1984 (8) TMI 342 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Sunsilk Hair Conditioner under the Central Excise Tariff Schedule (CET).
2. Determination of whether Sunsilk Hair Conditioner falls under Item 14F(ii) or Item 68 of CET.
3. Evaluation of evidence and affidavits provided by both parties regarding the classification.
4. Analysis of the Department's change in classification stance from non-excisable to excisable under Item 14F(ii).

Detailed Analysis:

1. Classification of Sunsilk Hair Conditioner under the Central Excise Tariff Schedule (CET):
The primary issue in the appeal is the correct classification of "Sunsilk Hair Conditioner" under the Central Excise Tariff Schedule (CET). Lever contends that the product is not excisable and falls under Item 68, CET, while the Department classifies it under Item 14F(ii).

2. Determination of whether Sunsilk Hair Conditioner falls under Item 14F(ii) or Item 68 of CET:
The Assistant Collector initially classified the product under Item 14F(ii)(a) as a preparation for the care of hair, specifically as a lotion, cream, or pomade. However, Lever argued that the product is distinct from hair lotion, cream, or pomade and should be classified under Item 68, CET. The Appellate Collector's order of 14-9-1976 called for a de novo adjudication due to non-mention of the specific sub-item under 14F(ii). On re-adjudication, the Assistant Collector maintained that the product fell under Item 14F(ii)(a). Lever's appeal against this order was rejected by the Appellate Collector, who stated that the scope of Item 14F(ii) included any preparation for the care of hair, not limited to the specified goods under sub-items (a), (b), and (c).

3. Evaluation of evidence and affidavits provided by both parties regarding the classification:
Lever presented affidavits from technical experts, consumers, a beautician, and a dealer to support their claim that Sunsilk Hair Conditioner is neither a hair lotion, cream, nor pomade. Dr. Siva Raja Iyer's affidavit, a key piece of evidence, detailed the compositional and functional differences between hair conditioner and hair lotion, cream, or pomade. The Department, on the other hand, did not provide counter-affidavits or substantial evidence to rebut Lever's claims. The Departmental Representative cited technical literature suggesting that hair conditioners could be in the form of lotions or creams, but this did not effectively counter Lever's evidence.

4. Analysis of the Department's change in classification stance from non-excisable to excisable under Item 14F(ii):
The Department initially classified the product as non-excisable until 1975, when it was reclassified under Item 14F(ii). Lever argued that this change in classification was abrupt and without cogent reasons. The Appellate Collector's order of 17-12-1981, which classified the product under Item 68, CET, was not challenged by the Department, indicating inconsistency in the Department's stance.

Conclusion:
The Tribunal concluded that Sunsilk Hair Conditioner should be classified under Item 68, CET, from the date of its insertion in the Tariff. The Tribunal emphasized that the burden of proof lies on the revenue to establish that a product falls under a specified entry in the tariff schedule. The appeal succeeded, and the classification under Item 14F(ii) was rejected in favor of Item 68, CET. The Tribunal also noted that affidavits are a normal mode of proof and should not be arbitrarily rejected without testing their veracity. The Department's failure to provide substantial evidence to rebut Lever's claims further supported the decision to classify the product under Item 68, CET.