Customs, Excise and Gold Tribunal - Delhi
Shalaks Chemicals vs Collector Of Central Excise on 28 January, 1999
Equivalent citations: 1999(107)ELT314(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The above appeal is directed against the order of the Collector of Central Excise (Appeals), New Delhi, upholding the order of the Assistant Collector who has classified the product "OLEMESSA BATH OIL" manufactured by the appellants herein under sub-heading 3307.30 of the CETA, 1985 and held that it is leviable to duty @ 105% without being eligible for the exemption available to "Thailams" in terms of Notification 385/86-C.E., dated 29-7-1986, and has confirmed the differential duty of Rs. 15,06,068.53 on the above product cleared from 1-4-1987 till the date of issue of the two show cause notices viz. 14-8-1987 and 15-9-1987. The case of the Department is that all Thailams are a native description for oily preparations made by native methods by natural herbs/flowers, roots of plants etc. and since the constituents of the disputed product are liquid paraffin, soyabean oil, arachis oil, is opropylmyristate, perfume and colour, it is not a Thailam. The lower authorities are also of the view that while all Thailams are bath oils, the converse is not necessarily true. The assessee's plea of redetermination of assessable value by deduction from cum-duty price charged by them on the basis of the declared price (which according to the assessees would be Rs. 12,05,314.20) has also been rejected by the lower authorities as unsubstantiated.
2. We have heard Shri M. Chandrasekharan, learned Sr. Advocate appearing along with Shri C. Hari Shankar, learned Advocate and Shri A.K. Madan, learned SDR.
3. We find that the Department's stand that the product in dispute is not a Thailam is based upon the judgment of the Hon'ble Madras High Court in the case of Union of India v. T.S.R. & Co., Kumbakonam reported in 1985 (22) E.L.T. 701 (Mad.). In that case the assessee was a manufacturer of perfumes and also certain Thailams such as Sandanathi Thailam, Bringamalika Thailam, Ponnankanni Thailam Araikeeraivithai Thailam, etc. On the introduction of the Finance Bill (No.) 2 of 1971, dated 29-5-1971 Tariff Item 14F(ii) was introduced in Schedule 1 of the CESA, 1944 and it reads as "preparations for the care of the hair - (a) hair lotions, creams and pomades, (b) perfumed hair oils, (c) shampoos whether or not containing soap or detergent". Samples of the Thailams prepared by M/s. TSR & Co. were sent for analysis and a show cause notice proposing levy of duty under the above mentioned Tariff Item was issued. The authorities below held that the Thailams were perfumed hair oil leviable to duty under Tariff Item 14F(ii). The revision petition filed by the assessees to the Government of India was also dismissed after which the assessees filed a Writ Petition No. 1604/78 before the Hon'ble Madras High Court. Before the Hon'ble Madras High Court, the assessees contended that the Thailams are prepared with gingelly oil, boiling the same with natural herbs, flowers and roots of plants under an old and immemorial system of native preparation. They contain medicinal qualities and are used before bathing as bath oils and are not usable as hair oils for grooming the hair. They also submitted that the Thailams are widely used and commonly known in the market and in the commercial field only as bath oils; they are neither known nor marketed as hair oil. The learned Single Judge of the High Court in his judgment reported in 1978 (2) E.L.T. (J702) set aside the levy of excise duty under Tariff Item 14F(ii) holding that none of the Thailam is ever used after bath and that no person in the commercial field will ever consider these oils as hair oils and in common parlance these are understood as Thailams. The Government went up in appeal before the Division Bench in Writ Appeal No. 529/78 and the Division Bench upheld the order of the learned Single Judge. The Court held that only such oils which are used for the care of the hair could be brought under Tariff Item 14F(ii) and the Thailams prepared by TSR & Co. are used only as bath oils i.e. oils which are used before bath. The Court also noted the specific plea of the assessee that in the commercial field the Thailams manufactured by it are not treated as hair oils much less perfumed hair oils, as the Thailams are intended for use for cooling the body as such.
