TMI Blog2011 (5) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... ying it under Chapter 15. Vide Circular No. 145/65/95-CX dated 1-8-1995 the CBEC had clarified that coconut oil whether pure or refined or whether packed in small or large containers merited classification under Chapter Sub-Heading No. 1503 if it satisfied the criteria of 'fixed vegetable oil' laid down in Chapter Note 3 of Chapter 15. It was also clarified that if the containers bore labels, literature etc. indicating that it was meant for the application on hair as specified under Note 2 of Chapter 33 and/or if the coconut oil had additives (other than BHL) or had undergone processes which made it a preparation for use on hair as mentioned in Chapter 6 of Chapter 33 then the coconut oil merited classification under Chapter 33. Appeal dismissed - decided against Revenue. - Excise Stay Applications Nos. 407 to 414/2011 Excise Appeal Nos. 665 to 672/2011 Excise Appeal Nos. 743/2010 and 1269 to 1273/2010 - Final Order Nos. 326 to 339/2011 - Dated:- 3-5-2011 - M.V. Ravindran, Judicial Member and P. Karthikeyan, Technical Member C.S. Lodha, Adv., for the Appellant D.P. Nagendra Kumar, JCDR, for the Respondent ORDER M.V. Ravindran: These stay petitions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. (Co-Noticee) Vs. CCE and ST, Tirupati 18 [17 to 21/2009] dt.31.08.2009 9. E/672/2011 M/s. Hindustan Unilever Ltd. (Co-Noticee) Vs. CCE and ST, Tirupati 20 [17 to 21/2009] dt.31.08.2009 Revenue's Appeals: Sl. No. Appeal Nos. Name of the parties Impugned OIO No. and Date 1. E/1269/2010 to E/1273/2010 The Commissioner of Central Excise, Tirupati Vs. M/s. Capital Technologies Ltd. 17 to 21/2009 dt.31.08.2009 5. In the appeals filed by the assessee, the assessee has challenged that portion of the impugned order wherein the adjudicating authority has held against them while Revenue is challenging that portion of the order wherein the adjudicating authority has held in favour of the assessee as regards the packets of Coconut oil which are containing 500 ml. 6. The relevant facts that arise for consideration in this case are the appellant herein was having a factory, which was unregistered, as they were engaged in the repac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars cited by the assessees will not be applicable to the case in hand and on merits, held that the Board's Circular dated 03.06.2009 would cover the issue in favour of the Revenue and coming to such a conclusion, confirmed the demands and also consequent penalties and interest and confiscated the goods, which were seized and provisionally released on payment of redemption fine and also imposed penalties on the appellants i.e. M/s. Capital Technologies Ltd. as well as M/s. Hindustan Lever Ltd. The adjudicating authority also appropriated bank guarantee given by the assessee to the tune of ₹ 27,51,000/-. 7. The learned counsel assailing the order of the adjudicating authority took us through the OIO and more specifically the findings of the adjudicating authority. It is his submission that the adjudicating authority has not considered the issue in a proper perspective and has gone into the fact that due to amendment to Note 2 of Section VI and Note 3 to Chapter 3 of the Tariff. It is his submission that in paragraphs 4.9 and 4.10 of the impugned Order-in-Original, the adjudicating authority has reproduced the Central Board of Excise and Custom's Circular No. 890/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressed which was in respect of the very same issue, which is being agitated before this bench. 8. The learned JCDR, on the other hand, would submit that the adjudicating authority has correctly come to the conclusion that the classification of the repacked coconut oil into retail packets of 50ml, 100ml, 200ml would be under Chapter Sub-heading 33. It is his submission that Note 2 of Section VI of the Central Excise Tariff Act and under 3 of Chapter 33 of the Central Excise Tariff Act, 1985 would render the product classifiable under Chapter 33. It is his submission that the impugned goods are covered under Section 76 of the Tariff and are suitable for use as hair oil and are put up in retail packets hence, rightly classifiable under Heading 3305 of the Central Excise Tariff Act, 1985. It is his submission that the packaging specification report of M/s. HLL clearly specifies that the impugned product would fall under the category of hair care. He would take us through the entire facts of the case, specification issued by the said M/s. HLL in respect of the packing materials to be used by the appellant for repacking of said coconut hair oil. It is his submission that a report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is his submission that hair oil is not defined anywhere in the statute and hence, judgment of the Supreme court in the case of Asian Paints India Ltd. vs. CCE [1989 (35) ELT 3 (SC)] should be relied upon wherein it is held that when definition of a word has not been given, it must be considered in its popular sense and not according to scientific or technical sense. He would also rely upon the judgment of the Hon'ble Supreme Court in the case of Dabur (India) Ltd. vs. CCE, Jamshedpur [2005 (182) ELT 290 (SC)], Shree Baidyanath Ayurved Bhavan