2008 (6) TMI 582 - AT - Central Excise

Summary

Issues Involved:
1. Classification of coconut oil sold in various packages.
2. Applicability of Chapter Note 2 of Chapter 33 post-amendment.
3. Interpretation of relevant tariff entries and HSN alignment.
4. Validity of the Commissioner's findings and the application of interpretative rules.

Summary:

1. Classification of Coconut Oil:
The primary issue is the classification of coconut oil sold by M/s. Madhan Agro Industries (India) Pvt Ltd (MAIL). Initially classified under CSH 15.03 as coconut oil, the Commissioner revised it to CSH 3305 as unperfumed hair oil. The appeal challenges this revision.

2. Applicability of Chapter Note 2 of Chapter 33 Post-Amendment:
Effective from 01.03.2005, Chapter Note 2 of Chapter 33 was amended, deleting the segment that included products labeled for use as cosmetics or toilet preparations. The Commissioner found that the impugned goods, advertised with a picture of an actress, suggested their use as hair oil, not cooking oil. This led to the reclassification under CSH 33059011.

3. Interpretation of Relevant Tariff Entries and HSN Alignment:
The learned Sr. Counsel argued that the alignment of tariff entries with HSN post-01.03.05 supported the continued classification of the product as coconut oil under Chapter 15. The CBEC Circular No.145/56/95-CX dated 1.8.95 and previous CESTAT decisions supported this classification. The Tribunal found that the impugned product did not satisfy the HSN Explanatory Notes for classification under CSH 3305.

4. Validity of the Commissioner's Findings and the Application of Interpretative Rules:
The Tribunal noted that the impugned product did not meet the criteria for classification under Chapter 33, as it was not labeled or packed in a form specialized for use as hair oil. The Tribunal's previous decisions and the CBEC Circular were consistent with classifying the product under Chapter 15. The impugned order was found inconsistent with the Tribunal's reading of the tariff entries and HSN Notes.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, maintaining the classification of the product under Chapter 15. The decision was pronounced in open court.