1998(04)LCX0179
IN THE CEGAT, WEST REGIONAL BENCH, MUMBAI
S/Shri Gowri Shankar, Member (T) and G.N. Srinivasan, Member (J)
COMMISSIONER OF CENTRAL EXCISE, MUMBAI
Advocated By : Shri Shaukat Merchant, Advocate, for the Appellant.
Shri C.P. Rao, SDR, for the Respondent.
[Order per : Gowri Shankar, Member (T)]. - These three applications for waiver of deposit of duty totalling Rs. 1,33,50,854/- aprox. and penalty of Rs.1 crore.
2. Advocate for the applicant explains that the demand has arisen on the finding of the Commissioner that Liril, a liquid toilet soap manufactured by appellant is classifiable not in Heading 34.01 as claimed but Heading 33.04. He contends that product consists of entirely of liquid soap in which organic surface active agent is present to the extent of less than 2%. It is therefore a soap since the heading covers soap in any form. The Explanatory Notes to the HSN at page 518 which exclude from this heading liquid soap which contains organic surface active products and has not been incorporated in the Central Excise Tariff and the Commissioner was in error in invoking the provision of this heading. In any event, even if classification under Heading 34.01 is excluded, the product will not fall under 33.04. That heading is limited to beauty & make up of preparations and preparations for care of skin and manicure. The product in question does not have any such properties.
3. It is further contended that five classification lists had been approved. In the absence of any requirement in law that presence of surface active agent was required to be declared to the department there is no justification to say that not mentioning it amounts to suppression. However, as evidence of the applicants he offered to deposit Rs. 25 lakhs.
4. Departmental representative contents that the Commissioner has found that the product was advertised as a preparation for the care of the skin and otherwise supports the Commissioner’s order. He points out that even if the product is not classifiable under Heading 33.04 may be classified under 33.07 as a bath preparation. He contends that the failure of declaring the products has rightly resulted in the Commissioners (sic) that there was suppression.
5. Prima facie it is not possible to say that the notice was in error in relying on the Explanatory Notes. The words or Heading 34.01 of the Tariff are identical to those in the HSN Tariff. Therefore, it would appear prima facie that liquids containing synthetic organic surface agents would not be classifiable under Heading 34.01. At the same time it is prima facie not classifiable under Heading 33.04. Apart from the fact that the advertisements of which copies have been produced do not refer to the product containing any properties relating to beautification of skin care, advertisements by themselves cannot be the basis for classification. On limitation too, applicant has a strong case prima facie. Five classification lists had earlier been approved. In the absence of any statutory requirement to declare the presence of synthetic surface organic active agent not declaring it cannot prima facie amount to suppression.
6. Taking all these aspects into account we accept the offer made by the advocate for the applicant to deposit Rs. 25 lakhs within two weeks from today. On such deposit being made the deposit of remaining amount of duty and penalty is waived and recovery stayed. The detention of excisable goods by the department is hereby revoked and the applicant is free to deal with them.
Equivalent 2000 (124) ELT 641 (Tribunal)