TIOL-DDT 2651
29 07 2015
Wednesday

THAT which you call a rose, by any other name will smell as sweet.

Addressing the graduates of a college in 1977, the famous humourist Art Buchwald said, "my generation gave you Close-Up toothpaste to find someone to marry you."

The question that was answered by the Supreme Court yesterday in a Central Excise case was whether 'Close Up whitening' was a toothpaste or not.

The question was raised sometime in the year 2002 after Hindustan Lever introduced a new product in the market called 'Close Up whitening' in 2001. The assessee classified the product under Chapter sub-heading 3306.90. The Revenue treated the classification as erroneous as according to it Close-Up Whitening also falls under Chapter sub-heading 3306.10 and not 3306.90. It also suspected that this product was deliberately misclassified in the said heading to evade payment of proper central excise duties by resorting to assessment of the product under Section 4 of the Central Excise Act, instead of assessment under Section 4A. Investigation into the matter was initiated resulting into searching of the premises of the assessee. Some documents, which the Revenue claims to be incriminating in nature, were seized, including a Box File with Heading 'Production Manual', namely, the literature containing pages 1 to 235 issued by the Dental Information Centre of HLL.

The Commissioner in his Order-in-Original dated December 10, 2003, confirmed the excise duty demand as mentioned in the show-cause notice. He, inter alia, recorded the following findings:

1. Close Up Whitening was known in the market or to the trade and public as tooth paste for cleaning the teeth as such it was nothing but tooth-paste used for cleaning the teeth.

2. M/s. Global Health Care Products in collusion with M/s. Hindustan Lever Ltd. by willfully suppressing the fact that Close-up Whitening was a variant of Close Up tooth paste classifiable under Tariff Heading 3306.10 failed to show particulars of classification, assessable value and duty leviable with an intention to evade payment of applicable central excise duties.

3. The contention of M/s. Global Health Care products that the product Close Up Whitening was classified under chapter sub heading No. 3306.90 was not accepted.

4. The said product was correctly classified under sub heading 3306.10 of the Tariff attracting the provisions of Section 4A of the Act."

The Tribunal set aside the order of the Commissioner and the aggrieved Revenue is before the Supreme Court.

The headings in dispute were like this:

As can be seen, there is one sub-heading for tooth powders and toothpaste and another one for other dentifrices.

The Supreme Court noted that the Chapter Heading makes it clear that it covers various preparations for oral and dental hygiene. These preparations specifically include dentifrices. Examples of such oral and dental hygiene are also given, like toothpaste, tooth powder, denture fixative pastes and powders. Out of these, two products which are covered by sub-heading 3306.10 are toothpaste and tooth powder. Other oral and dental hygiene preparations fall under the reminder sub-heading, i.e. 3306.90, nomenclature of which is 'Other'.

Revenue treats Close-Up Whitening as 'toothpaste'. The plea of the assessee, on the other hand, is that it is not toothpaste but a 'dental cleaner', which is different from toothpaste and, therefore, has to necessarily be covered by the residual sub-heading, i.e. 3306.90.

Therefore, the moot question is as to whether Close-Up Whitening is toothpaste or not.

If it is found to be toothpaste then the stand of the Revenue would be justified. On the other hand, if the product does not qualify to be a toothpaste, then the assessee stands vindicated.

The Supreme Court agreed with the Tribunal and held that Close-Up Whitening dental cleaner is not a 'toothpaste' but other form of dental hygiene and, therefore will have to be classified under sub-heading 3306.90 as a consequence.

The Supreme Court found these appeals bereft of any merits and were, accordingly, dismissed.

And just recall the learned Commissioner's words:

M/s. Global Health Care Products in collusion with M/s. Hindustan Lever Ltd. by willfully suppressing the fact that Close-up Whitening was a variant of Close Up tooth paste classifiable under Tariff Heading 3306.10 failed to show particulars of classification, assessable value and duty leviable with an intention to evade payment of applicable central excise duties.

Can't they be a little more courteous to their assessees? The other day I saw an order passed by an Assistant Commissioner on similar lines - that the assessee with an intention to evade duty had suppressed certain facts - the duty involved was 30,000 rupees and the assessee was paying more than a hundred crores a year as excise duty. This assessee was found to have suppressed and evaded 30,000 rupees.

