TMI Blog2006 (9) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture and marketing of the goods "Auto Janitor" and "Auto Sanitizer" (hereinafter referred to individually as "the item") under brand names which are the proprietary brand names of the applicant. Both the items consist of a dispenser and filler. The filler is filled with "odoriferous substances", which is installed inside the dispenser. The dispenser is attached with the water pipe which is connected to toilet bowl. The items dispense a continuous dose of the powerful concentrated chemical formulation into water, which is released to the toilet bowl, thus cleaning the ceramic surfaces exposed to flushing. This ensures that the washroom is clean and smells pleasant at all times. The filler is required to be replaced from time to time when the dispensable quantity of the liquid is exhausted. 3. The applicant has supplied the following functional details in their application:- (a) Auto Sanitizer - Automatic Hygiene System The Auto Sanitizer provides an automatic and continuous touch-free hygiene maintenance programme for toilets and urinals, 24-hours a day. It is automatic system for maintaining clean washrooms. The features of this item are : • ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia, alcohol from the purview of this Chapter. For the purpose of this Note, 'alcohol' has the meaning assigned to it in Section 2 of the MTP Act. (ii) Levy is also not sustainable under the provision of the MTP Act in view of its Objects Clause, definition of the term 'toilet preparation' given in the MTP Act and the earlier Ruling of this Authority in the applicant's case itself on the question of classification of Room freshener. For the detailed reasons given therein, it has been held by the Authority that something which is not covered under the medicinal or toilet preparation will not be covered by the provision of MTP Act, even if it contains alcohol (Re : Ruling No. AAR/ 10(CE)/ 2005) [2005 (189) E.L.T. 15 (AAR)]. The items under consideration in the present application are not medicinal or toilet preparation as defined in the MTP Act and hence will not fall within its purview notwithstanding the fact that they contain alcohol. (iii) The items in question are primarily used for cleaning of toilet and urinal surface. During this process, it cleans the stains, kills the germs and bacteria present in the bowl and also releases continuous fragrance in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oilet was more then the Auto Sanitizer would be the right item; otherwise, it was the Auto Janitor which would be normally used. Referring to the technical write up of the two items attached to the application it was pointed out that they were marketed also as a cleaning preparation. Since soap is not the basis of these two products, the appropriate classification would be under Tariff sub-heading 3402 90 42. The Ld. Jt. CDR speaking on behalf of the Commissioner asserted that the products would appropriately fall under the MTP Act and not under the Central Excise Tariff Act. The Authority directed the applicant to submit the details of the constituents of the two products so that the exact nature and identity of the chemical formulation of the liquid could be clearly ascertained and understood for deciding their proper classification. 8. The applicant, in compliance with the above direction, submitted the details of the ingredients for three products instead of two as earlier mentioned. These are (i) Auto Janitor Refill (ii) Auto Janitor "Bio" (Refill) and (iii) Auto Sanitizer. In the covering letter they reiterated that the products were used as "cleaning preparation" and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope of the definition of 'Toilet preparation' given therein and the Notes 1(d), 3 4 of Chapter 33 of the Act, we came to the conclusion in that case that the products were not 'Toilet preparation' as defined in the MTP Act. We had expressed our view in clear terms that the effect of Note 1(d) would be that if a preparation in the nature of perfumery, cosmetics and toilet preparation falls within the meaning of the MTP Act and contains alcohol or opium or Indian hemp and other narcotics, it would get excluded from the purview of Chapter 33. We further went on to explain that it, however, does not follow that a preparation of the description of perfumery, cosmetics and toilet preparation containing alcohol etc. but not covered by the MTP Act would also get excluded from Chapter 33 for the sole reason that it contains alcohol. We had also gone through the same two decisions of the Hon'ble Supreme Court now being again cited by the Commissioner and found that neither of them supported him. In Baidyanath's case the preparations which were the subject matter of dispute, were undoubtedly medicinal preparations. It was held that in order to attract duty under the MTP Act, all that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring or after their manufacture (including purification) are excluded from this Chapter". Having regard to the above explanation, the type of compounds covered in Chapter 29 and the details of the chemical formulations of the two products which are apparently a combination of surfactants, disinfectant, solvents, deodorizing chemicals, dilutant (water) etc. cannot be justifiably treated as falling under the category "separate chemically defined compound". That being so, Chapter Note 1(b) has no application to the products in question. Incidentally, as per the Chapter Note 9 of Chapter 29, products containing alcohol, opium, Indian hemp or other narcotic drugs (as defined in MTP Act) are excluded from this Chapter. The products under consideration do contain ethyl alcohol as disclosed by the applicant and hence they would in any case be outside the purview of Chapter 29. So, we are unable to agree with this contention of the Commissioner. 