TMI Blog1980 (1) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... colour, sold the same under the trade name of Palmolive Coconut Oil Shampoo. According to the petitioner, neither its Brushless Shaving Cream nor its Lather Shaving Cream nor its Coconut Oil Shampoo is commercially known as "soap". 3. On 24th November, 1965, the petitioner received from the Excise Authorities a demand notice for Rs. 8,816.13 pertaining to its Shampoo and Lather Shaving Cream, categorised in the notice as "Toilet Soap", cleared by the petitioner between 1st March, 1959 and 29th February, 1960. By its letters dated 16th March, 1966 and 20th April, 1966, the petitioner objected to this demand on three grounds, viz., (i) that none of these products was commercially known as "soap"; (ii) that merely by adding water, perfume and colour to the liquid soap purchased from the outside party, the petitioner could not be said to manufacture shampoo; and (iii) the demand was time-barred. Nothing turns upon the last objection and no argument was advanced before me on that aspect of the matter. 4. Thereafter, the petitioner received further 5 demand notices, two dated 17th December, 1965 and the remaining three dated 8th, 9th February 1966, for an aggregate amount of Rs. 82, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner. Be that as it may nothing need further be said on this reasoning given by the appellate authority, for this ground was with his habitual fairness, rightly not canvassed by Mr. Dalal, the learned Counsel appearing on behalf of the respondents. 6. Against this appellate order, the petitioner filed a revision application before the revisional authority, viz., the 1st respondent, which by its impugned order dated 30th September, 1975 dismissed the petitioner's revision application. It was held by the revisional authority that "shaving creams are a variety of 'Speciality Soaps' which are generally formulated by saponifying a mixture of coconut oil and stearic acid with mixed caustic potash and soda", and that "shampoos are also a variety of liquid soap". It was further held that boiled or hardened soap stock is a raw material for the manufacture of soap and is not commercially known as "soap". It is an intermediate between oil and soap and cannot be identified as "soap". It was further held that the Lather Shaving Cream and Mentholated Shaving Cream have percentages of soap as sodium and the coconut oil shampoo has also soap content. 7. Thereupon the petitioner filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y prior to 1st March, 1973 is attracted in respect of the petitioner's Lather Shaving Cream and Shampoo. 11. In order to resolve this controversy, what must be ascertained is whether at the relevant time the petitioner's products in question were commercially known as "soap". If so, the petitioner must fail. 12. At this stage a reference must be made to the relevant entries in force during the material period. The classifications and rates prevailing till 1970 are as follows:-Item 14F pertains to cosmetics and toilet preparations not containing alcohol or opium, Indian hemp or other narcotic drugs or narcotics, viz. (i) preparations for the care of the skin including beauty creams vanishing creams, cold creams, make-up creams, cleansing creams, skin foods and tonics, face powders, baby powders, toilet and talcum powders (ii) hair lotion, cream and pomade. The rate of duty attracted is 25% ad valorem. Item 15 pertains to "Soap" and reads as under :- "Soap" means all varieties of the product known commercially as soap- I. Soap, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power or of steam for heating : (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that mean that such a cleanser would qualify as soap under Item 15 ? Most certainly not, for to do so would be to nullify the definition of soap appearing in Item 15, viz, that it must be "known commercially" as "soap". What is important is not whether Lather Shaving Cream and Shampoo are used (assuming they are) as "soap" in the manner in which soap is conventionally understood to be used, but what is of importance is whether the Lather Shaving Cream and Shampoo are known commercially as "soap" as required by Item 15 itself. The user is of no consequence. If some rich and/or eccentric person uses shaving cream and/or shampoo instead of "soap" as commonly understood, he is entitled to do so. But surely such user would not make "known commercially" the lather shaving cream or shampoo as "soap" as defined in Item 15. It is the known commercial user that is the important and the only consideration to attract duty under Item 15. If a person were asked for soap from a shopkeeper and instead was given shaving cream or shampoo, it would require no great degree of intelligence and common-sense on the part of the person making the purchase, to reject outright what the shopkeeper offered h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit-in-reply, no attempt has been made to discharge this burden which was essentially on the department. In the affidavit-in reply of the Assistant Collector there is his ipse dixit that the use of the shaving cream is the same as that of shaving soap and that petitioner's creams are treated and considered as shaving soaps by consumers and in the trade. All this is untenable. What Item 15 postulates is that the article must be known commercially as "soap" and not "shaving soap". The contention in the affidavit-in-reply that shopkeepers who sell shaving soaps also sell shaving creams, cannot by any stretch of imagination be construed as holding that thereby the petitioner's shaving cream or shampoo is known commercially as "soap". A shopkeeper may sell many things in addition to soaps and if the logic of the Assistant Collector of Central Excise as disclosed by him in his affidavit-in-reply is to be accepted, the result would be illogical to the point of being ridiculous inasmuch as on that logic any cleanser sold by the shopkeeper can qualify as "soap" and yet not be so known commercially to satisfy the requirement of Item 15. 17. Thus, Mr. Setalvad is correct when he says ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d soap the petitioner cannot be said to have undertaken a manufacturing process inasmuch as by these additions what resulted was mere]y a change in the original substance, viz. Liquid soap without detracting from its basic and essential quality. In Union of India v. Delhi Cloth and General Mills Co. Ltd. A.I.R. 1963 SC 791=1977 E.L.T. (J 177) the word `manufacture' has been defined as under :- "The word 'manufacture' used as a verb is generally understood to mean as bringing into existence a new substance and does not mean merely 'to produce some changes in a substance', however minor in consequence the change may be." In that case the Supreme Court quoted with approval a passage from Permanent Edition of Words and Phrases, Vol. 26, which runs as under :- "`Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use." 21. This concept was reiterated by the Supreme Court in South Bihar Sugar Mills Ltd. v. Tata Chemicals Ltd. A.I.R. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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