Coming back to tooth paste, this product has always been a litigant subject. It was first a simple toothpaste; then it became a 'dental cream'; then it became an Ayurvedic cream - remember Vicco Vajradanti ayurvedic cream? It is not clear whether toothpaste is a health care product, a cosmetic product, a medicine or simply one of those products of the advertising industry - you buy those things which you don't need.

Every dentist knows that we actually don't need a tooth paste; the tooth paste doesn't clean the teeth, the brush does. Maybe the toothpaste only has a cosmetic value and as Art Buchwald says, maybe helpful in marriages.

When the British came to India, they laughed at us that we were cleaning our teeth with salt and coal, now paste manufacturers are advertising that their paste contains salt and charcoal!

We bring you this order of the Supreme Court today. Please see Breaking News

Anti Dumping Duty on Compact Fluorescent Lamps - No resurrection

PROVISIONAL Anti Dumping Duty on Compact Fluorescent Lamps (CFL) with or without ballast or control gear or choke, whether or not assembled, either in completely knocked down or semi knocked down condition, originating in, or exported from China PR, Sri Lanka and Vietnam, was imposed by Notification No. 126/2008-Customs, dated the 21st November, 2008. Final anti-dumping duty on CFL imports from these countries was imposed by notification 55/2009-Cus dated 26th May 2009. This notification was made effective from 21st November 2008 and it expired on 21.11.2013. They put life back into this notification in respect of China till 20.11.2014 by Notification No. 2/2014 -Cus(ADD), dated 03.01.2014.

November 2014 went unnoticed and now they have re-imposed the duty, but thankfully with no retrospective effect. It's now a new imposition and is valid for five years from 28.07.2015.

Notification No. 34/2015-Customs (ADD)., Dated July 28 2015

FTP - Export of Sawn Timber to Nepal - Raxaul Added

GOVERNMENT has amended Chapter 44 of Schedule 2 of ITC(HS) Classification of Export and Import Items.

Now, export of sawn timber to Nepal made exclusively out of imported wood logs through the port of Kolkata has been permitted from the Land Customs Station (LCS) of Raxaul also.

DGFT Notification No. 16/2015-2020, Dated: July 28, 2015

Permission for babus to go abroad - Govt to communicate decision in 21 days

WHEN Government servant applies for leave for going abroad on a private visit, separately prior permission of the Competent authority for such visit is also required. While granting such permission, many factors are required to be kept in view. For example, permission may be denied in the interest of security. Individuals facing investigation/inquiry on serious charges, who may try to evade apprehension by police authorities, or facing the inquiry, may also not be permitted to leave the country. On the other hand, it is also desirable that requests of Government servants for such permission are dealt with expeditiously.

Government has decided that:

In case due to specific nature of work in a Department, administrative exigencies, or some adverse factors against the Government servant etc., it is not expedient to grant permission to the Government servant, such decision for refusal should not be taken below the level of Head of Department.

It may be ensured that the decisions are conveyed to the Government servants within 21 days of receipt of complete application to the competent authority.

Any lacunae in the application should be brought to the notice of the Government servant within one week of the receipt of the application.

In the event of failure on the part of the competent authority to communicate its decision to the Government employee concerned within 21 days of receipt of the application, the employee concerned shall be free to assume that permission has been granted to him.

And, whom does one appeal to if the permission is denied?

DoPT F. No. 11013/8/2015-Estt.A-III., Dated July 27, 2015.

Should Babus call their Seniors "Sir"?

GOVERNMENT officers get very angry if you call them by their names. You are supposed to call them by their designations or as "Sir".

A fresh IAS officer doesn't like this Sirculture .

Bhupesh Chaudhary, Management consultant turned IAS Officer has tweeted,

"Too much formalism in IAS is not good for fraternity. Sir Culture even among colleagues is against openness and innovation in governance. Yes, just because I'm 1-2 yr junior in service doesn't mean I'm a child of lesser god."

This is a major problem that professionals from the private sector find when they join the Government.

Should the Chairman of the CBEC or CBDT call the Revenue Secretary, who is normally two years his junior as "Sir". Should the Members of the Board call the Chairman, 'Sir'.

I am told Gopalanathan as Chairman of CBEC used to address the then Revenue Secretary NK Singh as, 'NK'.

Maybe it is our tradition to call seniors and those in authority as 'Sir' as a mark of respect. Anyway the junior IAS officer will not be able to address his Chief secretary by first name.

Until Tomorrow with more DDT

Have a nice day.

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