ORDER
C.N.B. Nair, Member (T)
1. The issue raised in these appeals of M/s. Amit Ayurvedic & Cosmetic Products (I) Pvt. Ltd. Daman is the Central Excise Classification of “Parachute Dandruff Solution Coconut Hair Oil” manufactured by them marketed by M/s. Marico Industries Ltd., Mumbai. Manufacturer assessee claimed classification and payment of duty under Chapter sub-heading NO. 3305.10. As against that, the impugned order has held the product to be classifiable under Chapter sub-heading 3305.99. There are consequent demand for duty, interest and imposition of penalties. 2. For better understanding of the dispute, we may extract the relevant tariff Headings :
Heading No. Sub-heading No. Description of goods
3305 Preparations for use on the hair
3305.10 Perfumed hair oils
3305.91 Other : Hair Fixer
3305.99 Other
2. The contention of the appellant is that 3305.10 is specific for “perfumed hair oils and since the appellants product is a hair oil that has been perfumed, it should rightly be classified under the specific heading for it and not under the residuary heading – “others”. As regards the product being perfumed hair oil, it is being pointed out that the composition of the product makes it clear that perfume has been specifically added to coconut oil to make it perfumed hair oil. It is being pointed out that the proposition that the specific should be preferred over the general is well settled. It is also pointed out that Note 6 to Chapter 33 makes it clear that the Note applies to “perfumed hair oils….. Shampoos”. It is also being pointed out that if the Revenue’s contention that the product is to be classified based on its medicinal property of dandruff control, then its classification would go out of Chapter 33 to Chapter 30, which chapter is for pharaceutical products. During the hearing of the case, learned Counsel for the appellants also pointed out that according to the ratio of World Customs Organization Classification Decision also, the product’s classification does not change based on its subsidiary medicinal property. He referred in this connection to the World Customs classification Decisions on shampoos. Learned Counsel pointed out that the Council approved the classification of Shampoos containing 2% Ketoconazole (a synthetic, broad-spectrum antifungal agent), under 3305.10 as “shampoo” and not as pharmaceutical product under heading 30 with the observations as under :
“Although this product was claimed to have therapeutic or prophylactic properties within the meaning of heading 30.04,it was pointed out that it was used in the same manner as any other shampoo and it performed the dual function of washing the hair and treating fungus infections. Therefore, the HSC decided that it should be classified in classified in sub heading 3305.10.
Application of GIR 1, Note 1(D) to Chapter 30 and Note 3 to Chapter 33.”
It is the learned Counsel’s contention that just as a Shampoo did not undergo change in its classification on account of its incidental medication (to control dandruff). The perfumed hair oil also does not change its classification because of its incidental medication (to control dandruff). Learned Counsel has also relied on the decision of this Tribunal in the case of B.K. Products Vs. CCE,. Patna – 1998 (104) ELT 430 (T) in support of his contention that perfumed hair oil merits classification under Chapter sub-heading 3305.10 and not under sub-heading 3003.30.
3. Ld. SDR has canvassed classification under sub-heading 3305.99 based on the fact that the product is marketed and thus, derives its commercial identity, as a “dandruff solution” and not as a perfumed hair oil. During the heading of the case, learned SDR took us through the marketing and other materials relied on in the impugned order in support of the finding that the product goes well beyond being a perfumed hair oil and its standing is as a remover of dandruff. Our attention has been drawn to the observation in the impugned order that the product has been exclusively meant for control/elimination of dandruff and that M/s. Marico Industries Ltd. is advertising and promoting it as “Effective Dandruff Solution and not as Perfumed Hair Oil”. Learned SDR has also pointed out that classification has been determined by the adjudicating authority based on the principle laid down by the Supreme Court in the case of Atul Glass Industries Vs. Collector 1986 (25) ELT 473 (SC) that a consumer buys an article because it performed a its specific function and thus, the primary function of the product should determine its classification. Learned DR has further pointed out that the Commissioner has also taken into account the ineligibility of the product for classification under Chapter 30 while determining the classification. Learned DR has also referred us to the decision of this Tribunal in the case of Vasu Pharmaceuticals Pvt. Ltd. Vs. CCE Vadodara 1999 (111) ELT 625 (T) wherein the Tribunal approved classification under 3305.00 for “Trichup Oil” in support of the adjudication order. However, learned Counsel for the appellants has pointed out that classification of Trichup Oil under 3305.99 was ordered in view of a specific finding that the oil in question has not been perfumed. He has also submitted that for that reason, this order has no application to the present dispute.
4. We have perused the records and have considered the submissions made by both sides. It is scheme of classification under Central Excise Tariff that pharmaceutical products attract classification under Chapter 30, while cosmetics and toilet preparations attract classification under Chapter 33. It is also clear from Note 1(D) to Chapter 30 that the Chapter does not cover “preparations of Chapter 33 even if they have therepeutic or prophylactic properties” (emphasis Added). Thus, incidental, subsidiary, prophylactic or therepeutic properties do not affect the classification of preparations falling under Chapter 33. This is the ratio of the Classification Decision of the World Customs Organisation also – that the presence of a 2% broad-spectrum antifungal agent in a shampoo does not affect the classification of the shampoo under its specific heading 3305.10. Out Central Excise Tariff also makes this position clear when Note 6 under Chapter 33 states that heading No. 3305 applies inter-alia to “perfumed hair oil….. shampoos”. The product under consideration contains piroctone Olamine which gives its anti dandruff property but its presence and the therapeutic property imparted by its to the preparation does not affect its classification. Therefore, it is clear that the impugned order was not right in relying on the anti-fungal property of the product for determining its classification. If that was to be the main consideration for classification, the product would have gone to Chapter 30 but that cannot be, because Note 1(d) shuts the door on that classification. Therefore, classification has to be under 3305 based on its ingredients. The ingredients of this product are Refined coconut Oil and Light Liquid Paraffin. Excipients used in the product include among many other items, “Perfumed Herbal B99315”. The main ingredient being coconut oil, that too with added perfume, the product has a specific identity as “perfumed hair oil”, the very terms of 305.10. It is well settled that the specific should prevail over the general. Since the product has a specific identity as perfumed hair oil, that classification should be preferred to the classification available to preparations for use on the hair in general. 3305.99 is general for preparations for use on the hair. Therefore, 3305.10 as claimed by the assessee is required t be accepted. The decisions brought to out notice also support classification under 3305.10. In B.K. Product’s case, the dispute was whether “Ghrit Kumari Tel should be classified under 3305.10 or under 3003.30. After going through the relevant entries in the tariff, composition and other relevant aspects of the products, the Tribunal held that the correct classification would be as Perfumed Hair Oil under 3305.10. In Vasu Pharmaceuticals Pvt. Ltd. case also, competing clams were under Tariff heading 30.03 and 3305.99. The Tribunal accepted the classification under 3305.99 since the Hair Oil in question was admittedly not Perfumed Hair Oil. 3305.10 is specifically for “perfumed Hair Oil, It would not admit humble hari oils. It would admit only the sweet smelling. Thus, the entry specifically shuts its door to non-perfumed hair oils. Therefore, Trichup oil had to be contend in the company of the generality of hair oils.
5. In the view we have taken above, the “Parachute Dandruff Solution Coconut Oil” is correctly classifiable under 3305.10. The finding in the impugned order that its classification is under 3305.99 is not correct. The demand for duty, interest and penalties imposed pursuant to the incorrect order of classification are not sustainable. appeals succeed and are allowed with consequential relief, if any, to the appellants.