4. The above judgments clearly recognise that all Thailams are a native description for oily preparations made by native methods from natural herbs, flowers, plants, etc. On the other hand, it is seen from the constituents of Olemessa Bath Oil that the product is not a Thailam within the meaning ascribed thereto by the Hon'ble Madras High Court. The appellants have also not been able to show that the disputed product contains any medicinal qualities (Eucalyptus oil IP is an example of Thailam which has got medicinal qualities as seen from the label at page 110 of the paper book wherein external use for common colds, coughs, headache, pains etc. has been indicated on the label itself) or that it had the effect of cooling the body. The appellants have also not been able to show that the disputed product is commercially known and marketed as Thailam. Since the term Thailam has been judicially interpreted, there is no necessity of looking into dictionary meaning as held by the Hon'ble Supreme Court in the case of State of Orissa v. Titagurh Paper Mills reported in AIR 1985 SC 1293. The other case law cited by the learned Senior Counsel viz. decisions of the Supreme Court in the case of Star Paper Mills Ltd. reported in 1989 (43) E.L.T. 178 (S.C.) and the Tribunal's order in the case of Ashoka Foods Ltd. v. Collector of Customs reported in 1989 (42) E.L.T. 409 are distinguishable -in those cases, it was held that in the absence of any definition of any word or expression in the Statute, it was permissible to refer to the dictionary meaning thereof; while in the present case, as already noted above, the term Thailam has been interpreted by the Hon'ble Madras High Court. The argument raised by the learned Senior Counsel that since the Madras High Court judgment in the cases of M/s. TSR & Co. forms the basis of the Department's case on classification, by the same token, the finding of the High Court that the Thailams are not cosmetic or toilet preparations should also be made applicable in the present case, is fallacious, as the High Court finding was rendered, in the context of Tariff Item 14F(ii) covering "preparations for the care of the hair" which does not hold good in the context of the present Tariff wherein sub-heading 3307.00 covers "pre-shaving ... perfumed" bath salts and other bath preparations ... and other perfumary cosmetic or toilet preparations" and the product in dispute is in the nature of a bath preparation. For the above reasons, we hold that the product in dispute is not a Thailam and hence not entitled to the benefit of Exemption in terms of Notification 385/86-C.E,, dated 29-7-1986 as amended. .
5. The next plea raised by the ld. Counsel for the appellants relates to the quantification of duty. He states that duty is sought to be levied at 105% instead of 25% as charged and collected by them, the assessable value would have to be redetermined by deduction from the cum-duty price charged by the appellants on the basis of the declared price. They have set out in paragraph 16 of their reply dated 28-10-1987 to the show cause notice that upon such redetermination of assessable value, the duty payable by them would be Rs. 12,05,314.20 out of which Rs. 4,70,640.50 has already been paid and the balance duty would only be Rs. 7,34,667.70 and not Rs. 15,06,068.53 as proposed in the show cause notice (and as confirmed in the adjudication order). "They have also given a calculation chart in which they have shown the calculation of goods" cleared by them after availing exemption under Notification 385/86-C.E. as amended and calculation of the duty is to be levied at 105%. This plea has been rejected by the Assistant Collector as unsubstantiated. We agree with the appellants that the assessable value has to be redetermined by deducting the duty element from the cum-duty price, in terms of Section 4(4)(d)(ii) of the CESA, 1944, as held inter alia in the case of Seraikella Glass Works P. Ltd. v. CCE, Patna reported in 1988 (37) E.L.T. 452, Quality Printer v. CCE, Bombay reported in 1994 (73) E.L.T. 901 and in the case of Paharpur Cooling Toners Ltd. v. CCE, Calcutta reported in 1996 (86) E.L.T. 132.
6. In the result, the demand of duty by the authorities below is confirmed subject to its requantification as observed in the preceding paragraph. The appeal is disposed of in the above terms.
