Per Gowri Shankar: M/s Alpine Industries, New Delhi manufacture product named Lip Salve. This product, which is supplied exclusively to the Ministry of Defence for use by members of the Defence Forces, was classified by the manufacturer under sub-Heading 3003.20 of the Central Excise Tariff without payment of duty. The Department was, however, of the view that the product should be classifiable under Heading 3304.00 leviable to duty @105% ad valorem. A show cause notice was, therefore, issued proposing re-classification and consequently recovery of duty. After considering the reply and hearing the party, the Principal Collector, Central Excise, New Delhi, held that the product was not a medicament classifiable under Heading 3003.20 as claimed by the manufacturer, but the product was classifiable under heading 3304.00. He, however, extended the benefit of Notification No. 393 dated 22.8.1986 and correspondingly confirmed the demand of duty.

2. The Order of the Collector was passed on 26th October, 1988. Subsequently, the manufacturer, while classifying the goods under heading 3304.00 claimed the benefit of Notification 27-CE dated 20.3.1990. The show cause notice was issued to h