- (1.) The appellant is a charitable society registered under the Societies Registration Act and is also registered under the U.P. Khadi Gramodyog Board. The appellant also claims to be registered as a small scale unit and, one of its activities is, manufacturing of Satritha Herbal Shampoo and Neem Shampoo for supply to the Khadi and village industry. According to the appellant, the shampoo manufactured by them is eligible for exemption of duty as per Notification No.140/85-CE dated 5th May, 1983 as amended from time to time. On the other hand, the Central Excise department was classifying the said shampoo under Tariff Chapter sub-heading No.3305.99, Chapter 33 of the Central Excise Tariff Act, 1985. Since there was a dispute with regard to the classification of the product and the appellant was not agreeing to the stand of the department, the appellant accordingly, filed a declaration under Rule 173B of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) in the prescribed proforma. In the remark column, the appellant mentioned: "We do not agree with the contention of the department that our product is classifiable under sub-heading 3305.99. Therefore, we shall pay duty whatever is applicable on product under protest under Central Excise Rule 233B for which we have filed separately a letter to this effect to the Assistant Commissioner, Central Excise Moradabad."
(2.) In addition to the above, the appellant issued a letter dated 24th December, 1996 to the Assistant Commissioner, Central Excise Division, Moradabad indicating that the manufacture of shampoo does not attract central excise duty under Chapter heading 3305.99 and the conclusion drawn by the Central Excise department treating the said product as an excisable good was not tenable in law. The appellant in the said letter accordingly prayed that they may be permitted to avail the provisional assessment to duty under Rule 9B of the Rules till the case was finally decided. The appellant also informed the authority that in order to resume their business of manufacture of the said product and also to comply with the requirement of Central Excise Rules they were submitting the declaration of goods under Rule 173B of the Rules under protest. The letter was accompanied by the said declaration form, which was duly received by the Assistant Commissioner. For facility, the letter dated 24th December, 1996 issued by the petitioner to the Assistant Commissioner, Moradabad is extracted hereunder in extenso: "From: DENAJE SANSTHAN 39, Malviya Nagar, Moradabad. To The Assistant Commissioner, Central Excise Division, Moradabad. Through: The Superintendent, Central Excise Range-2, Moradabad. Dear Sir, We have been granted Registration Certificate No.2806023250-A-1/Ch33/01/96 dt. 13.12.1996 under Rule 174 of Central Excise Rule, 1944 with reference to our application dated 13/14.11.1996, which was submitted for the purpose of carrying on our business stopped suddenly by effecting seizure on 19.9.1996 by Central Preventive Staff of Moradabad of our stock of Shampoo (Satritha, Neem and Herbal Types) manufactured out of raw materials of Sikakai, Amla Ritha without use of power or machines. The applicant is a Registered Charitable Society under the Societies Registration Act and has also been registered with U.P. Khadi & Gramudyog Board to collect Jari Buti to carry on the business for manufacture of Satritha Herbal Shampoo and Neem Shampoo as village Industry from 22.5.89 for supply to the Khadi & village industry. The aforesaid product therefore does not attract Central Excise duty under Chapter Heading 3305 or sales Tax or any other tax and the conclusion drawn by the Seizing Officers by treating the aforesaid product manufactured out of Sikakai, Amla and Ritha as excisable goods is therefore not tenable under law. Even the Supreme Court of India in its judgment dated 22.8.1972 passed in Civil Appeal No.37 of 1969 has held that shampoo is a liquid soap, falling under Chapter Heading 34.01. Accordingly, there was no controversy about classification of the product the applicant sought remedy under article 226 of Constitution by filing a writ before the Hon'ble High Court Allahabad on 30.10.1996 which has since been admitted. It was claimed therein that as the product in question is one of the items of Khadi and Village raw materials namely Sikakai, Amla and Ritha, no central excise duty is payable and the same is sub-judice.
(3.) In order to resume the business of the manufacture and sale of the above product, and also to comply with the requirements of Central Excise Rules, 1944 we are submitting herewith the declaration of goods produced or manufactured in terms of Rule 173-B of the Central Excise Rules, 1944 for favour of necessary action at your end.;