Sd/-
(Jyoti Balasundaram)
Dated : 2-12-1996 Member (J)
S.K. Bhatnagar, Vice President
7. With due respects to Hon'ble Member (Judicial), my views and orders in the matter are as follows.
8. Learned Counsel stated that the appellants commenced manufacture of Olemessa Bath Oil on 20-3-1987 under a valid L-4 licence. They also hold a licence from the Drug Controller, Delhi inter alia, for the manufacture of Olemessa Bath Oil. The appellants had, on 6-2-1987, filed a classification list in respect of its product classifying the same under sub-heading No. 3307.00 claiming exemption from central excise duty under Notification No. 385/86-C.E., dated 29-7-1986. They had also filed price lists in Part-I. Upon the introduction of more sub-headings in Heading No. 33.07, pursuant to the budgetary changes effected in 1987, the appellants filed a second classification list effective from 1-4-1987 classifying the product under sub-heading No. 3307.30 as a perfumed bath preparation. Without approving the classification lists and the price lists, departmental officials raided the appellants' premises on 26-6-1987 and resumed several documents. Whenever the departmental officials had sought any information from the appellants relating to their production activities, the appellants had promptly made all such information available to them. In fact, after the raid on 30-6-1987, a representative sample of the bath oil manufactured by the appellants was taken by the departmental officials for chemical analysis. Further, without waiting for the report of the chemical examiner, the Supdt. directed the appellants vide his letter dated 3-7-1987 to clear the goods only under Heading No. 3304.
9. It was his submission that the appellants received a notice dated 14-8-1987 in respect of the classification list filed on 6-2-1987 effective from 29-1-1987. Nothing was done on the classification effective from 1-4-1987. The appellants requested the department to return the records and to provide the basis on which the allegation was made. Without furnishing the details elicited above, the A.C. issued a demand on the basis of the earlier show cause notice on 15-9-1987. Rejecting the submissions made by the appellants, the A.C. has passed the impugned order-in-original. They filed an appeal before the Collector (Appeals), New Delhi.
10. It was also his contention that the basis of the allegations in the show cause notice had not been spelt out and, though it was stated by the Assistant Collector that the same would be discussed at the time of adjudication, the appellants at the time of hearing were directed to meet the case on the facts as they were without the basis being clarified at said hearing. The decision of Hon'ble Madras High Court in the case of Union of India v. TSR & Co. reported in 1985 (22) E.L.T. 701 had been mis-understood by the department, as could be seen from the language which was adopted in the show cause notice. It was the Department's own case that the appellants' product is not gingelly oil boiled with herbs etc. If this was the case, as has been held by the Hon'ble Madras High Court, it could not be considered to be a toilet or cosmetic preparation with the result that it would necessarily have to fall outside chapter 33.07. The notification cannot, in such circumstances, apply to such a product and would become otiose and redundant.
11. The use of the word 'thailam' in brackets would clearly show that it was descriptive and not restrictive in operation. The reference had been made before the A.C. to several dictionaries and literatures, specially pertaining to South India where the word 'thailam' is in vague to prove the case of the appellants. None of these was adverted to in the order of the A.C. The A.C. had wrongly distinguished the decision of Hon'ble Supreme Court in the case of Union of India v. TISCO reported in AIR 1976 S.C. 599 by merely stating that in the present case the distinction between a 'strip' and 'skelp' is not involved. The plea in the matter of redetermination of assessable value had been wrongly dismissed on the ground that the relevant provision in the Act had not been indicated. In any event, the A.C. had passed the order specifically stating that "this order is passed keeping in view the Board's letter F.No. 103/10/87-CX-3, dated 25-9-1987. The endorsement clearly showed that the A.C.'s order was not passed in independent exercise of her powers but in deference to some direction given by the Board in the letter dated 25-9-1987, without intimating to the appellants anything regarding the same. By the impugned order dated 14-3-1989, the learned Collector (Appeals) has dismissed the appeal.
12. It was his submission that the meaning of the word 'thailam' as contained in different Tamil Dictionaries is "oil" only. None of these points made on behalf of the appellants has been considered. The cryptic reference to the goods being not marketed as thailam is also totally uncalled for. It is not the mode or manner of marketing which necessarily determines the classification of goods but the understanding by the trade of what the goods are, which is relevant. There is no finding that the goods manufactured by the appellants were not considered by purchasers of the goods as bath oils (thailam). It was the categoric case of the appellants that thailam is known in the South as a synonym for 'oil'. And, this is what the dictionaries and other literature which were produced at the hearing, also stated.
