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2004 (10) TMI 215 - AT - Central ExciseClassification of Coconut oil - Penalty - Whether Coconut oil bearing the brand name 'SUKESH' and 'NEW SUKESH' marketed in sachets of 8 ml and pouches of 50 ml, 100 ml and jars of 500 ml, 200 ml and 100 ml can be classified under Chapter Sub-heading 3305.99 of Central Excise Tariff Act, 1985 which covers vegetable fats and oils - HELD THAT - In the present case, the item is merely packed in the sachets and they have not sold with the label with literature and other indications that their products as Cosmetic or Toilet preparations. The Tribunal has also analysed the matter in detail and held that Coconut oil is marketed in retail packs and re-packing from bulk into small packs does not result in a new product having a different name, use or character and also held that it does not result in manufacture. It is also held to continue to remain in Chapter Heading 15.03 so long as it is fixed vegetable oil and does not come under the purview of the Chapter 33 of the Act. In view of the finding recorded in M/s. Kothari Products Ltd. 2001 (10) TMI 146 - CEGAT, COURT NO. III, NEW DELHI , we are of the considered opinion that the ruling of the Tribunal in Kothari Products Ltd. case clearly applies to the facts of the case. Thus, the impugned order is set aside and the appeal is allowed.
Issues involved: Classification of Coconut oil under Central Excise Tariff Act, 1985.
The appeal arose from an Order-in-Original confirming demand u/s 11A(1) of the Central Excise Act, 1944 and imposing penalty, regarding the classification of Coconut oil under Chapter Sub-heading 3305.99. The Department argued for classification under Chapter Sub-heading 3305.10 as Cosmetics or Toilet preparations, while the appellant claimed it to be pure Coconut oil without additives. The Tribunal's judgment in M/s. Kothari Products Ltd. case was cited, but the Commissioner did not apply the Board's Circular or the Tribunal's ruling, leading to the appeal. The main issue was whether Coconut oil branded as 'SUKESH' and 'NEW SUKESH' can be classified under Chapter Sub-heading 3305.99 or as Cosmetics under Chapter Sub-heading 3305.10 of the Central Excise Tariff Act, 1985. The appellant argued that the product retains its Coconut oil characteristics and should not be classified as a Cosmetic or Toilet preparation. The Tribunal analyzed the matter, considering the packaging and labeling requirements for classification under Chapter 33, and concluded that the product does not meet the criteria for classification as a Cosmetic or Toilet preparation, thus supporting the appellant's claim based on the Tribunal's previous ruling. The Board's Circular highlighted the requirements for classifying a product under Chapter 33, emphasizing the need for specific labeling and indications for use as Cosmetics or Toilet preparations. The Tribunal's detailed analysis in the M/s. Kothari Products Ltd. case reaffirmed that repacking Coconut oil into smaller containers does not change its nature or character, and it remains classified under Chapter Heading 15.03 as long as it retains its original properties as a fixed vegetable oil. The absence of specific labeling or literature indicating use as Cosmetics or Toilet preparations further supported the classification of the product as Coconut oil under Chapter 15.03, in line with the Tribunal's findings and the Board's Circular. The Tribunal's decision to set aside the impugned order and allow the appeal was based on the consistent view that the nature and description of a product determine its classification, not advertising or packaging gimmicks. The product in question, being Coconut oil meeting the criteria of fixed vegetable oil under Chapter 15, did not qualify for classification under Chapter 33 as a preparation for use on hair due to the lack of specific labeling or additives indicating such use. The Tribunal's ruling aligned with the Board's Circular and previous judgments, emphasizing the importance of the product's inherent characteristics for classification purposes, ultimately leading to the appeal being allowed based on the established legal principles and interpretations.
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