ORDER
G.R. Sharma, Member (T)
1. The ld. Commissioner, Customs, ICD, Tughlakabad, New Delhi in the impugned order held :
“9. The imported goods of the GIF value of Rs. 14,14,184/- are ordered to be confiscated under Section 111(d) of the Customs Act, 1962. The importing party is however given an option to redeem the goods on payment of a fine of Rs. 12,00,000/- (Rupees Twelve Lakhs only). This option should be exercised by the party within 20 days of the receipt of the order failing which the goods will stand absolutely confiscated.”
2. The facts of the case are that the Appellants are importers and imported Shave Foam and Shave Gel and claimed the ITC Classification under Heading 3307.10 and claimed clearances thereof under Special Import Licence (SIL) as Shaving Cream. The Department alleged that the goods did not answer the description of Shaving Cream as they have been described as Shave Foam and Shave Gel and, therefore, specific licence was necessary. The Importers waived the requirement of issue of Show Cause Notice and requested for personal hearing. It was contended by the Appellants (Importer) that Shave Foam in Aerosol metal containers and shave gel in similar cans are known in the market as shaving cream. The Department contended that the popular concept of shaving cream is that of a shaving product in cream form sold in the collapsible aluminium or laminated tubes and if one asks a shopkeeper for shaving cream, one would not be handed over a can of shave foam or gel. The Department contended that the shave foam or shave gel imported by the Appellant cannot be classified under the EXIM code relevant to the description shaving cream which cannot be cleared under a SIL produced by the Importer. It was contended further by Revenue that the real nature of a product is as it is perceived by common man and is known in the trade parlance is to be seen to decide the category in EXIM code; that the Gel foam products did not even have any mention of ‘cream’ on their packing. It was, therefore, held by the Department that the product are not covered by the SIL produced by the Importer. The goods were, therefore, confiscated and permitted to be redeemed on payment of a fine of Rs. 12.00 Lakh and also a penalty of Rs. 2.00 Lakh was imposed.
3. Shri V. Sridharan, the ld. Counsel appearing for the Appellant submits that the description of the goods in EXIM code under Heading 3307 reads:
“33.07 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or. included; prepared room deodorisers, whether or not perfumed or having disinfectant properties.”
4. He submitted that this general heading is sub-divided into sub-headings as under:
"330710 00 Shaving Restricted Consumer goods. Import
Cream Not permitted to permitted
be imported against
except against a Special
licence or in Import
accordance with Licence
a Public Notice (SIL)
issued in this
behalf.
33071009 Other pre or Restricted Consumer goods.
after shave Not permitted to
preparations be imported except
against a licence or
in accordance with
a Public Notice issued
in this behalf."
5. Regarding import restrictions, shaving cream has been permitted to be imported under a SIL whereas other pre or after-shave preparations are restricted and can be imported only against a licence.
6. The ld. Counsel submitted that Encyclopedia of Chemical Technology, by KIRK-OTHMER, Third Edition, Volume 7, Copper Alloys to Distillation, by John Wiley & Sons, on page 155, describes Aerosols as “Such cosmetic products as shaving creams, hair sprays, deodorants and anti-perspirants, colognes, and sunscreens are now commonly packaged as aerosol sprays.” It has been stated in a bulletin released in 1966 by the Aerosol Scientific Committee of the Chemical Specialities Manufacturers Association defining an aerosol product as a liquid, solid, gas, or a mixture that is discharged by a propellant force of liquified and/or non-liquified compressed gas, usually from a disposable type container and through a valve. Further, it has been explained there that the three main components of aerosol products are the propellants, solvents and the active ingredients.
7. The ld. Counsel submitted that in the said volume at Page 168, Shaving preparations, Shave soap, lather shave cream, brushless shave cream, aerosol shave cream have been defined. Shaving preparations have been defined as “Dry hair in the beard is usually quite compact and is resistant to cutting by a razor blade. Preliminary treatment with hot water and soap removes the sebum, a complex mixture of lipids secreted by the sebaceous glands, and absorbed by the beard, that presents a barrier to water and impedes hair softening. The use of a shaving soap or shaving cream provides a wet, lubricating blanket of water that reduces friction between the razor blade and the skin.” Brushless Shave cream has been defined as “Brushless shave creams are similar to vanishing creams, with an excess of free fatty acid, usually stearic, emulsified into a non-alkaline base of suitable viscosity or consistency. Its softening effect is not so rapid as that obtained with a lather shave.”
8. Aerosol Shave Cream in pressurized containers are defined as “convenient to use because the lather is easily obtained in a ready to use form from the can and is easily rinsed off the face. Formulations are either aqueous soap solutions or soap emulsions that are pressurized with a mixture of propane and isobutane. The product is expelled from the container through a valve. The expelled liquid expands to a foam as the propellant is released. Aerosol shave creams contain additives similar to those used in lather shave formulas.” Gel Shave Creams have been defined as “Gel shave creams are emollient aqueous gels that are soap based and contain a volatile solvent such as pentane. Expelled as a soft gel from a pressure container, the shave cream is rubbed on the face, and the solvent is released. The released solvent expands as it volatilizes, and the gel becomes a foam.”