13. He further stated that what was adjudicated was the show cause notice which was issued in respect of the classification list effective from 29-1-1987 of which no clearances were effected by the appellants. The appellants had filed a subsequent classification list effective from 1-4-1987 after which clearances were made. The said classification list effective from 1-4-1987 still remains to be approved and is still with the department. The demand in the present case which is for the period 1-4-1987 to 15-9-1987 is, therefore, uncalled for. About re-determination of duty, the Collector (Appeals) has not even referred to the same although Section 4(4)(d)(ii) of the Act specifically provides for a re-determination of duty in such cases. Reference may, in this connection, be made to the decision of Hon'ble Supreme Court in the MRF case reported in 1987 (27) E.L.T. 553 where the method of such re-determination has been spelt out and explained.
14. Learned DR stated that the product though classifiable under the declared sub-heading No. 3307.30 is not entitled for the exemption available under Notification No. 385/86-C.E. dated 29-7-1986 because the said notification grants exemption only to a variety of bath oils namely 'Thailams' and not to all varieties of bath oils. The product 'Olemessa Bath Oil' though a variety of bath oil does not fall under Thailams'. The composition and method of preparation of "Thailams' is altogether different as compared to the composition and method of preparation of 'Olemessa Bath Oil'. A Thailam' is prepared by boiling certain oils namely gingelly oils with natural herbs, flowers, roots of plants under an old system of Tamil preparations. The product 'Olemessa bath oil' does not incorporate any of these ingredients and its composition is as follows:
"(i) Light Liquid Paraffin 20% by volume (ii) Heavy Liquid Paraffin 20% by volume (iii) Arachis Oil 29.5% by volume (iv) SoyabeanOil 30% by volume (v) Isopropylmyristate 0.5% by volume (vi) Perfume - approximately 600 ml. per 200 litres."
15. It was also his submission that all Thailams' are bath oils but all 'bath oils' are not Thailams' and as such, the exemption available under Notification No. 385/86-C.E., dated 29-7-1986 cannot be extended to all bath oils but to Thailams' only.
16. I have considered the above submissions. I find that the relevant show cause notice dated 14-8-1987 proceeds on the basis that the item was classifiable under the declared sub-heading 3307.30 and the subsequent demand-cum-show cause notice dated 15-9-1987 refers to the above show cause notice and Heading 3307.30. The A.C. has, in his order-in-original, referred to these two notices and the appellants have also claimed classification under Heading 3307. Therefore he would like to proceed on the basis that this was the agreed position (irrespective of the letter of the Supdt. dated 3-7-1987 indicating different headings/sub-headings namely Headings 30.04 and 33.04). I am taking this view because both in the show cause notice and the order of the A.C., it is the Heading 3307.30 which has formed the basis of the departmental action at the adjudication stage.
17. The impugned order-in-appeal also proceeds on the basis that both the sides have referred to the same Heading 3307 and the arguments have been advanced before us with reference to this heading. I, therefore, take it that we do not have to deal with any other chapter, item or sub-item except 3307.
18. This leaves us only with the question as to whether the product was in the nature of a bath preparation (thailam) entitled to the benefit of Notification No. 385/86-C.E., dated 29-7-1986. This notification exempts bath oils (thailams) falling under sub-heading No. 3307.30 of the Schedule to the CETA, 1985 (5 of 1986), from so much of duty of excise leviable thereon which is specified in the said schedule, as is in excess of the amount calculated at the rate of twenty-five percent ad valorem.
19. In this connection the whole controversy has centered virtually around the issue regarding the nature of the Thailams - (1) what they are, how they are made and what are their uses and (2) whether bath oils include thailams or thailams include bath oils.
20. In this respect, I find from the extracts from various types of literature and dictionary etc. and the photocopies of various labels of various products produced before us and cited by the learned Counsel that the word 'thailam' has been and is being used in various senses. In its widest or general sense, thailam has been equated with 'Tailam' in Sanskrit and 'Oil' in English but, from the examples given of such thailams or oils, its use appears to be confined to oils of plant origin or extracts made therefrom and the uses include "to anoint the head or body"; And, thailams cover, inter alia, fragrant oils and oils for medicinal purposes as well (vide Tamil Nadu Laxicon Vol. IV Part I issued under the authority of the University of Madras). It, however, appears that this term is also used in a more specific sense in some parts of South India and there confined only to oils made from herbs, flowers and roots of plants etc. prepared by traditional (old) native method and used for applying before bathing i.e. in this sense, thailam cover only such preparation and not other types of bath oils.
