1992 (7) TMI 190 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product 'Rita'
2. Refund claim for differential duty
3. Applicability of Tariff Item 14F(ii)(b) prior to 17-3-1985
4. Time-barred refund claim

Issue-wise Detailed Analysis:

1. Classification of the product 'Rita':
The appellants argued that 'Rita' was not a perfumed hair oil but a concentrate requiring mixing with other oils. They contended it should fall under Tariff Item 68. The Assistant Collector and Collector (Appeals) held it as a perfumed hair oil under Tariff Item 14F(ii)(b). The Tribunal examined the product's classification, noting that the product was marketed and known as a hair oil, supported by various certificates and trade documents. The Tribunal referred to the Supreme Court's principle that goods should be classified according to their popular meaning or commercial sense, not scientific or technical meaning. The Tribunal concluded that 'Rita' was known as a hair oil in the trade and thus classifiable under Tariff Item 14F(ii)(b).

2. Refund claim for differential duty:
The appellants filed a refund claim for the differential duty paid from 23-7-1982 to 22-3-1985, arguing that the product should have been classified under Tariff Item 68. The Assistant Collector rejected the claim partly on the grounds of being time-barred and partly on the classification issue. The Tribunal, having concluded that 'Rita' was correctly classified under Tariff Item 14F(ii)(b), found no basis for the refund claim.

3. Applicability of Tariff Item 14F(ii)(b) prior to 17-3-1985:
The appellants contended that their product became exigible only after the addition of Explanation III to Item 14F on 17-3-1985. The Tribunal reviewed the Tariff Item 14F(ii)(b) and Explanation III, which included unmixed products when sold in consumer packaging with labels indicating they were for use as cosmetics or toilet preparations. The Tribunal determined that even before the addition of Explanation III, 'Rita' was understood and marketed as a hair oil, thus falling under Tariff Item 14F(ii)(b).

4. Time-barred refund claim:
The Assistant Collector rejected part of the refund claim as time-barred. However, the Collector (Appeals) did not address this issue. The Tribunal, having decided that the product was correctly classified under Tariff Item 14F(ii)(b), found it unnecessary to delve into the timeliness of the refund claim.

Conclusion:
The Tribunal upheld the classification of 'Rita' as a perfumed hair oil under Tariff Item 14F(ii)(b) even before 17-3-1985. Consequently, the appeal for reclassification and refund was rejected. The Tribunal emphasized the importance of commercial understanding and trade parlance in determining the classification of goods.