ORDER
V.K. Agrawal, Member (T)
1. In these two appeals issue involved is about the classification of ‘Sanifresh lavatory disinfectant’ (both liquid and solid) manufactured by M/s. Balsara Hygiene Products Ltd. As both appeals involve common issue arising out of a common order-in-appeal, the same are being disposed of by a common order.
2. The Appellants claimed classification of the impugned product under sub-heading 3808.90 of the Schedule to the Central Excise Tariff Act in their classification lists No. 1/91-92, dated 1-4-1991 and 11-4-1991. Both the classification lists were approved by the Assistant Collector, Bhandup and Thane. The Collector reviewed the approval under Section 35E(2) of the Central Excise Act and, on appeals being filed, the Collector (Appeals) Bombay set aside the approval and classified the impugned products under sub-heading No. 3402.90 holding that though the impugned products had some disinfectant properties, they were used for cleaning of sanitarywares in the lavatory; that when the products were used to clean lavatory, then as a result of use of these products, germs in the lavatory also got killed; that the contention that the main purpose for using the impugned product was to kill the germs in the lavatory and not to clean the lavatory did not stand to reason. Hence these two appeals.
3. Shri P.M. Joshi, learned Advocate submitted at the outset that both the classification lists were approved on 8-5-1991 and 24-4-1991 whereas the sample was drawn only on 27-6-1991 and the chemical examiner’s report is dated 31-7-1991; that as such the review order issued by the Collector under Section 35E(2) of the Central Excise Act could not be issued based on such test report; that as the Collector had reviewed the classification lists based on test report, the review orders were bad in law. The learned SDR Shri Satnam Singh submitted that the review orders were not solely based on the test report of the chemical examiner; that the Collector had considered the Technical literature as well as Explanatory Notes of HSN while reviewing the classification lists.
4. We observe that the learned SDR has rightly submitted that the review orders of the Collector were not based solely on the findings of the Chemical Examiner’s Test Report as he had ordered filing of applications with the Collector (Appeals) for setting aside the approval of classification lists after taking into consideration the Technical Book and referring to the Explanatory notes contained in HSN. Accordingly we reject the preliminary objection of the learned Advocate and hold that review orders were not bad in law.
5. The learned Advocate, arguing on merit of the case, submitted that the main raw material for their product ‘sanifresh lavatory disinfectant (powder) is ‘sodium bisulphate’ which forms 85% of the product; that the sodium bisulphate is a disinfectant which is evident from Condensed Chemical Dictionary by Hawley; that according to the said dictionary, the uses of sodium bisulphate are flux for decomposing minerals; substitute for sulphuric acid in dyeing, disinfectant, manufacture of sodium hydrosulfide, etc. He further, submitted that chemical examiner had given his test reports without carrying out a test, called Riedal Walkar coefficient’ (RWC), that such a test could be carried out only by a qualified Micro Biologist and not by a chemist. He mentioned that the appellants had sent samples (powder and liquid) to the National Chemical Laboratory, Pune which had opined that the samples had disinfectant properties; that they had confirmed the bactericidal properties by indicating the RWC values of both the samples; that they had tested both the products for disinfectant properties on two bacterial cultures, namely, Es-chirichia Coli and Pseudomonas Sp. for their bacterial effect at varying concentrations and confirmed their effectiveness even at a dilution of 1:125 for 10 minute contact period. He also mentioned that the report from NCL, Pune is from Govt. Laboratory and cannot be overlooked. He further mentioned that it is apparent from the report of the Chemical Examiner that no facility was available on the laboratory to test the sample for its disinfectant power by RWC method. He also mentioned that there are reports from other laboratories which categorically stated that both liquid and powder sanifresh lavatory disinfectant are disinfectants. He referred to the Report, dated 16-9-1991 from Italab Pvt. Ltd. Industrial Testing & Analytical Laboratories, Bombay and Micro Care, Thane. In addition, Assistant Commissioner, division I, Thane in order, dated 21-4-1998 had classified their product (liquid) in question under sub-heading 3808.90. Similarly, Assistant Commissioner, Division VI, Bombay has classified their product under sub-heading 3808.90 in Order No. 388/RCB/97-98 dated 10-3-1998. He also contended that both the products are marketed as disinfectants; that consumers buy these products as disinfectants as they have got disinfectant use and it is settled law that in the matter of classification, popular and commercial meaning should be taken into consideration
6. In respect of product “Sanifresh lavatory disinfectant (liquid), he mentioned that the main raw material is Hydrochloric Acid which constitutes 30% of the product and phenol which constitutes 10% provides the disinfectant quality to the product. He referred to all the test reports including the Test Report from National Chemical Laboratory according to which the impugned product is a disinfectant.