21. In my opinion, the controversy whether bath oils include thailams or thailams include bath oils is not called for, as it will not be appropriate to do so in view of more than one senses in which the word 'thailam' is used. The Madras High Court's judgments referred to by both the sides deals with a particular product only. It was not concerned with the present central excise tariff and its finding was given in the context of the old Tariff Item 14F which covered preparations for the care of the hair whereas the present tariff has a much larger ambit and includes various types of bath preparations and cosmetic or toilet preparations. The observations in the judgment of the Madras High Court are related only to the question whether the product before it could be considered as a perfumed hair oil classifiable under the then Tariff Item 14F(ii) resulting in the observation that thailams are not items of cosmetic or toilet preparations in the nature of a perfumed hair oils exclusively produced for the care of the hair. From the material placed before us, we have seen that it is true that Thailam in its generic sense covers various types of oils which may be used either as bath oils or for massage of body or head or perfumed oils or oils for medicinal use. But that is what we are not concerned in the present case for the simple reason that the Department has not proceeded at the adjudication or appellate stage with reference to Chapter Heading 33.04 and 30.04 mentioned in the Supdt.'s letter (or 33.05 for that matter) and the words 'bath preparations' or 'cosmetic or toilet preparation whether or not perfumed' are certainly terms of much wider import; and in view of Chapter Note 2 to Chapter 33, such preparations could have subsidiary curative or prophylactic value as well. Heading 3303.30 covers perfumed bath oils and other bath preparations. Therefore, even though in Tamil Nadu and its nearby area, thailams are not considered as 'perfumed hair oils', that will not make any difference for our purpose and it would be sufficient for the purpose of classification under this sub-heading if they were a variety or type of bath preparation or covered by this term. The Chapter Notes and the Tariff Entry, as they stood during the relevant period, do not refer to the method or manner of preparation or composition. In fact, Heading 3307 (and for that matter some other headings of this Chapter) are use-oriented entries. Therefore, it is from our point of view also unimportant as to how the product was prepared and whether it was used only on the body or both on body and head and all that was required to be seen is whether it is a bath preparation of a type covered by the notification in question or any other type of cosmetic or toilet preparation.
22. Insofar as the language of the notification is concerned, since it covers undoubtedly bath oils and Thailam has been mentioned in parenthesis, what is important for us to note is that it is undoubtedly an oil and in the nature of a bath preparation. In "The Concise Oxford Dictionary of Current English" Seventh Edition, 'Parenthesis' has been explained as under :-
"Parenthesis, word, clause, or sentence, inserted into a passage to which it is not grammatically essential, and marked off by brackets, dashes, or commas; round bracket, used for this; interlude, interval; put in beside."
23. The words or figures are generally, mentioned in parenthesis to clarify, amplify, emphasize, pin-point or focus.
24. In my opinion, the word 'thailam' has neither been used in the notification in its widest or broadest sense in which it covers all types of oils (for various uses) nor in a very narrow or specific sense of a type of traditional preparation of a particular type made according to some ancient or traditional native method locally known and used as such only in Tamil Nadu or its nearby area but as a term equivalent to bath oil.
25. Further, I am also of the opinion that in a notification of all India nature, a word(s) or term(s) cannot be taken to mean or refer to only a particular narrow sense ascribed to it or a specific meaning attributed to it locally in a particular area only unless, of course, the notification indicates explicitly or by necessary implication such a restriction, for the simple reason that a notification applicable all over India has to be understood and applied in the same sense all over the country.
26. In view of the above discussion, I consider that it is not so much the cited case law but the aforesaid and above principle facts which helps in clinching the issue; And, I hold that the appellants were right in claiming the benefit of the aforesaid notification. Hence, I set aside the impugned order and accept the appeal.
