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TMI Blog1995 (11) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ector for an amount of Rs. 12,56,447-61 for the period 14-6-1976 to 26-8-1985 claiming that they had paid duty under protest. A show cause notice dated 26-9-1986 was issued by the Assistant Collector proposing to classify the product namely, Kesvardhini Concentrate under Tariff Item 14F(II) during the period 17-3-1985 to 27-2-1986 and under sub-heading 3305.90 from 28-2-1986 onwards. He also proposed in the said show cause notice to demand differential duty based on the rate of duty at 105% ad valorem and thus finalised the classification list filed after 17-3-1985. Another show cause notice dated 20-2-1986 was also issued by the Assistant Collector wherein he proposed rejection of the refund claim filed by the party for Rs. 12,56,447.61 on their product i.e. Kesvardhini Concentrate on the grounds that it was classifiable under Tariff Item 14F(II) and under Tariff Item 68. Thereafter, the Assistant Collector passed an order dated 2-9-1987 upholding the said product as classifible under Tariff Item 14F(II) w.e.f. 17-3-1985 till 27-2-1986 and demanded duty on 52.5% ad valorem (50% of 105% as applicable to the SSI unit). He also classified the product under sub-heading 3305.90 after 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 3305.90 from 28-2-1986 onwards (b) demand the differential duty on the clearances effected during the said period at 52.5% ad valorem (c) finalised the classification list filed after 17-3-1985. Thereafter the Assistant Collector passed the order dated 2-9-1987 holding the product Kesvardhini Concentrate as classifiable under Tariff Item 14F(II) during the period 17-3-1985 to 27-2-1986 and under sub-heading 3305.90 from 28-2-1986 onwards. He also demanded duty on 52.5% ad valorem w.e.f. 17-3-1985. Being aggrieved by this order the respondents filed an appeal before the Collector (Appeals), Madras who adopted the same order passed in order-in-appeal No. 36/88(M), dated 15-2-1988. Against this order-in-appeal the present appeal has been filed by the department praying for restoration of the demand of duty for the period 17-3-1985 to 27-2-1986. 3. On behalf of the appellants Shri A.K. Madan, learned SDR submitted that the disputed product namely, Kesvardhini Concentrate was to be treated as Hair Oil even though it is marketed in concentrated form and requires dilution with other vegetable oil before being applied to the hairs. He submitted that the classification of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1985 and 5-9-1985 informing their intention to avail the exemption under Tariff Item 68 for the product manufactured by them and even then there was indication by the department that the assessment were to be provisional and hence the respondents availed complete exemption from payment of duty under Tariff Item 68. He reiterated his stand that there was no provisional assessment during the period 17-3-1985 to 28-2-1986. 5. In regard to the case of Kesvardhini Products (Madras), Madras in Appeal No. E/1932/88-C the learned counsel submitted that here also the respondents reiterated that Kesvardhini Product manufactured by them is classifiable only under Tariff Item 68 and not under Item 14F(II) in view of the various submissions made in the case of Kesvardhini Products, Madras. He added that even if the Tribunal is inclined to apply the decision of Veto Company classifying the Hair Oil Concentrate in question under Item 14F(II) duty would be demandable only on 10% ad valorem and not 52.5% ad valorem. He added that duty had been paid by the respondents only at 10% ad valorem during the per- iod March, 1985 and July to September, 1985 and exemption had been availed by them during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt.) Ltd. v. Collr. of C. Ex. 1986 (25) E.L.T. 473 (SC) = (1986) 3 SCC 480 and Indian Aluminium Cables Ltd. v. U.O.I. 1985 (21) E.L.T. 3 (SC) = (1985) 3 SCC 284. In M/s. Asian Paints India Ltd. v. Collr. of C. Ex. - 1988 (35) E.L.T. 3 (SC) = (1988) 2 SCC 470, which was a case of Emulsion Paint, at para 8 it was said : `It is well settled thal the commercial meaning has to be given to the expression in Tariff items. Where definition of a word has not been given, it must be construed in its popular sense. Popular sense means that sense which people conversant wilh the subjecl matter with which the statute is dealing, would attribute lo it . CIT v. M/s. Taj Mahal Hotel 1972 (1) SCR 168 = (1971) 3 SCC 550 was applied." 7. We find from the case records that prior to 17-3-1985 for a number of years the disputed product was being assessed as a perfumed hair oil on the basis of approved classification lists in which the appellants had themselves been declaring the item as perfumed hair oil . The permanent S.S.I. Certificate of registration issued by the Department of Industries and Commerce, Madras also shows that from 1977 onwards the appellants have been registered for the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... salts and minerals which also occur in these botanicals Essential oils arc used as such for flavours and fragrances, but products derived from, or based on essential oils have large volume usage for specific applications. Essential oils are concentrated, rectified, extracted or chemically treated to further isolate vital components, purify adjust properties or increase the concentration of significant flavour or fragrance components. It is evident that the essential oils such as Citronella Oil and Lemon grass oil were deliberately added to the appellants product to impart perfume. For this reason and also in view of the fact that the appellants had themselves claimed in the literature which they were supplying along with the product that it was perfumed, their contention that the goods in question could not be deemed as `perfumed hair oil has to be rejected. 8A. In view of the above discussion we hold that even prior to 17-3-1985 when Explanation III was added to Item 14F of the Central Excise Tariff, the disputed product for the purposes of classification had to be treated as `perfumed hair oil and was therefore classifiable under Tariff Item 14F(ii)(b). On the ratio ..... 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