2001 (10) TMI 146 - AT - Central Excise

Summary

Issues Involved:

1. Whether the process of repacking coconut oil into small containers amounts to manufacture.
2. Whether such repacked coconut oil is classifiable under Sub-heading 3305.99 of the Central Excise Tariff Act (C.E.T.A.).

Summary:

1. Repacking as Manufacture:

The primary issue is whether repacking coconut oil from bulk into small containers constitutes "manufacture." The appellants argued that repacking does not change the nature, character, or use of the coconut oil, which remains a fixed vegetable oil under Heading 15.03 of CETA. They contended that there is no Chapter Note in Chapter 15 construing repacking as manufacture. The Tribunal agreed, stating, "merely by repacking the coconut oil from bulk into small packs, no new product having a different name, use or character emerges and as such no manufacture takes place."

2. Classification under Sub-heading 3305.99:

The second issue is whether repacked coconut oil falls under Sub-heading 3305.99 as "preparations for use on the hair." The appellants argued that the product remains a fixed vegetable oil and does not meet the criteria of Note 2 and Note 4 to Chapter 33, which require labels, literature, or indications that the product is for use as cosmetics or toilet preparations. The Tribunal noted, "It is not the case of Department that the coconut oil is not fixed vegetable oil falling under Heading 15.03. Further, there is no labels, literature or indications on the packings that the product is for use as cosmetics or toilet preparations."

The Tribunal also referenced Board's Circular No. 145/56/95-CX., dated 31-8-95, which clarified that coconut oil packed in small containers remains classified under Heading 15.03 unless it bears labels or undergoes processes indicating it is for use on hair. The Tribunal concluded, "the impugned product cannot be classified under Heading 3305.90 of CETA."

Conclusion:

The Tribunal set aside the impugned Order, stating that repacking coconut oil into small containers does not amount to manufacture and that the product remains classified under Heading 15.03. The appeals were allowed without addressing the issue of time limitation.