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TMI Blog2015 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment s stand is based on the Board s Circular No.890/10/09/CX dated 3.6.2009 issued under Section 37 B of the Central Excise Act, 1944 wherein with regard to heading 3305 read with Chapter Note 3 of Chapter 33, as it stood during the period w.e.f. 28.02.2005, it was clarified that the coconut oil packed in containers upto 200 ml. may be considered generally used as hair oil and the same would be classifiable under Heading no.3305 and not under heading 1513. The CBEC in this regard, referred to field survey conducted wherein it had been found that smaller packings upto 200 ml are normally purchased by the customers for use as hair oil. During the period of dispute, in view of the instructions of the department, the appellant cleared the coconut oil packed in the packings of 200 ml or less on payment of duty under heading 3305 of the Tariff. Subsequently, however, refund claim was filed, which was rejected by the Asstt. Commissioner vide order-in-original dated 1.8.2012. The Asstt. Commissioner while rejecting the refund claim relied upon the Board s Circular dated 3.6.2009 mentioned above and also the Apex Court s judgements in the case of Ranadey Micronutrients Vs. CCE reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order passed by the Commissioner (Appeals) has also rejected the appeal on the same basis, that the validity of the Board s Circular dated 3.6.2009 was challenged before the Hon ble Madras High Court by filing a writ petition by M/s. VVD and Sons (Pvt.) Ltd and the Hon ble Madras High court vide judgement dated 29.04.2014 reported in 2014 TIOL- 2142-HC-MAD-CX quashed the above mentioned circular issued under Section 37 B of the Central Excise Act, 1944 observing that the same is arbitrary and unreasonable and without jurisdiction and hence, null and void and contrary to the provisions of the Central Excise Act, 1944, that the validity of the Board s Circular dated 3.6.2009 was also challenged before the Hon ble Kerala High Court by filing of writ petition by M/s. Marico Industries and Hon ble Kerala High court vide judgement dated 10.11.2009 reported in 2012 (282) ELT 180 (KER) held that the circular issued by the department cannot operate when the field is occupied by a decision rendered by Appellate Tribunal and that the department cannot take a stand contrary to the Tribunal s order on this issue, that the Tribunal in the case of Aiswarya Industries Vs. CCE, Pondich ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct. 5. Shri Ranjan Khanna, ld. Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner and pleaded that the Board s Circular dated 3.6.2009 had been issued on the basis of Heading no.3305 of Chapter 33 read with Chapter Note 3 to this Chapter and Section Note 2 to Section VI as it stood w.e.f. 28.02.2005, that while the erstwhile Chapter Note 2 to Chapter 33 prescribed a condition that heading 3305 (which covers hair oil also) applies to the products put up in packings with label, literature or other indications showing that they are for use as cosmetics or which are put up in a form clearly specialized for such use, this chapter note of Chapter 33 has been replaced by a new Chapter Note 3 which provided that Heading 3305 to 3307 applies to the 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 of a kind sold by retail for such use, that in view of the amended Chapter Note 3 to Chapter 33 read with Section Note 2 to Section VI, which provided that the goods classifiable under Heading No.3305 by reason of be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, it is seen that there is no indication on the label that it is meant for use as hair oil. The dispute in the present case is about classification of this product which is sold as edible coconut oil , pure coconut oil or coconut oil . While according to the appellant, coconut oil though packed in retail packs of 200 ml. or less is covered by Heading 1513 for the product coconut oil according to the department, in view of the Board s Circular dated 3.6.2009 this product would be classifiable as Hair Oil under Heading No.3305 as the same is packed in retail packings which are meant for its use as Hair Oil. According to the Board s Circular dated 3.6.2009 the coconut oil packed in retail packs of 200 ml. or less with the labels on the packing indicating the same as edible oil or Pure Coconut Oil or Coconut Oil would be classifiable as Hair Oil under Heading No.3305 of the Tariff, as the survey conducted by the Board indicated that the small packs of upto size of 200 ml. are normally used as Hair Oil by the customers and the retail shops also keep the coconut oil packs upto 200 ml. along with the Hair Oil and not with the edible preparations or edible oils. The appellant dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 and also the judgement of the Supreme Court in the case of Ranadey Micronutrients (supra) and CCE Vs. Dhiren Chemical Industries (supra), wherein it was held that the Board s Circular even if contrary to the provisions of law, are binding on the Departmental officers, we are of the view that the reliance of the lower authorities on the Apex Court s judgement in the case of Ranadey Micronutrients (supra) and Dhiren Chemical Industries(supra), is not correct as the issue of binding effect of Board s Circular had been examined by Constitutional Bench of the Apex Court in the case of CCE, Bolpur Vs. Ratan Meltings & Wire Industries reported in 2008 (231) ELT 0022(SC), wherein the Apex Court has held that the Board s circular would be binding only if they are in accordance with the provisions of law and the same would not be biding if they are contrary to the provisions of law. In the present case, when validity of the Board s Circular dated 3.6.2009 issued under Section 37 B of the Act has been examined in detail by the Hon ble Madras High Court in the case of VVD & Sons (Pvt.) Ltd. (supra) and when the Board s Circular has been held to be contrary to the provisions of Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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