7. He further contended that word ‘cleaning’ means separating dirt from the basis surface and no chemical action is required whereas the word ‘disinfectant’ means a substance used on inanimate objects which destroys harmful micro-organisms or inhibits their activities; that disinfectant cannot be equated with Insecticides; that disinfectants are preparations for general disinfection purposes and are used in bathrooms, gutters, floor cleaning etc. He also referred to page 529 of the HSN according to which “disinfectants are agents which destroy or irreversibly inactivate undesirable bacteria, viruses or other micro-organisms, generally on inanimate objects. Disinfectants are used, for example, in hospitals for cleaning walls, etc., or sterilising instruments. Finally he relied upon the decision of the Supreme Court in the case of Bombay Chemical Pvt. Ltd. v. Collector of Central Excise, 1995 (77) E.L.T. 3 (S.C.) in which it was held that “A ‘disinfectant’ which, therefore, is used for killing may broadly be covered in the word ‘pesticide’. Disinfectants may be of two types; one to disinfectant and other to destroy the germs. The former, i.e., those products which are used as disinfectants for instance lavender, etc. may not be covered in the expression ‘pesticide’. But those products which are used for killing insects by use of substances such as high boiling tar acids have the same characteristic as ‘pesticides’.” The learned Counsel submitted that in Bengal Chemical case, the Apex Court held that the goods produced from Phenolic Compounds and high boiling tar acid being disinfectant fluids which have the capacity of killing bacterial are pesticides.
8. Countering the arguments, Shri Satnam Singh, learned SDR, submitted that the description mentioned on the plastic container in which product is packed, is that sanifresh lavatory disinfectant cleans the toilet, removes stains, kills germs and freshens the air and it is thus evident that the product in question is actually used for cleaning of sanitary wares in the lavatory and as a result of use of these products, germs also got killed. He also mentioned that the product, being simple mixture, its ingredients retain their individual properties; that sodium bisulphate has properties of cleaning agent and is used as a cleaner; that it is also having comparatively low germicidal properties (being displayed by its weak acidic nature); that the cleaning properties of sodium bisulphate was having predominance over its germicidal properties. After referring to Hawley’s Condensed Chemical Dictionary and Concise Chemical and Technical Dictionary by H. Bennett regarding Hydrochloric acid, the learned SDR Contended that there is no mention of hydrochloric acid being used as a disinfectant. On the other hand, because of the strong acidic nature and corrosive action, it displays germicidal properties depending upon their concentration. Nonyl Phenol which is used in manufacturing sanifresh liquid, is used as surfactant and the major use of the impugned product (liquid) is for cleaning the toilet bowl. He also mentioned that there is variation in RWC Value of the product in powder and liquid form according to the Reports from National Chemical Laboratory. Further as per report from Micro Care if the concentration is less than 10%, it would not be disinfectant. The concentration of the product has not been brought on record. Finally, he submitted that as per Explanatory Notes of HSN under Heading 34.02, the heading includes cleaning or degreasing preparations which includes “Acid or alkaline cleaners specially formulated for cleaning sanitary ware, frying pans, etc….” Thus the product formulated for cleaning sanitary ware is more appropriately classifiable under sub-heading 3402.90. He also submitted that HSN Note IV under Heading 38.08 excludes “preparations covered by more specific headings of the Nomenclatures or having subsidiary disinfecting, insecticidal, etc. properties.” In reply, the learned Advocate submitted that it is clear from the description mentioned on the container that the product is meant only for lavatories only and it kills germs. As far as product in liquid form is concerned, he submitted that corrosive and germicidal properties of hydrochloric along with Nonyl Phenol acts as disinfectant ; that Assistant Commissioner Thane in Order, dated 21-4-1998 which pertains to sanifresh lavatory disinfectant (liquid), has held that the primary function is disinfectant and is classifiable under sub-heading 3808.90 and not 3402.90.
9. We have considered the submissions of both the sides. The Revenue wants to classify the impugned product as cleaning Preparations under subheading 3402.90 whereas the appellants want to classify them under sub-heading 3808.90 as disinfectants. The appellants have emphasized the fact that sanifresh lavatory disinfectant (Powder) consists mainly of sodium bisulphate (85) which by itself is a disinfectant according to Hawley’s Condensed Chemical Dictionary. It is observed that Commissioner (Appeals) has himself observed in the impugned order that “department accepts that the subject products have got disinfectant properties and that this is because of certain chemicals which are ingredients of the subject products.” The test results obtained by the appellants from National Chemical Laboratory reveal that both the products are disinfectant. These test reports were obtained after performing RWC test. We observe that it is clearly mentioned in the Dy. Chief Chemist’s report that “there is no facility available here in the laboratory to use the sample for its disinfectant power by Rideal Walker method….” The Revenue has not adduced any test report or any other evidence to controvert the findings given in the test reports given by National Chemical Laboratory. Similarly, the product in liquid form contains hydrochloric acid and Nonyl Phenol. One of the uses of Phenol is fungicides antioxidants. We also find that Explanatory Notes of HSN below Heading 38.08 mention that disinfectants are agents which destroy or irreversibly inactivate undesirable bacteria, viruses or other micro organisms. The test reports adduced by the appellants confirmed the bactericidal properties of both the impugned products. The appellants have succeeded in showing that the products in question are disinfectant classifiable under sub-heading 3808.90 of CETA. Accordingly, we allow both the appeals filed by the appellants.