2009 (6) TMI 556 - AT - Central Excise

Classification- The dispute relates to the classification of the product manufactured by the respondent, while the respondent classified the same under sub-heading 3305.10, the department wants to classify the same under sub-heading 3305.99 under Central Excise Tariff Act, 1985. The product manufactured by the respondent is known as Johnson s Baby Hair Oil. The Commissioner (Appeals) by order set aside the order passed by the original authority and accepted the contention of the assessee/respondent and classified the product under sub-heading 3305.10. Similar view has been taken in another appeal decided on 29-8-2002. Both these separate orders are under challenge in these appeals by the Department. Held that- there has been no dispute by the Department regarding the classification of the product under sub heading 3305.10 and has been classified on regularly. For the reason stated above, in our considered opinion, there is no case made out for interference with the impugned order. Accordingly, the appeals are dismissed.

Summary

Issues:
Classification of the product under sub-heading 3305.10 or 3305.99 of the Central Excise Tariff Act, 1985.

Analysis:
The dispute in this case revolves around the classification of a product known as Johnson's Baby Hair Oil. The respondent classified the product under sub-heading 3305.10, while the department sought to classify it under sub-heading 3305.99. The Deputy Commissioner initially classified the product under 3305.99, but the Commissioner (Appeals) set aside this decision and classified it under 3305.10. The department challenged these decisions in separate appeals. The learned DR argued that the product should be classified under 3305.99 based on certain features, while the learned Advocate for the respondent relied on previous court decisions to support the classification under 3305.10.

The key argument put forth by the learned DR was that the product, being a non-greasy hair oil enriched with Pro-Vitamin B5, should be classified under 3305.99 as it is not a perfumed hair oil. However, the learned Advocate for the respondent contended that previous court decisions supported the classification under 3305.10. The Advocate also presented a test report and affidavits to demonstrate that the product is indeed a perfumed hair oil, as perceived by common consumers.

Upon reviewing the impugned orders, it was found that the authorities had not adequately investigated how the product was perceived by consumers in the market. The certificates and affidavits submitted by the respondent indicated that the product was commonly understood as perfumed hair oil. The Apex Court's stance on consumer perception being crucial for classification was highlighted, emphasizing that the common parlance test is essential. The absence of evidence from the department, despite affidavits submitted by the respondent, weakened the department's argument for classification under 3305.99.

The decision of the Apex Court in Novopan India Ltd. was noted to be unrelated to classification, and the relevance of various court decisions in similar cases was discussed. Ultimately, it was concluded that the impugned order should not be interfered with, and the appeals were dismissed. The consistent classification of the product under sub-heading 3305.10 further supported this decision.

In conclusion, the judgment emphasized the importance of consumer perception in product classification, the need for proper investigation, and the significance of past court decisions in similar cases. The dismissal of the appeals was based on the lack of substantial evidence supporting the department's argument for reclassification under sub-heading 3305.99.