Ltd. vs. CCE, Nagpur [1996 (83) ELT 492 (SC)] for the very same proposition and submits that the product Nihar filtered coconut oil is understood, purchased and consumed as hair oil by the general public and accordingly merits classification under Chapter 33 of the Central Excise Tariff Act, 1985. It is his submission that the judgment relied upon by the appellant's counsel in the case of Aiswarya Industries (supra), there is no finding or observation of the Hon'ble Tribunal about there being any internal document of the party categorizing the product as 'hair care product' or 'hair oil' or under 'cosmetics D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry case of the Revenue any further as though these were documents relied upon, the adjudicating authority has not relied upon these documents for coming to a conclusion. 10. We have carefully considered the submissions made at length by both sides and perused the records. The issue involved in all these cases on hand is the classification of coconut oil packed in containers and pouches. It is undisputed that the appellants herein is repacking the goods of brand New Nihar Naturals declared to be edible grade coconut oil received from HLL into small retail packets. The findings of the adjudicating authority in this case for coming to a conclusion that the products would fall under chapter sub-heading No. 33 and not under Chapter No.15 has been recorded by her in para 4.9, 4.10, 4.11 and 4.12. The main substances of the said findings are that the adjudicating authority has relied upon the Board's Circular dated 03.06.2009 reproduced toto in the above said paragraphs to come to a conclusion that the products would merit classification under Chapter 33. 11. On the other hand, we find that the order of this Tribunal in the case of Aiswarya Industries was squarely dealing with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the excisable goods impugned in the proceedings. A plethora of material showed that in common parlance the impugned goods were as hair oil and not edible oil as claimed by the parties. Classification of the impugned product on the basis of the language of the relevant entries, Chapter Notes and Section Notes was under CSH 3305 90 19 as unperfumed hair oil. 3. In the appeal filed by the job workers, the impugned order is assailed on the basis that the proceedings were triggered by changes in the Central Excise Tariff in the wake of the Central Excise Tariff (Amendment) Act, 2004 and that the changes did not justify the impugned revision of classification. Circulars issued by the CBEC on the classification of the impugned goods did not approve of the same under CH 3305. A number of decisions of the Tribunal on the classification of the subject item had held the same to be coconut oil and not hair oil. These decisions had relied on the related HSN Explanatory Notes which had not changed on 28-2-2005. Classification of the subject goods had already been decided by the Tribunal vide Final Order No. 638/08 dated 25-6-08. 4. The following grounds were taken by the appellants:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had changed with effect from 28-2-2005 was incorrect. The Tribunal, in its decision in Amardeo Plastics Industries v. Commissioner of Central Excise, Belapur reported in 2007 (210) E.L.T. 360 (Tri.-Mumbai), observed that the erstwhile Note No. 2 to Chapter 33 and Note No. 3 to Chapter 33 of the HSN were in substance identical in their scope. The Commissioner had ignored the ratio of a number of decisions of the Tribunal on the basis that those decisions were on a law which had since changed. This was an incorrect finding. It is claimed that the Central Excise Tariff (Amendment) Act, 2004 [8 digit classification code] was not intended to effect any change in duty incidence on commodities. The changes proposed were to facilitate trade. The Finance Minister had stated this aim in the statement of objects and reasons in the Parliament at the time of presenting the relevant bill. The CBEC also had clarified that the amendment Act introduced only technical changes in the scheme for Central Excise Classification. This again made it abundantly clear that the present exercise undertaken by the authorities were totally unwarranted. The appellants relied on Circular No. 145/56/95/CX., dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be classified under CH 3305 on repacking Note 2 of Section VI did not apply in the situation. As regards the Commissioner's finding that the impugned goods had been packed in plastic containers manufactured with recycled plastic in excess of 15% of the total plastic used and that edible oil could not be sold in such containers, the appellants assailed the finding as without basis. The appellants had furnished the opinion to the Commissioner from the Indian Institute of Packing certifying the fact that even 70% re-ground plastic could be used in the manufacture of plastic bottles as that would meet the ISI specifications applicable to packing of foodstuff. In any case, the packing not meeting the standard specified in PFA Act was not determinative of classification of coconut oil sold in the plastic containers. The appellants carried on its business under appropriate licence issued under the PFA to