions made by both the sides, we find that the issue involved in the present appeals is as to whether the appellants products which are admittedly classifiable under heading 3402 and are admittedly in liquid form, are required to discharge duty under Section 4 of the Central Excise Act or under Section 4A of the Act in terms of the Notification No.49/2008. Sl.No.40 of the said notification is the relevant portion, which already stands reproduced by us in the preceding paragraphs. In terms of the said serial number, organic surface active products and preparation for use as soap, in the form of bars, cakes, moulded pieces or shapes are liable to duty of excise under Section 4A of the Act. The original authority has already extended the benefit of the said sl.no. and has held that the organic surface active products which are in liquid form will not get covered by the said entry. On the other hand, the Revenues contention is that the expression in the form of bars, cakes, moulding pieces or shapes is relatable to only to preparations for use as soaps and not to organic surface active products.
10. We find that it is only the said entry which requires interpretation and any reference to the classification heading, for interpreting the notification, is irrelevant. There is no dispute about the fact that the entry 3402, under which the appellants products fall, is one of the specified entry under sl.no.40. The said entry relates to organic surface active products. The description of the goods appearing against the said entry clearly reflects upon the intention of the legislation that it is only the organic surface active products and preparations for use as soap, which are in the shape of bars, cakes, moulding pieces or shapes, which would get covered under the said entry. If the Revenues contention is correct, the entry, according to us, would have read as preparations for use as soap in the form of bars, cakes, moulding pieces or shapes and organic surface active products. In other words if the legislature intended to cover all the organic surface active products, which may be in a shape other than bars, cakes, moulded pieces or shapes, they would have referred to the organic surface active products, after describing the preparations for use as soap in the form of bars, cakes, moulding pieces or shapes. There is no warrant to hold that the expression in the form of bars, cakes, moulding pieces or shapes referred to only preparations for use as soaps and not to organic surface active products. The overall reading of the entry clearly reveals that both the products should be in the form of bars, cakes, moulding pieces or shapes so as to attract the said sl.no.40.
11. In view of the above, we find that sl.no.40 does not cover organic surface active products, in liquid form and as such, their assessment to duty under Section 4A is not called for. Accordingly, the impugned order of Commissioner(Appeals) is set aside and the order of the original authority is restored. Appeals are allowed with consequential relief to the appellant, if any.
(Order pronounced on..) B.S.V.MURTHY TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER Raja.
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