Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of C. Ex. vs Himalaya Drug Company Ltd. on 8 July, 2005
Equivalent citations: 2005(189)ELT471(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. This is an appeal filed bythe Revenue against the Order-in-Appeal No. 61/2002, dated 28-02-2002 passedby the Commissioner of Customs and Central Excise (Appeals), Bangalore.
2. The issue involved in this appeal is the correct classification of AntiDandruff Hair Vitalizer and Revitalising Hair Nutrient manufactured by the Respondents. Both the Original and the first Appellate authorities had decided theclassification under 3305.10 in the erstwhile Central Excise Tariff heading as"perfumed hair oil". However the Revenue wants to classify the goods under3305.99 as "other preparations for use on the hair".
3. The grounds of the appeal in brief are as follows :-
(i) The name of the goods "Anti Dandruff Hair Vitaliser" apart frombeing perfumed which is done to get rid of unpleasant odour andmake it acceptable to the Customer, contains ingredients such asTea-Tree Oil and Neem Oil which act as anti-dandruff agent. Similarly '"Revitalising Hair Nutrient" contain ingredients such as Bringaraja, Amalaki, Methi which promote hair growth, which is itsprimarily function. The label and process of manufacture nevermention adding of any perfume.
(ii) From the details given on the label, it is very clear that the primaryfunction of the impugned goods is to prevent hair loss, promotehair growth, control dandruff and relieve scalp itch. Mere additionof some perfume to get rid of unpleasant odour will not make theimpugned goods perfumed hair oils as per Heading No. 3305.10.
(iii) The Revenue relied on the Hon'ble Supreme Court decision in thecase of M/s. BPL Pharmaceuticals Ltd. v. CCE, Vadodara wherein the Supreme Court held that "Selsun" is ananti-dandruff preparation and is a medicament and not cosmetic eventhough perfumed. The Apex Court has observed that the addition of insignificant quantity of perfume to suppress the smell will not take away thecharacter of the product or drug or medicine.
(iv) In the case of M/s. Vasu Pharmaceuticals v. CCE, Vadodara 1999 (111)E.L.T. 625 the Tribunal has held that "Trichup Hair Oil" whichis marketed as herbal hair tonic is perfumed to give it pleasant odour isclassifiable under Heading No. 3305.99 (earlier 3305.90).
4. Shri Ganesh Havanur, learned SDR appeared on behalf of the Revenue and Shri Vishnumoorthy, learned Consultant appeared on behalf of the Respondents.
5. The learned SDR reiterated the grounds of the appeal and emphasised the point that very insignificant quantity of perfume is added and the impugned goods are mainly for anti-dandruff and for hair growth as can be seenfrom the various ingredients. Moreover, the products are not marketed as perfumed hair oil. Hence they merit classification under Chapter Heading 3305.99.
6. The learned Chartered Accountant submitted the following points :-
(i) It is not important as to how the product is marketed. The CESTATin case of Amit Ayurvedic and Cosmetic Products (I) Pvt. Ltd. v. CCE has held that even though theproduct parachute dandruff solution coconut hair oil contains anti fungalproperty, while classifying the product, specific identity will prevail overthe general identity and accordingly the item is classifiable under Heading3305.10. In the present case also, the products contain the 'perfume'and based on the above decision even if the product is not marketedas 'Hair Oil', it is only sufficient a product carries a character of the'perfume'.
(ii) The adjudicating authority as well as the first appellate authorityhave examined the case physically and come to the conclusion thatthe drugs has character of perfume based on Note 6 to the Chapter33 for classifying the same under 3305.10.
(iii) The CESTAT in case of Commissioner of Central Excise Vapi v. BetaCosmetics has held thatthe product "clinic plus coconut oil" and "clinic all clear dandruff hair oil"are basically coconut oil with added perfumes, thereby giving it an identityof "perfumed hair oil". Dandruff cure is merely a secondary function andhence the product is to be classified under 3305.10 of the Tariff Act. Inthat case also, the product was not marketed as "perfumed hair oil".The CESTAT in the case of B.K. Products v. CCE - 1998 (104) E.L.T.430 has held that "Ghrit Kymari Tel" used for care of the hair is a hair oilwhich has a pleasant, fragrant odour and accordingly classifiable as perfumed hair oil by virtue of Note No. 6 to Chapter 33. In this case also, theproduct was not marketed as perfumed hair oil and the same ismarketed in its name.
(iv) The Department relies on the Tribunal decision in the case of VasuPharmaceuticals Pvt. Ltd. (supra) which is not correct as the issue inthat case is whether the product should be classified under Chapter30 or 33. In the present case, both the authorities have classified under Heading 3305. The dispute is only the sub-heading.
7. We have gone through the records of the case carefully. It is not indispute that the impugned item is hair oil. Both the Revenue and Respondentagree to the main classification 3305. The dispute is only with regard to the subheading. According to the Respondent, the goods are classifiable under subheading 3305.10 as perfumed hair oil whereas according to the Revenue, thegoods come under sub-heading 3305.99. Since there is difference in the rate ofduty, the Revenue is challenging the classification claimed by the Respondentand approved by both the Original and first Appellate authorities. The Commissioner (Appeals) has relied on Chapter Note 6 read with Chapter Note 2 of the Chapter 33, according to which the perfumed hair oil whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value should be classified under Heading33.05. Moreover there is specific sub-heading covering perfumed hair oil and thesub-heading is 3305.10. Hence, even though the impugned products containother ingredients and have got other proprieties, there is no dispute over the factthat they are hair oil and perfumed. Under these circumstances, the Commissioner (Appeals) has classified the item as declared by the Respondent. TheOriginal authority also has adopted the same reasoning. All the case laws citedby the Respondent are in their support. Under these circumstances, we held thatthe Order-in-Appeal is legal and proper and the impugned goods are correctlyclassifiable under sub-heading 3305.10. Hence the Revenue's appeal is dismissed.
(Pronounced in the open Court on 8-7-2005)