By TIOL News Service

NEW DELHI, JULY 06, 2017: BY the Finance Act, 2007, in the Third Schedule to the Central Excise Act, 1944, the following amendment was made -

(5) after S. No. 97 and the entries relating thereto, the following S. No., tariff item and entries shall be inserted, namely:-

With this entry read with the provisions of Section 2(f)(iii) of CEA, 1944 packing or re-packing of tooth brushes in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail sale price on tooth brushes or adoption of any other treatment on tooth brushes to render them marketable to the consumer has been included under the definition of 'manufacture' and, therefore, such activity would be liable to payment of duty of Central Excise.

It is the case of the appellant that what they deal with is “Inter-dental brushes” and although the same is classifiable under CETH 9603 2100 since specifically covered by the tariff entry, the same is not covered under the Entry no. 97Aabove since not expressly mentioned. Inasmuch as the items toothbrushes and inter-dental brushes belong to separate categories and whereas toothbrush is available in any grocery shop, inter-dental brush is available only at a chemist shop.

The appellant also submits that the issue is of interpretation and hence larger period of limitation is not invokable and so is the case with imposition of penalty in view of decision in Aarti Drugs Ltd = 2015-TIOL-1888-CESTAT-MUM .

The AR submitted that dental-plate brush is also a toothbrush; non-mention of dental-plate brush against the entry 97A of the Third Schedule does not mean it is excluded.

The Bench observed –

“5. After having seen the products, it appears that the subject item, inter-dental brush of any kind is also a toothbrush and is used as an item for cleaning teeth. It is true that the item inter-dental brush or dental plate brush is not easily available at any grocery shop; the same is available only at a chemist shop. However, both are toothbrushes and both are covered by the Central Excise Tariff heading no. 96032100. Though it is true that inter-dental brush is specifically not mentioned in the entry 97A of the Third Schedule to Central Excise Act, 1944, Tariff sub-heading 96032100 is mentioned therein. Once Tariff sub-heading 96032100 is mentioned with the description toothbrush, one cannot arrive at the conclusion that inter-dental brush or dental-plate brush is not part of that entry or the said description, when dental-plate brush is also a kind of toothbrush. Therefore, it is held that subject item is covered by entry at Sr. No.97A of Third Schedule to C.E. Act, 1944. Hence, it is subject to excise duty.”

Nonetheless, agreeing with the submission of the appellant on the time bar aspect, the CESTAT held that the demand beyond the normal period is not sustainable and so is the imposition of penalty.

The duty for the 'normal period' was confirmed along with interest and for computing the same the matter was remanded to the original authority.

The appeal was partly allowed.

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