Sd/-
(S.K. Bhatnagar)
Dated : 15-2-1998 Vice President
POINT OF DIFFERENCE
27. In view of difference of opinion between Hon'ble Member (Judicial) and the Vice President the matter is submitted to Hon'ble President for reference to a Third Member on the following point :-
"Whether in the facts and circumstances of the case the appellants were entitled to the benefit of the Notification No. 385/86-CE. dated 29-7-1986 as held by the Vice President or not entitled for the same in view of observations and findings of the learned Member (Judicial)."
Sd/- Sd/- Jyoti Balasundram) (S.K. Bhatnagar) Member (J) Vice President Dated : 24-2-1998 Dated : 20-2-1998 G.A. Brahma Deva, Member (J), Agreeing with Vice President
28. Since there has been a difference of opinion in between Hon'ble Member (Judicial) and the Hon'ble Vice President, the following question is referred to me, express my views as third Member :-
"Whether in the facts and circumstances of the case, the appellants were entitled to the benefit of the Notification No. 385/86-CE., dated 29-7-1986 as held by the Vice President and not entitled for the same in view of observations and findings of the learned Member (Judicial)."
29. Heard Sri M. Chandrashekaran, learned Senior Advocate assisted by Shri C. Hari Shankar, learned Advocate for the appellants and none appeared on behalf of the Revenue inspite of notice.
30. The learned Sr. Counsel explained the background of the case in detail. He said that benefit in terms of Notification No. 385/86-CE. has been denied on the ground that benefit would be available only to Thailams and the olemessa bath oil manufactured by the appellants cannot be considered as 'thailam'. According to the department, thailams are preparations of gingelly oil with natural herbs, flowers, roots of plants under an old system. He submitted that it is erroneous to assume that a thailam was necessarily prepared from gingelly oil etc. as made out by the Department and though no basis was given in the show cause notice assuming that the stand of the department was based upon the decision of the Madras High Court in the case of T.R.S. & Company 1985 (22) E.L.T. 701 (Mad.) the decision was rendered in different context to consider the issue of classification whether Thailam prepared by mixing gingelly oil etc. etc. could be regarded as cosmetic or toilet preparations or medicines for the purpose of levy of duty under 14F(ii) of the old Tariff. Accordingly, it was held 'that they could not be classified as perfumed hair oil under 14F(ii) of the erstwhile Tariff Act. He said that classification is not in dispute in this case and if the item was of medicine as per the Department it would not only fall outside the Chapter 33 but also Notification 385/86 becomes redundant since benefit of exemption cannot be extended to any Thailam. Further the department was of the view that all thailams are bath oils. It is not true and in the very case of T.S.R. & Co., relied upon by the department it was held that all thailams cannot be used for bath purposes. He said that there are thailams which are not bath oils but are used for massage and external use for common colds, coughs, headache, bodyaches, pains etc. for instance (Eucalyptus oil. Anu thailam and so on). He contended that thailam is not defined in the statute and in the absence of definition, popular or dictionary meaning to be preferred and he referred to the techncial literatures and various dictionaries to show that thailams is nothing but oil.
31. I have carefully considered the matter. Whether the item Olemessa Bath oil manufactured by the appellants is eligible for benefit in terms of Notification No. 385/86-C.E. is an issue to be considered in this appeal. The relevant portion of the Notification No. 385/86-C.E. is as under :-
"...the Central Government hereby exempts bath oils (thailams) falling under sub-heading No. 3307.30... from so much of the duty leviable thereon ... as is in excess of the amount calculated at the rate of 25% ad valorem."
32. According to the department, benefit in terms of notification cannot be extended to the product in question since the item is not thailam and a thailam is prepared by boiling certain oils namely gingelly oil with natural herbs, flowers, roots of plants under an old system of Tamil preparations. The impugned product does not incorporate any of these ingredients and its composition is as follows :-
"(i) Light Liquid Paraffin 20% by volume (ii) Heavy Liquid Paraffin 20% by volume (iii) ArachisOil 29.5% by volume (iv) SoyabeanOil 30% by volume (v) Isopropylmyristate 0.5% by volume (vi) Perfume - approximately 600 ml. per 200 litres."
