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TMI Blog1993 (2) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... ared under the brand name of Red Rose Henna Powder/Henna Powder and Rose Herbal Shikakai Powder. The Department found that on the basis of the material available that the goods were correctly classifiable under sub-heading 3305.90 CETA, 1985 which covers preparation for use on the hair , at a higher rate of duty. Demand of differential duty of Rs. 72,126.65 was also raised besides proposal for imposing penalty on the appellants herein. By the order dated 10-10-1991, the Assistant Collector of Central Excise, Division-1 Faridabad confirmed the demand and imposed a penalty of Rs. 2,500 on the appellants. The Assistant Collector found that it was only after the literature of the product were examined by the Department which was not submitted at the time of approval of classification list that the Department has proposed to change the classification of the product to Heading 3305.90. The Assistant Collector for the purposes of the change in the classification relied upon the Chapter Note 2 and Chapter Note 4 to Chapter 33 CETA and he came to the conclusion that it is clear from these chapter notes that any preparation which is suitable for use on the hair when put up in packings with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Retha, Shikakai, Henna, Sandal, Turmeric, Rose, Coffee, Katha, etc. obtained in powder form in fixed ratio then packed in unit containers. It was pleaded that all the ingredients in this case are taken in powder form and mixed together manually, therefore, no process of manufacture was involved. The product is a pure Herbal compound. It was also submitted that the duty demanded includes Henna Powder in gunny bags other than in unit packings under Heading 33.05 without giving justification therefor. Regarding classification of Henna powder under Heading 3305, the learned Counsel submitted that as per Note 6 of Chapter 33, the Heading 33.05 applied inter alia to the products namely; Brilliantines, perfumed hair oils, hair lotions, Pomades and creams, hair dyes (in whatever form), shampoos, whether or not containing soap or organic surface active agents. The learned Counsel argued that the products mentioned therein are all exclusively prepared for use on the hair. In this context he referred to The New Lexicon Webster s Dictionary of the English Language, Volume 2 Edition: 1988 which gave the meaning Brilliantine as a cosmetic hair dressing used mainly by men. Similarly, Pomades mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch material of raw-vegetable material covered by the heading. On the reasoning adopted by the Collector (Appeals) to hold that there was a process of manufacture involved in the preparation of Henna powder, the learned Counsel relied upon the following case law : 1. 1988 (38) E.L.T. 171 (Tribunal) Collector of Central Excise v. Mahavir Minerals Store Supply Co. 2. 1990 (49) E.L.T. 544 (Tribunal) Collector of Central Excise v. Maize Products Limited 3. 1991 (54) E.L.T. 414 (Tribunal) S.A.I.L. v. Collector of Central Excise and it was argued that in preparing the Henna powder from henna leaves by grinding them after removal of foreign material from the leaves, the essential character of the powder remains the same as that of the leaves which is the starting material. In such circumstances, in the absence of any change in the essential character of the materials and also since the use is also the same, no manufacturing process can be said to have taken place making the goods liable to duty. Similarly, in the case of the other products, namely, Shikakai powder, it was urged, mere mixing of the various powders manually does not result in the .emergence a new product and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Chief Departmental Representative also produced as an example a product marketed under the brand name AYUR which is an instant bleach manufactured under Cosmetic Act Licence as being similar to Henna, which product is also said to bleach the hair and also makes the skin fair. This would show that the coverage of Heading 33.05 can extend to such products. The learned Chief Departmental Representative also urged that the process adopted by the appellants to manufacture Henna powder from Henna leaves is a process of manufacture because only at the end of those processes it is possible to make Henna marketable to the consumer. The Henna can also not be considered as an Ayurvedic medicaments as it is not made under an Ayurvedic licence nor is commercially known as such. In this context, the learned Chief Departmental Representative cited the case law reported in STC (47) 1981 = 1993 (67) E.L.T. 34 (S.C.) - Chowgule Co. Pvt. Ltd. and Another v. Union of India and Others to say that any process of commodity as preparation for making it marketable would amount to manufacturing processes. The learned Chief Departmental Representative also relied upon the case reported in STC ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans of pulverised/grinding by grinding the leaves into powder. The powder is then mixed thoroughly and then it is packed into unit packings for retail sale as well as gunny bags. In respect of Rose Herbal Shikakai powder which is the other product under consideration, this was produced by mixing powdered Mehandi leaves, Amla, Retha, Shikakai, Keshia, Sandal, Turmeric, Rose, Coffee, Katha, etc. in a fixed ratio and then packed in unit containers as well as gunny bags. The appellants say that the process of making Henna powder and Shikakai powder is only manual and in the case of Henna powder that it is not different in essential character from the leaves from which it is made, and that further in the case of Shikakai powder, there is only a mixing of the various powders which makes it a herbal compound and, therefore, here also no manufacturing process is involved. These submissions have been examined in the light of the decision of the Supreme Court in the case of Empire Industries Ltd. Others v. Union of India Others reported in 1985 (20) E.L.T. 179 (S.C.) which is a decision laying down the principles to be adopted to determine what would constitute manufacture for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dal etc. which go into its making and hence is an excisable commodity. 6. In respect of classification, the Department holds that product is classifiable under heading 33.05 which reads as Preparation for use on the hair . Chapter Notes 2 and 4 have also been invoked which are as follows :- Chapter Note 2 - Heading Nos. 33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings with labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialised to such use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value. Chapter Note 4 - In relation to products of Heading Nos. 33.03,33.04 and 33.05, conversion of powder into tablets, labelling or relabelling of containers intended for consumers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the products marketable to the consumer, shall be construed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hair. Brilliantine is a cosmetic hair dressing, so also Pomade is a scented ointment for the hair, and the shampoo is usually a liquid or powder preparation for washing the hair. HSN Explanatory Notes under Heading 33.05 also say that preparations applied to hair on parts of the human body other than scalp are excluded, whereas under the HSN Explanatory Note under Heading 14.04 covering vegetable products not elsewhere specified or included, it is stated under a raw vegetable materials of a kind used primarily in dyeing or tanning that such materials may be untreated, dried, ground or powdered and the more important are inter alia given at Serial No. (6) as Stems, Stalks, leaves and flowers: steins, stalks and leaves of woad, sumach, young fustic , holly, myrtle, sunflower, henna, reseda, indigo plant: leaves of lentiscus (mastic); flowers of safflower (bastard saffron) and dyer s greenwood (Genistra tinctoria; woadwaxen). In the Book titled Textiles Fiber to Fabric - Sixth Edition to Bernard P. Corbman at Page 202 under heading Natural Dyes, Henna is mentioned as one of the principal vegetable dyes. In these circumstances, there is sufficient material to hold that Henna powder ..... X X X X Extracts X X X X X X X X Extracts X X X X
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