13. The moot points for consideration for the purpose of classification are - (i) Are the two products 'cleaning preparations'? (ii) If they are 'cleaning preparations', are they having basis of soap or other organic surface-act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore gets focused as to which of the three components gives the product its essential character. Simply stated, this would mean whether the products can be taken to have the essential character of a 'cleaning preparation' or 'disinfectant' or 'deodoriser'. Though the term "cleaning preparation" has been used in Chapter 34 of the Act, it has not been defined therein. The HSN Explanatory Notes also do not define it but mention that "cleaning preparations serve for cleaning floors, windows or other surfaces. They may also contain some odoriferous substances." We would therefore like to examine the aspect of essential constituent/character primarily on the basis of (a) information supplied by the applicant on the ingredients and their respective function including their percentage content in the products and (b) the expression "cleaning preparations" being words of everyday use and not technical expression, its meaning as understood in common parlance or in the commercial world or trade circles. 15. Taking up (a) first, we find that the details have been furnished in respect of three products, namely, (i) Auto Janitor, 600 ml (582 g) Refill (ii) Auto-Janitor "Bio" 600 ml (594 g) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia as a solvent for oil, resins, fat etc. As regards the other two ingredients which are claimed to be 'solvent and defafter', one of them has been indicated by the applicant as a trade mark name. On checking up this trade mark name in Hawley's Condensed Chemical Dictionary, Fourteenth Edition, it is found that its uses are indicated as "Solvents, intermediates for plasticizers, bactericidal agents, and fixatives for soap and perfumes". The other ingredient is also found to have use inter alia as "solvent for fats, oils, waxes, resins". Thus, for these two ingredients as well, the main use as a solvent is apparent, though one of the two is indicated as 'bactericidal agent' also. This, therefore, brings us to the two components which are described as "surfactant cleaner" and "disinfectant" respectively. The word 'surfactant' is a contraction of "surface active agent". The expression 'organic surface active agent' appears in chapter 34 of the Act. As per Chapter Note 3 thereunder, "for the purpose of heading 3402, "organic surface-active agents" are products which when mixed with water at a concentration of 0.5% at 20°C and left to stand for one hour at the same temperature : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soil contains both organic and inorganic components. Proper identification is critical. Most combination soils are removed with a very concentrated, highly built cleaner that also contains solvent." "Surfactants A surfactant is the most important part of any cleaning agent. The word surfactant is short for "Surface Active Agent". In general they are chemicals that, when dissolved in water or another solvent, orient themselves at the interface (boundary) between the liquid and a solid (the dirt we are removing), and modify the properties of the interface. How does a surfactant work? All have a common molecular similarity. One end of the molecule has a long nonpolar chain that is attracted to oil, grease, and dirt (the hydrophobe). Another part of the molecule is attracted to water (the hydrophile)..... The hydrophobic end of the molecule gets away from the water and the hydrophilic end stays next to the water. When dirt or grease is present (hydrophobic in nature) the surfactants surround it until it is dislodged from the boundary......" "Chelating Agents Soil removal is a complex process that is much more involved than just adding soap or surfactant to water. One of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... active ingredient that actually adds to the detergency of cleaners. It performs several very important functions in liquid cleaners. Most importantly, it adds to the "detergency" of a cleaner. Water acts as a solvent that breaks up soil particles after the surfactants reduce the surface tension and allow the water to penetrate soil.......... Water also aids in the suspension and anti-redeposition of soils. Once the soil has been dissolved and emulsified away from the surface, we want to prevent it from being redeposited. Water keeps the soil suspended away from the clean surface so that it can be carried away easily during the rinsing process..... In addition to water, other chemical solvents are often added to cleaners to boost performance. Compounds such as 2-Butoxyethanol (butyl), isopropyl alcohol (rubbing alcohol) and d-Limonene are all considered solvents. Their main function is to liquefy grease and oils or dissolve solid soil into very small particles so surfactants can more readily perform their function." "Preservatives A preservative is nothing more than a substance that protects soaps and detergents against the natural effects of aging such as decay, discolorat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Section/Chapter/Explanatory Notes, the General Rules for Interpretation of the Tariff Schedule, the technical/scientific information and the like. Therefore, the fact that a 'disinfectant' containing ethyl alcohol would go out of Chapter 38 of the Act, cannot and should not preclude us from ascertaining whether the product in question is a 'disinfectant' or not. If it indeed turns out to be so, then one has to consider the issue of classification for such types of disinfectant which contain ethyl alcohol. 