9. The ld. Counsel also referred to “A Consumer’s Dictionary of Cosmetic Ingredients”, New Third Revised Edition by Ruth Winter, wherein shaving creams have been defined as: “Dry hair is hard and difficult to cut with a razor. The object of a shaving cream is to make the hair softer and easier to shave. Brushless shave creams are emulsions of oil and water, really vanishing creams rather than soaps. Not as efficient as the lathering type, they usually require that the beard (or legs) be washed with soap and water. Shaving creams, which must be applied, are soaps with small but copious bubbles known as lather. They can be applied with a brush or with an aerosol. Aerosol shaving creams produce foam. This foam is applied directly to the beard and is the most popular form used today. Some men still use the older shaving creams offered in a cake or stick. The American Medical Association recommends that men with dry or soap-sensitive skin use brushless shave creams that, because of their emollient properties, soothe the skin and do not dry it out.”
10. Pre-shave and After-shave preparations have been defined as: “Most pre-shave lotions are designed to be used before shaving with an electric razor. Some are made for a regular razor and usually contain coconut oil, fatty acids, triethanolamine, alkyl arylpolyethylene glycol ether (a dispersant), water and perfume. Pre-shave preparations temporarily tighten the skin to facilitate cutting the hairs. Electric razor pre-shave products may contain aluminium phenolsulfonate, menthol, camphor, water and perfume dissolved in alcohol. An oily type of pre-shave lotion may contain isopropyl myristate or isopropyl palmitate, 74.5 per cent alcohol, and perfume. After-shave lotions are supposed to soothe the skin, which may have been irritated by shaving. The earliest were merely substitutes for water. At the end of the nineteenth century talcum powder appeared among men’s shaving products. Then barbershop preparations such as bay rum and witch hazel came into use. By 1916 manufacturers were actively promoting men’s toiletries, and today perfume is as common in men’s products as it is in women’s. After shave lotions fall into two categories: alcoholic and non-alcoholic. The most common ingredients of the alcoholic type are, in addition to alcohol, glycerin, water, certified colour, and perfume. Menthol may be added to give that cool feeling to the skin. Some antiseptics such as hexachlorophene, or quaternary ammonium compounds may also be added. Alum may be used for its astringent-styptic effect; also allantoin to promote rapid healing of razor nicks. The after-shave non-alcoholic product resembles hand lotion. In fact, hand lotion may be substituted by the consumer. Such products may be prepared from stearic acid, triethanolamine, cetyl alcohol, glycerin, distilled water, and very small amounts of lanolin and a preservative such as a p-hydroxybenzoic acid. Many other fats, waxes, and emulsifying agents may be added. Antiseptics and soothing allantoin, as well as colonring and perfume, may be incorporated into this type of preparation. However, the best beard softener is still water.”
11. The ld. Counsel submits that the above technical literature brings into prominence 2 factors and that is what shaving cream is and whether aerosol shave foam and shave gel are shaving creams or not. He submits that the Consumer’s Dictionary of Cosmetic Ingredients clearly illustrates that there are three products viz. Pre-shave, shaving cream, after shave lotions. Pre-shave, according to the Counsel, are used in an electronic razor and are distinct products. Shaving creams are used with normal razors and the third product – after shave are used for soothening effect of burning in the skin. He submits that the product imported by the Appellants is a shaving cream and, therefore, was covered by EXIM Code 330710.01. He submits that, though, it is a restricted item, but had been permitted to be imported against a SIL. He submits that since the product is Shaving cream which was permitted under the EXIM Code to be imported and cleared under SIL. He, therefore, prays that the product may be classified for purposes of EXIM Code under Heading 330710.01 and may be permitted to be cleared under SIL proposed by the Importer. He, therefore, prays that the Appeal may be allowed.
12. Shri Sanjeev Srivastava, the ld. JDR submitted that shave foam and shave gel are not shaving creams. He submits that for EXIM Code Classification, a product should be so known and traded in the market and since no body treats shave foam and shave gel as shaving creams, nor are they treated as such, therefore, they do not qualify for classification under EXIM Code 330710.01. He submits that the product will no doubt come under EXIM Code Heading 3307, but being not a shaving cream shall require a licence and since no licence was produced by the Importer, therefore, the import was not valid. He reiterated the findings of the ld. Commissioner and prayed that the Appeal may be rejected.
13. We have considered the rival submissions very carefully. We find that for purposes of classification under the EXIM code, the common parlance test is one of the important factors. We find that under EXIM Code Heading 3307, there are two categories of products. The first category is Shaving Cream and the second category is other pre or after shave preparations. The point, therefore, for determination is limited to whether shave foam and shave gel are shaving creams or not. We have also studied the literature about pre-shave and after-shave preparations. We note that pre-shave preparations are essential when using an electronic razor which does not require foam or lather. We have also observed that after shave preparations are used only for soothing the burning feeling on the skin after the shave is over and may contain aromatic substances having perfume etc. We find that the product is neither a pre-shave nor an after-shave preparation and the product is a Shaving Cream. The Department’s contention that the product is not treated as a shaving cream nor known in the common parlance and trade as such, we have to face facts squarely in view of the continuous development of technology. Technological advancements brings into use new products day in and day out. With the advancement of technology, old concepts give way to newer ideas. The product is neither a pre-shave preparation nor and after-shave preparation. It is used as a shaving cream for normal shaving and, therefore, is a shaving cream, classifiable under EXIM Code 330710.01. We hold accordingly.
14. In this view of the matter, we set aside the impugned order and allow the Appeal with consequential relief to the Appellant in accordance with law.