1989 (11) TMI 143 - AT - Central Excise

Summary

Issues:
1. Classification of Ayurvedic oils under Central Excise Tariff Act, 1985
2. Demand of duty on Ayurvedic oils by Central Excise authorities
3. Interpretation of 'perfumed hair oils' under Tariff Item 14F(ii) of C.E.T.
4. Validity of show cause notices issued by Central Excise authorities
5. Compliance with classification list approval process
6. Classification of products under C.E.T. 1985 as Ayurvedic medicine

Analysis:
1. The case involved the classification of Ayurvedic oils under the Central Excise Tariff Act, 1985. The appellants manufactured oils using herbal ingredients and added sandalwood oil to preserve aroma. The dispute arose when the Central Excise authorities demanded duty on the oils, claiming they were excisable under Tariff Item 14F(ii) of C.E.T.

2. The Central Excise authorities issued show cause notices demanding duty, alleging the products were excisable hair oils. The Assistant Collector confirmed the demands, leading to the present appeal after the Collector of Central Excise (Appeals) rejected the appellants' appeal.

3. The interpretation of 'perfumed hair oils' under Tariff Item 14F(ii) of C.E.T. was crucial. The authorities argued the products fell under this category, but the appellants contended the oils were Ayurvedic medicines, not perfumed hair oils. Expert opinions and classification lists supported the appellants' claim.

4. The validity of the show cause notices was questioned as they did not specifically allege that the products were 'perfumed' hair oils. The Order-in-Original also lacked a clear finding on this aspect, casting doubt on the basis of the demands made by the authorities.

5. The compliance with the classification list approval process was highlighted. The appellants had obtained approvals classifying the products as Ayurvedic medicines exempt from duty. The Deputy Chief Chemist's opinion and letters from Ayurvedic experts supported this classification.

6. The classification of products under C.E.T. 1985 as Ayurvedic medicine was discussed. The appellants sought classification based on similarities to another product classified as Ayurvedic medicine. However, the classification list was pending approval, making it premature for the Tribunal to express an opinion on the correct classification under C.E.T. 1985.