33. The Notification 385/86 exempts bath oils (thailams) falling under sub-heading No. 3307.30. It means bath oil containing thailam falling under Chapter 33 is exempted. In other words thailam must be used as bath oil to get exemption in terms of notification. It is not in dispute that item is in the nature of a bath preparation and cleared it as bath oil. "Whether this bath oil is of thailam or not to be exempted in terms of notification is the limited issue. The word thailam was not defined in the statute. In the absence of definition of any word or expression in the Statute it was permissible to refer to the dictionary meaning thereof as it was held in the case of Star Paper Mills v. CCE -1989 (43) E.L.T. 178 (S.C.); State of Orissa v. Titagarh Paper Mills Co. Ltd., - AIR 1985 (S.C.) 1293 and Ashoka Foods Ltd. v. C.C. -1989 (43) E.L.T, 409, referred to and relied upon by the learned Counsel on behalf of appellants. On going through the technical literature and dictionaries, it is clear that thailam is nothing but 'oil'. Thailam may be used as medicine or as bath oil depending upon constituents and composition. If the thailam is of medicine it falls outside Chapter 33 as it was rightly argued on behalf of the assessee. The decision of the Madras High Court in the case of T.S.R. & Co. referred to above was in different context. As it was rightly observed by the Hon'ble Vice President in his order, it was not concerned with the present Central Excise tariff and its finding was given in the context of old Tariff Item 14F(ii) which covered preparations for the care of the hair whereas the present tariff has a much larger ambit and includes various types of bath preparations and cosmetic or toilet preparations. The observations in the judgment of the Madras High Court are related only to the question whether the product before it could be considered as a perfumed hail oil classifiable under the then Tariff Item 14F(ii) resulting in the observation that thailams are not items of cosmetic or toilet preparations in the nature of a perfumed hair oils exclusively produced for the care of the hair. Further observation made by the Hon'ble Vice President in para 16 of the order is also relevant and same is reproduced as under :-
16. Insofar as the language of the notification is concerned, since it covers undoubtedly bath oils and Thailam has been mentioned in parenthesis, what is important for us to note is that it is undoubtedly an oil and in the nature of a bath preparation. In "The Concise Oxford Dictionary of Current English" Seventh Edition, 'Parenthesis' has been explained as under :-
"Parenthesis, word, clause, or sentence, inserted into a passage to which it is not grammatically essential, and marked off by brackets, dashes, or commas; round bracket, used for this; interlude, interval; put in beside."
34. In the case of Union of India and Ors. v. TISCO - 1978 (2) E.L.T. (J 439), it was held by the Apex Court that a fiscal legislation, by all standards should adopt a clear definition of an excisable item which is incapable by giving rise to a confounding controversy. It would not result in fiscal misfortune to the Assessee. Further, Supreme Court in the case of Mac Laboratories (Pvt.) Ltd. v. Collector of Central Excise, Bombay, reported in 1994 (74) E.L.T. 769 (S.C.) and in the case of Bombay Chemical Pvt. Ltd. v. Collector of Central Excise, Bombay, reported in 1995 (77) E.L.T. 3, has analysed the position how the notification is to be construed strictly at one stage and liberally at another. In the first case, it observed that being an exemption notification, the benefit of it is available to only those medicines which fall under it. To that extent the notification has to be construed strictly. But once it is found that a medicine falls in the category of parenteral medicine then the benefit cannot be denied because it falls in category of those medicines which are applied locally. In the latter case, it held that exemption notification to be strictly construed only when a particular article is capable of falling in one or the other category specified in the notification but once it falls under the exemption notification it has to be construed broadly and widely. Once an article is found to have satisfied the test by which it falls in the exemption notification then it cannot be excluded from it by construing the exemption notification strictly or narrowly. In the instant case, since the Notification No. 385/86 exempts bath oil (thailam) and in view of the generic sense that thailam is oil and bath oil (thailam) falls under Chapter 33, there is no justification in denying the benefit in terms of above notification. Accordingly, the view expressed by the Vice President is concurred with. File is returned to the original Bench to pass an appropriate order.
Sd/-
(G.A. Brahma Deva)
Dated : 28-1-1999 Member (J)
ORDER
35. In view of the majority opinion, the appellants were entitled to the benefit of the Notification No. 385/86-C.E., dated 29-7-1986 and the appeal is accepted.