2008 (3) TMI 188 - AT - Central Excise

Classification of New Creamy Ponds Moisturising Face Wash - test reports given by appellant certified that the impugned product satisfied the definition for Organic Surface Active Agents (OSAA) of Chapter 34 - Following the HSN Explanatory Notes, the impugned product is correctly classifiable under CSH 3402.90 as washing preparation as claimed by the appellants and not under CSH 33.04 as a skin care preparation

Summary

Issues:
Classification of 'New Creamy Ponds Moisturising Face Wash' (NCPMFW) as a skin care preparation under CSH 33.04 of the CETA '85 and consequent demand of differential duty.

Analysis:
The appeal filed by M/s. Hindustan Unilever Ltd. (HUL) challenges the classification of NCPMFW as a skin care preparation under CSH 33.04 of the CETA '85. The lower authorities relied on a test report stating the product did not satisfy the prescription in Chapter Note 3 of Chapter 34 for Organic Surface Active Agents (OSAA). However, HUL obtained test reports from Tamilnadu Government Test Laboratory and Vimta Labs certifying that the product satisfied the definition for OSAA.

The counsel for HUL argued that Note 3 of Chapter 34 CETA '85 defined Organic Surface Active Agent of CSH 3402, and preparations containing OSAA were washing preparations covered by CSH 3402. The product was confirmed to be a surface active preparation under CSH 34.02, composed of surface active agents, polyhydric alcohol, cellulosic substance, perfume, and additives. The product was classified as a wash-off preparation, suitable for cleaning and washing the face or any part of the human body.

The SDR supported the impugned order, citing the importance of test reports and the guidelines contained in HSN for classification. He referred to Chapter 33 of the Central Excise Tariff, listing products like beauty creams and cleansing creams under Heading No. 33.04.

Upon considering the submissions and case records, the Tribunal found that the impugned product was a preparation consisting wholly or partly of OSAA, suitable for applying on the skin and washing off. The product was classified under Chapter 34 as a washing preparation, in line with the HSN Explanatory Notes. The Tribunal set aside the impugned order and allowed the appeal filed by HUL, concluding that the product was correctly classifiable under CSH 3402.90 as a washing preparation, not under CSH 33.04.