2002 (12) TMI 107 - AT - Central Excise

Summary

Issues involved:
Classification of products "Cleanzo" and "Cleano" under sub-heading 3401.12 as Soap or under sub-heading 3402.90 as cleaning preparation.

Detailed analysis:
The issue in these appeals was the classification of products "Cleanzo" and "Cleano" under the Central Excise Tariff Act. The Appellants claimed that the products should be classified under sub-heading 3401.12 as Soap, while the Commissioner (Appeals) confirmed the classification under sub-heading 3402.90 as cleaning preparation. The Appellants argued that the products were liquid soap solutions manufactured from vegetable oils like castor oil, acid oil, rosin, and pine oil for antiseptic purposes. They contended that the products met the criteria of true soap as per the HSN Explanatory Note, and therefore should be classified under Heading 3401.12. They emphasized that liquid soaps are solutions of soap in water, without synthetic organic surface active products, and as the products were soluble in water and made from vegetable oils, they satisfied the classification under Heading 3401.12.

The Appellants further argued that the addition of pine oil during the soap manufacturing process did not change the essential nature of the product as soap. They referenced technical books stating that pine oil is used in various industrial applications, including soap manufacturing. They highlighted that the addition of pine oil before obtaining the soap base distinguished their product from cleaning preparations under Heading 3402. The Appellants contested the classification under Heading 34.02, emphasizing that the products were primarily liquid soap solutions and not cleaning preparations. They also challenged the reliance on marketing labels by the Adjudicating Authority, citing legal precedents that labels are used for marketing purposes and should not determine classification.

In response, the Revenue argued that the products were clearly intended for cleaning purposes based on the product labels and directions for use. They contended that the classification should be based on the product description in the tariff or common parlance test, rather than technical definitions. The Revenue emphasized that the products were used for cleaning floors and surfaces, aligning with the description of cleaning preparations under Heading 34.02. They referenced legal precedents supporting the interpretation of classification based on popular meaning rather than technical definitions.

The Tribunal considered both arguments and analyzed the classification under Heading 34.01 for soap and Heading 34.02 for cleaning preparations. They noted that cleaning preparations generally contain essential and subsidiary constituents, with soap being an alkaline salt formed from fatty acids. The Tribunal observed that pine oil, added for antiseptic purposes, qualified as a subsidiary constituent as described in the HSN Explanatory Note. Additionally, as the products were used for cleaning floors and surfaces, they were classified as cleaning preparations under Heading 34.02. The Tribunal rejected the Appellants' argument that the addition of pine oil during the soap manufacturing process did not make the products cleaning preparations. They also dismissed the reliance on external references like Encyclopaedia Britannica and Wealth of Nations for classification, emphasizing the importance of aligning with the Central Excise Tariff's enactment. Ultimately, the Tribunal upheld the classification of the products as cleaning preparations under Heading 34.02 and dismissed the appeals filed by the Appellants.