manufacture edible oils. As regards the trademark Parachute affixed on the bottles of coconut oil as having been assigned for trading in hair care products including hair oil, Marico had informed that application for registering Parachute logo and brand for selling hair oil and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute in the case considered in that final order was post-28-2-2005. We find that in the orders impugned in the appeals before us, the Commissioner had relied on a few additional grounds to classify the subject product as hair oil. We discuss the additional grounds as follows:- Marico had applied for registration of the logo and trademark used for marketing its products from the competent authority. The Commissioner proceeded on the basis that Marico and its job workers used a green coloured label exclusively for selling hair oil. He had assumed that an orange coloured label was exclusively used for selling edible oil. After application for its registration in 1997, the appellant had claimed, that it had never marketed any product under the orange label and that all its products were sold using the green label only. Moreover, the material allegation of Marico that its job workers used green coloured labels for marketing hair oil exclusively was absent in the show-cause notice. Marico had never marketed any product under the orange label and all along marketed its entire range of products using the green label only. We find that in the absence of any label which could be identified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards this ground, we find that Chapter 15 covers all varieties of coconut oil, edible as well as non-edible. It is not essential that the coconut oil is edible and marketed in packaging approved by the PFA Rules for classifying it under Chapter 15. 9. We have already dealt with the classification issue in detail in our Final Order No. 638/08, dated 25-6-2008 in the case of Madhan Agro Industries Pvt. Ltd. Paragraphs 7 to 15 of the above order is reproduced below:- 7. The cardinal principle for classification is that, for legal purposes, one has to determine the classification according to the description given in the Heading No. under the tariff, read with relative Section Note or Chapter note, if any. From the above tariff entry, it is obvious that with effect from 28-2-05, refined coconut oil falls under CSH 15131900. Moreover the tariff entry and the corresponding HSN entry are fully aligned as regards the 'coconut oil and its fractions'. 8. Similarly Note 3 to Chapter 33 of the Central Excise Tariff and the HSN are identically worded. Prior to 1-3-2005, Note 2 to Chapter 33 (which got renumbered as Note 3 from 1-3-2005) prescribed that Heading Nos. 3303 to 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )] Tribunal considered the above circular of the Board. In that case, the containers (HDPE bottles) carried the description 'edible oil' and nowhere on the bottle it was written that it was meant for application on hair. The coconut oil had not undergone any processes or contained any additives. Noting these facts, the Tribunal observed that Chapter Note 2 of Chapter 33 excluded such oils from its purview. Accordingly it was held that coconut oil did not fall under Chapter Heading 33. That decision was also consistent with the following earlier decisions of the Tribunal cited in that case before it. (a) Kothari Products Ltd. v. CCE - 2002 (139) E.L.T. 633 (T) (b) Srikant Sachets Pvt. Ltd. v. CCE - 2005 (180) E.L.T. 401 (T) (c) CCE v. Essen Products (I) Ltd. - 2006 (200) E.L.T. 342 (T). 12. In the above decision the Tribunal analysed the scope of Chapter Note 2 to Chapter 33 and observed that it laid down three conditions for classifying the products under Chapter 33. (i) Suitable for use as goods of these headings (ii) Packing/labeling, literature/any other indications of their use as cosmetic or toilet preparations (iii) Put up in a form clearly speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. It can be seen from the above reproduced entire judgment of the Tribunal that all the submissions made by the learned JCDR as regards the change in Chapter Note or Section Notes was considered by the bench and after consideration of the submission, had come to the conclusion that the post amendment to Central Excise Tariff Act i.e. from 28.02.2005, the products which are identical to the products in hand were classifiable under Chapter 15 of the Central Excise Tariff Act. We do not find any reason to deviate from the said judgment. 13. The learned JCDR submits that the evidences unearthed by the Revenue in the current case in the form of packaging specifications, Nihar Coconut Oil Hazard and Environmental Assessment Report, Hair Regional Innovation Centre Report, etc. would not carry the case of the Revenue any further, as it is undisputed in this case that the products which were put to be marketed by the appellant has the following labels. New NIHAR Naturals STRENGTH OF NATURE Double filtered, 100% Pure Nihar Naturals Coconut Oil Contains the wholesome Nourishment of coconuts to give You the Strength of Nature in every drop. Nihar Naturals i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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