CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHENNAI REGIONAL BENCH – COURT NO. III Excise Appeal No. 40706 of 2017 (Arising out of Order-in-Appeal No.495/2016 (CXA-II) dated 22.12.2016 passed by Commissioner of Central Excise (Appeals-II), Chennai)

M/s. Hindustan Unilever Ltd., ....Appellant Skin Care Unit, NH-45A, Vadamangalam, Puducherrry-605 102.

Versus Commissioner of GST & Central Excise … Respondent No.1, Goubert Avenue, Puduchery-605 001.

APPEARANCE:

Ms. Padmavati Patil and Mr. Vijay Roshan, Advocates for the Appellant Mr. S. Subramanian, Special Counsel and Mr. M. Selvakumar, Authorised Representative for the Respondent CORAM:

HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)

HON’BLE MR. M. AJIT KUMAR, MEMBER (TECHNICAL)

FINAL ORDER No.40597/2025 DATE OF HEARING: 27.01.2025 DATE OF DECISION: 09.06.2025 Per: Shri P. Dinesha This appeal is filed against Order-in-Appeal No.495 (2016) (CXA-II) dated 22.12.2016 passed by Commissioner (Appeals), Chennai.

2. Heard Ms. Padmavati Patil, Ld. Advocate along with Mr. Vijay Roshan, Ld. Advocate for the Appellant and Mr. S. Subramanian, Ld. Special Counsel along with Mr. M. Selvakumar, Ld. Assistant Commissioner, for the Respondent 3. The facts of the case are that the Appellants are engaged in the manufacture of inter-alia "Skin Care Preparations" falling under Chapter 33 and Pure Petroleum Jelly falling under Chapter 27 of the First Schedule to CETA. The Petroleum Jelly is being marketed under the brand name of "Vaseline". Pure Petroleum Jelly manufactured by the Appellants was/is being classified under Tariff Item 2712 10 90 and duty was discharged thereon at the applicable rates. The rate of basic excise duty for the disputed products was changed from time to time during the disputed period; with effect from 07.12.2008, rates of duty for Cosmetics was reduced from 14% to 10% and further reduced from 10% to 8% w.e.f. 25.02.2009. It was enhanced to 10% from 27.02.2010 and further enhanced to 12% from 17.03.2012. The percentage of abatement was changed from time to time, but the rate for Petroleum Jelly under Tariff Item 2712 10 90 remained same at 14%. The Appellants filed Self- Declarations, Monthly ER-1Returns, etc. from time to time. In the year 2009, the Appellants developed two new products, namely "Petroleum Jelly-Baby" and "Petroleum Jelly-Aloe Vera" and classified the same as Cosmetics under Chapter 33 and paid duty applicable thereto. For manufacture of White Petroleum Jelly IP, packing size of 8, 25, 40, 50, 100 & 200 gms, Food and Drugs Administration, Pondicherry (FDA) had issued Food and Drugs Licence No.PP/5499/98 dated 06.11.1998 in Form 25, under Rule 70 of Drugs and Cosmetics Rules, 1945 (P/39). Said FDA Licence indicates that the disputed products are the products other than those specified in [Schedules C, C(1) and X] to the Drugs and Cosmetics Rules, 1945. As the Appellants started manufacturing additional Cosmetic products, they applied for and following additional endorsement dated 27.10.2010 was made in the Licence No.PP/5498/98 dated 6.11.1998 (P/42) issued to them:

Additional Endorsement:

106. Vaseline Light Hydrating Jelly-Aloe Fresh

107. Vaseline Gentle Protective Jelly-Baby (Domestic)

Pack Size: 25ml. Pack

4. It appears that a Show Cause Notice dated 06.04.2015 was issued proposing to demand a duty of ₹3,03,965/- with applicable interest and penalty on the clearances made by the appellant of the disputed products during the period March 2014 to January 2015, alleging incorrect classification and thereby proposing to classify the disputed product namely Petroleum Jelly – Aloe Vera and Petroleum Jelly – Baby (variants of petroleum jelly) under tariff item 2712 1090. This was against the declared tariff item 3304 9990 by the appellant. It appears that the appellant filed its reply justifying its classification under CTI 3304 9990 but, however, vide Order-in-Original No.37/2012 (RF) dated 05.03.2012 the Original Authority confirmed the proposals made in the Show Cause