Full Judgment Text
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CASE NO.:
Appeal (civil) 7145-7146 of 2004
PETITIONER:
Commissioner of Central Excise & Customs, Surat-II
RESPONDENT:
Nirmala Dyechem and Anr.
DATE OF JUDGMENT: 29/11/2006
BENCH:
S.B. Sinha & Markandey Katju
JUDGMENT:
JUDGMENT
Order
The fact of the case are that the repondent assessee is engaged in a
manufacture of various products including a product called "Domex Power
Cleaner/Domex All round Home Cleaner." The assessee had been classifying
this product under heading 38.08 of the Central Excise Tariff Act as a
disinfectant. The claim of the Revenue, however, is that the aforesaid
product is liable to be classified under the Central Excise Tariff heading
34.02. The question, therefore, involves in this case is whether the
product "Domex Power Cleaner/Domex All Around Home Cleaner" is liable to be
classified under heading 34.02 as claimed by the Revenue or heading 38.02
as claimed by the assessee.
Heading 34.02 reads as follows:
"34.02. Organic surface-active agents (other than soap); surface-active
preparations, washing preparation (including auxiliary washing
preparations) and cleaning preparations whether or not containing soap."
Heading 38.08 reads as follows:
"38.08. Insecticides, rodenticides, fungicides, herbicides anti-sprouting
products and plant growth regulators, disinfectants and similar products,
put up in forms or packings for retail sale or as preparations or articles
(for example, sulphur-treated bands, wicks and candles, and fly-papers.)."
The Tribunal in the impugned order dated 22.3.2004 has held that the
aforesaid product is liable to be classified as a disinfectant under
heading 38.08 and not under heading 34.02.
Before us Dr. R.G. Padia, learned senior counsel appearing on behalf of the
Revenue and Mr. Ravinder Narayan, learned counsel appearing on behalf of
the assessee, have advanced various arguments.
We need not go into those arguments in great details in view of the order
proposed to be passed by us. The question which falls for our
consideration, in our opinion, should be considered having regard to the
rival contentions of the parties, namely, whether the product is
principally used as disinfectant or as a cleaning preparation.
We may also place on record the submission of Mr. Ravindra Narayan that it
is sold in undiluted form also and, therefore, may be put in an appropriate
heading for the purpose of classification as it is manufactured on the said
basis, and hence it should be classified as such and not on the condition
in which it is used, which may be in diluted form. On the other hand, we
may also mention the submission of Dr. R.G. Padia, learned senior counsel
for the Revenue that the word ‘disinfectant’ in heading 38.08 has to be
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interpreted noscitur a sociis, which means that it has to take colour from
the preceding words like insecticides, rodenticides, fungicides,
herbicides, etc. Dr. Padia’s submission is that the expression ‘cide’ means
to kill, and hence the things mentioned in heading 38.08 are all things
meant for killing (germs, animals, etc.) and they do not reiate to products
which are basically meant for cleaning. He further submitted that some
cleaning materials may have some antiseptic or disinfectant qualities, but
that would not by itself bring the product under heading 38.08, instead it
has to be classified under heading 34.02. We regret that the matter has not
been examined from this angle.
The question, in our opinion, would therefore, requre deeper consideration
at the hands of the Commissioner. The matter has also to be considered from
the angle whether the product is having active agents, having surface
active functions or that is only subsidiary to its main function as a
clearning preparation.
We may also notice that the Tribunal as also the Commissioner have not
considered the rules of the interpretation of the schedule as also the
explanatory notes, harmonized commodity description and coating system
which may possibly provides aids for determinatin of the dispute. We are,
however, not expressing any definite view on the matter, as we are
remitting it to the Commissioner. We, however, make it clear that in the
facts and circumstances of this cases, the extended period of limitation as
provided for in Section 11AC of the Central Excise Act, 1944, shall not
apply.
We, therefore, set aside the impugned judgment and remit the matter to the
Commissioner for consideration afresh in the light of the aforesaid
observations. The appeals are allowed.
The parties shall be entitled to adduce fresh evidence before the
Commissioner, if they so desire.