1993 (4) TMI 169 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Kum Kum pencils under the Central Excise Tariff.
2. Eligibility of Kum Kum pencils for exemption under Notification No. 323/86 dated 22-5-1986.

Detailed Analysis:

1. Classification of Kum Kum pencils under the Central Excise Tariff:
The primary issue was whether Kum Kum pencils should be classified under Heading 3307.90 as held by the Collector (Appeals) or under Heading 3304.00 as claimed by the Revenue. The Assistant Collector initially classified Kum Kum pencils under Heading 3304.00, equating them with eyebrow pencils due to their identical composition. However, the Collector (Appeals) held that Kum Kum pencils and eyebrow pencils were different products based on their composition and use, classifying Kum Kum pencils under Heading 3307.90.

The Tribunal examined the reliance of the Collector (Appeals) on the Bombay High Court judgment in the case of Commissioner of Sales Tax, Maharashtra State, Bombay v. La-Bela Products. The Tribunal agreed with the learned JDR that the judgment concerning the interpretation of entries in the Bombay Sales Tax Act could not be applied to determine the classification under the Central Excises and Salt Act, 1944. However, the Tribunal found the High Court's observations regarding the scope of the word 'Kum Kum' useful. The High Court noted that Kum Kum, including items like 'tikuli' and 'bindi,' has been traditionally used by Hindu women for proper grooming and as a symbol of good fortune, not as beauty or makeup preparations. Therefore, the Tribunal concluded that Kum Kum pencils should be classified under the residuary Heading 3307.90, covering 'Cosmetics and Toilet Preparations - not elsewhere specified or included.'

2. Eligibility of Kum Kum pencils for exemption under Notification No. 323/86 dated 22-5-1986:
The second issue was whether Kum Kum pencils could be deemed as covered by the exemption Notification No. 323/86 dated 22-5-1986. The Notification exempts 'Kum Kum' falling under Heading 3307.00 from excise duty. The Tribunal noted that in a taxing statute, there can be no room for any intendment, and words must be construed as understood in common parlance. The Tribunal held that 'Kum Kum' in the Notification referred to products commonly known as 'Kum Kum,' such as colored powder, liquid, and circular stickers, which have been traditionally used by Hindu women. Despite being named 'Kum Kum pencil,' the product in dispute was not commonly known or traded as 'Kum Kum.' Therefore, Kum Kum pencils could not be deemed eligible for exemption under the Notification.

The Tribunal also addressed the appellants' reliance on the Supreme Court judgment in Jain Engineering Co. v. Collector of Customs, Bombay, which held that parts of internal combustion engines were covered by an exemption Notification for internal combustion engines. The Tribunal found this decision inapplicable, as Kum Kum pencils, though classifiable under Heading 3307.90, could not be deemed 'Kum Kum' under the Notification.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, ruling that Kum Kum pencils were not eligible for exemption under Notification No. 323/86 dated 22-5-1986.