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TMI Blog2006 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... duct shall not be classified wider SH No.3305.99 being a cosmetic product attracting excise duty at the rate of 30% ad valorem. It was alleged that by wrong classification of its product there had been a short payment of central excise duty amounting to Rs,11,12,129/-. A demand of the said amount in terms of Rule 9(2) of the Central Excise Rules, 1944 (for short, 'the Rules') read with section 11A of the Central Excise Act, 1944 (for short, 'the 1944 Act') was issued. A penal action in terms of rule 173Q of Rules was also proposed. Cause having been shown by Respondent, the matter was heard by the Deputy Commissioner, who opined that the product was classifiable under SH 3305.99 of the 1985 Act. Respondent was directed to make good the shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in hearted with Nagarevel Pan. (c) Concentrated equeous extract is added to coconut oil and boiled. (d) Milk solution is added to hot Coconut oil and boiled. Then kapur kachli powder is added. (e) Bulk is cooled and fragrance is added. It is kept for 7 days and filtered." The assessing authority in its order furthermore noticed: "They further submitted that the Coconut oil is used in the said Product for the purpose of using the same as base to enable application of the above referred Ayurvedic Ingredients. Their product contains, time tested herbs with well known properties. They submitted the various properties of the said Ayurvedic. Ingredients ultimately ensured dandruff free hair, and also strengthen and promotes of the various i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. The Chapter Sub Heading No. 3305.10 is applicable to the perfumed hair oil whereas Chapter Sub Heading No. 3305.99 covers preparation for use on the hair other than perfumed hair oil and hair fixer. They submitted that going by the contents of their product and manufacturing process set out hereinabove, theft product does contain Sugandhi Dravya i.e. perfume and accordingly it merits classification as perfume hair oil under 3305.10. In this context they refer to and rely upon the decision of Honourable Supreme Court of India in the case of Dumlop India Ltd., wherein the court has held as under: "When an article has by all standard reasonable claim to be classified under an enumerated item in a Tariff Schedule then it would be against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudication Order. We, therefore, hold that the impugned product is classifiable under sub-heading 3305.10 and the matter is remanded to the jurisdictional Adjudicating Authority to recompute the duty of excise payable by the appellants. We also agree with the learned advocate that the issue involved being classification of a product for which classification declaration was filed by the Appellants, penalty under Rule 173Q of the Central Excise Rules, 1944 is not imposable. We, therefore, set aside the penalty imposed on the Appellants. 10. Respondent, as noticed hereinbefore, not only disclosed the ingredients of its products, but also disclosed the manufacturing process. On almost identical situation, as would appear from the discussions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umaran that merely because the percentage of medicament in a product is less, does riot also ipso facto mean that the product is not a medicament. Generally the percentage or dosage of the medicament will be such as can be absorbed by the human body. The medicament would necessarily be covered by fillers/vehicles in order to make the product usable. It could not be denied that all the ingredients used in Banphool Oil are those which are set out in the Ayurveda textbooks. Of course the formula may not be as per the textbooks but a medicament can also be under a patented or proprietary formula. The main criterion for determining classification is normally the use it is put to by the customers who use it. The burden of proving that Banphool Oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. v. Commissioner, Central Excise, Nagpur [2006 (196) E.L.T. 3 (SC): (2006) 3 SCC 266], 'Puma Hair Tonic Powder' and 'Puma Anti-Dandruff Oil', 'Puma Shishu Rakshak Tel' were held to be medicinal products having regard to the medicinal property. Respondent, therefore, could contend that there product also is an Ayurvedic medicament. Tribunal, however, proceeded on the alternative submissions made on its behalf. No appeal has been filed against the order of the Tribunal refusing to classify the product of respondent as an Ayurvedic Medicament. 18. We are, therefore, only left with the contention that the product of Respondent is a 'perfumed hair oil'. Indisputably, perfume is added. Addition of perfume is a part of manufacturing proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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