18. The word 'disinfectant' is defined in Mcgraw-Hill Dictionary of Scientific and Technical Terms, Fifth Edition, as 'A chemical agent that destroys micro organisms but not bacterial spores". Hawley's Condensed Chemical Dictionary, 14th Edition, gives the following note on 'disinfectant' - "A substance used on inanimate objects that destroy harmful microorganisms or inhibit their activity. Disinfectants are either complete or incomplete. Complete disinfectants destroy spores as well as vegetative forms of microorganisms; incomplete disinfectants destroy vegetative forms of the organism, but do not injure spores. Some representative disinfectants are (1) mercury compounds (me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant point to note is the relative role and function of the cleaning process vis-a-vis the disinfecting processes. Cleaning the surface is a prerequisite for disinfectant action to be effective. So, in the one-step disinfectant-cleaner, the cleaning action has an important role to play in removing the visible dirt so the disinfectant can get to work. 19. The thrust put by the applicant on the primary function of cleaning gets support from the brochure for the product Auto Janitor, when it says "The unique 'three in one' Auto Janitor offers improved automatic cleaning and deodorizing for toilets and urinals with simple programming and flexible dispensing options". This is the perception which they would like any intending customer of the product to have about its use and function. The perception is primarily that of a 'cleaner' which would, in the process of cleaning, perform two other functions as well, - disinfectant and deodorizer. It would be relevant in this context to see how generally such combined products are sold and marketed in the course of normal trade and business by those dealing with them. The information downloaded by us from the Internet in respect of var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imarily a cleaning preparation. 20. Regarding the second product, namely, 'Auto Janitor "Bio" Refill', we find from the details furnished by the applicant, that active ingredients are by and large the same as those of 'Auto Janitor Refill'. There is one component 'Bio F/S' in the "Bio" Refill whose usage/function is indicated as 'Bacterial slurry, which according to the applicant is "a liquid mixture that contains good bacteria which attacks the source of the odour in a urinal by breaking down the uric acid scale deposits in the urinal. The bacteria used in the slurry is in the nature of a weight digesting bacteria". So, effectively, the position is virtually the same as that of 'Auto Janitor Refill' discussed above. 21. In so far as the third product (i.e., Auto Sanitizer) is concerned, the applicant's brochure states that "Neutralle Auto Sanitizer system provides the most effective automatic hygiene system that maintains clean, sanitized and odour-free toilets and urinals 24 hours a day ..... The Auto Sanitizer is an automatic cleaning and hygiene system that keeps toilets and urinals clean and germ-free 24 hours a day". Generally speaking, an Auto Sanitizer is reported to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts fall within its purview or not. This Chapter deals with : "Soap, Organic Surface-Active Agents, Washing Preparations, Lubricating Preparations, Artificial Waxes, Prepared Waxes, Polishing or Scouring Preparations, Candles and similar Articles, Modelling Pastes, "Dental Waxes" and Dental Preparations with a basis of Plaster". We observe that the applicant's submission is that the products are "cleaning preparations" and would appropriately be classifiable under the Tariff Item 3402 which covers : "Organic surface active agents (other than soap), surface-active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of heading 3401". It is apparent from the above description that all cleaning preparations other than those of Heading 3401 would be classifiable under the Tariff Item 3402 irrespective of whether or not they contain soap. For the sake of convenience, it is necessary to refer to the description of goods covered by Tariff Item 3401 which reads as : "Soap; organic surface-active products and preparations for use as soap, in the form of bars, cakes, moulded pieces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t soaps". 'Disinfectants' are covered by Tariff Heading 38.08 whereas 'soaps' fall under Tariff Heading 34.01. As per the HSN Explanatory Notes to Tariff Heading 38.08, one of the specified group of items which are excluded from the purview of the Heading 38.08 is - (a) …………………………………………………………….. (b) Preparations covered by more specific headings of the Nomenclature, or having subsidiary disinfecting, insecticidal etc., properties, for example : (i) …………………………………………….. (ii) Disinfectant soaps (heading 34.01) (iii) …………………………………………….. (c) …………………………………………….. (d) …………………………………………….. We note from the above that the words "heading 34.01" appear after "Disinfectant soaps", indicating that they are to be classified in heading 34.01. Heading No. 34.01 refers to 'soaps', but it does not refer specifically to 'disinfectant soaps'. In our view, the products before us which are in effect disinfectant cleaner should be treated similarly to the example of the disinfectant soap for classification purposes. Though these products have disinfecting qualities, as does the disinfectant soap, we are of the view that they should be classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning or degreasing preparations not having a basis of soap or other organic surface active agents. 3402 90 49 ---- Other --- …………………………………………….. What we notice is that the Tariff sub-heading 3402 90 covers goods which are other than, inter alia , the preparations put up for retail sale. This is supported by the fact that Tariff Heading 3402 20 which is for 'preparations put up for retail sale' has three Tariff Items under it namely 3402 20 10, 3402 20 20 and 3402 20 90 - the last one being 'other' which means, other than those covered by 3402 20 10 and 3402 20 20. So, all the types of goods covered by 3402 20 are exhaustively covered by these three Tariff Items. The next sub-heading 3402 90 (-- other ), therefore, stands for those which are other than (i) 'organic surface-active agents, whether or not put up for retail sale' as well as (ii) 'preparations put up for retail sale'. The applicant's products would not fall under this sub-heading as they are preparations to be put up for retail sale. The question of their falling under any Tariff Item under 3402 90 would not, therefore, arise. Classi ..... 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