ORDER
Jyoti Balasundaram, Member (J)
1. The Revenue assails the order passed by the Collector of Central Excise (Appeals), Bombay classifying the product Wet Detergent Cleansing Tissues with the brand name ‘Fresh Ones’ under sub-heading 3401.30 of the Central Excise Tariff Act, 1985 -the Department seeks classification of the same under sub-heading 3307.90.
2. The respondents are engaged in the manufacture of pre-moistered detergent tissues under the brand name ‘Fresh Ones’, the classification for which was approved earlier by the Assistant Collector under sub-heading 3401.30 attracting duty at the rate of 15% ad valorem. For the year 1989-90, the respondents filed classification list 53/89 effective from 1-4-1989 and this list was approved by holding the product to be classifiable under sub-heading 3307.90 attracting duty at the rate of 105% ad valorem. The lower Appellate authority held that the product was ‘paper impregnated with detergent’ falling for classification under sub-heading 3401.30 and not a Cosmetic or Toilet preparation falling under sub-heading 3307.90. Hence this appeal.
3. We have heard Shri J.M. Sharma, learned DR and Shri A.N. Haksar, learned Sr. Counsel appearing along with Shri Rajesh Kumar, learned Advocate. The process of manufacture of the item in dispute is as follows:
Dry tissues which are imported cut to shape and size, are inserted manually in a plastic container and a pre-mix of liquid is poured on to it manually in measured quantity. Then the container is closed, labelled and packed. The pre-mix is prepared as follows:
Ordinary water is first demineralised and then the detergents, preservatives and aromatic compounds are added in the water and stirred manually. Various types of detergent like Hyoxyd-45, Dampolen, Acid Slurry based detergent, non-ionic detergent etc. are used in various combinations. The composition of various constituents of pre-mix in one batch of 65 liters as stated by Shri Ramesh Tainwala, Managing Director of the respondents company, in his statement dated 11-4-1989 (recorded in connection with investigation resulting in issue of show cause notice dated 30-3-1990 by Collector of Central Excise, Bombay-I and adjudication order dated 30th April, 1991 dropping proposed demand for Rs. l,84,66,273.88p. for the period April, 1986 to February, 1990) is as under :-
___________________________________________________________________ 1. Detergent 4% to 9% (2.5 Lt. to 5 Lt.) 2. Preservative (a) Methyl Parabene 125 grams (b) Propyl Parabene 250 grams (c) Bronopol 500 grams (d) Iso Propyl Alcohol 3 to 7 Litres (e) Solvex 5 Litres 3. Aromatic Compound 250 to 375 CC 4. Water Balance ___________________________________________________________________ Total one batch 65 litres ___________________________________________________________________
4. The Deputy Chief Chemist analysed the samples of the wet detergent cleansing tissues and reported that ‘a sample is in the form of rolls of tissue paper moistened with a composition consisting of perfumery and surface active materials, water and organic solvent and enclosed in unit containers with provisions for continuous delivery of tissue paper, as required.’
Note : ‘The liquid portion has the general composition of cleaning lotion or cleaning milks which are described in technical books as cosmetics. The products can therefore, be treated as tissue paper impregnated with cosmetics’.
The composition of tissue paper was found to be as under:
“4.1.3 Composition of tissue papers
(a) Paper content 32-35%
(b) Moistening Liquid content 65-68%,
(c) Perfumery, Surface active agents and other non-volatiles contained 3.4 to 4.7% in the moistening liquid
4.1.4 The surface active agent is indicated to be a mixture containing Anionics and non-ionics
4.1.5 For Liquid Premix, the test report indicates that:
“The sample is a heterogeneous mixture comprising water, organic solvents, surface active agents, polyols and perfumery materials.”
4.1.6 The percentage of various constituents of the premix is as under:
(1) Non Volatiles (including non-volatiles, perfumes, surface active agent, etc.) 5.6%
(2) Water, solvents and other Volatiles 94.4%
The surface active agent is indicated to be a mixture containing Anionics and non-ionics.”
5. From the above, it is seen that the pre-mix contains a variety of inputs, of which surface active agents comprise only a small percentage as confirmed by the chemical test and their use in cosmetics is to provide a solubilising effect over aqueous solvent and perfume. The case of the Department, as highlighted by Shri J.M. Sharma, learned DR is that pre-mix contains all the properties of cleansing lotions/anti-perspirants/deodorants and the tissue paper acts as a vehicle for the direct use of the liquid formulations and therefore, the disputed item is tissue paper impregnated with cosmetics, classifying under sub-heading 3307.90 which covers ‘pre-shave, shaving or after shaving preparations…., personally deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included….’
In short, the Department seeks to treat the product as cosmetic or toilet preparation.
6. The scope of Heading 33.07 is explained by Notes 2 and 3 of Chapter 33 which reads as under:
Chapter Note No. 2 :
“Heading Nos. 33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils) suitable for use as goods of these headings and put up in packings with labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialised to such use and includes products, whether or not they contain subsidiary pharmaceutical or antiseptics constituents, or are held out as having subsidiary curative or prophylactic value.”
Chapter Note No. 3 :
The ‘perfumery, cosmetic or toilet preparations’ in Heading 33.07 applies inter alia to the following products :
“Scented sachets, perfumed paper and papers impregnated or coated with cosmetics, contact lens or artificial eye solutions; wadding, felt and non-wovens, impregnated, coated or covered with perfume or covered with perfume or cosmetics, animal toilet preparation”.
7. The function of Cosmetics is to clean, beautify, promote attractive ness or protect the skin and since the labels on small packs of ‘fresh ones’ describe the goods as ‘Intimate Wet Cleansing Tissues’, specially formulated to cleanse and refresh intimate parts of your body like underarms, gentle, soothing soft, safe and hygienic, the Revenue submits that the product possesses the required characteristics of cosmetics like cleansing, beautifying, promoting attractiveness etc. We find that classification under heading 33.07 would be applicable if the tissues are impregnated with cosmetics. However, the product in dispute has been found to be tissues impregnated with highly diluted solution of detergents. Detergents are generally used for washing. The disputed product is to clean hands, face etc. to remove dust, grease, etc. when one is away from soap and water. In the adjudication order dated 30-4-1991, the contention of the appellants that the pre-mix contains nearly 90% to 95% water thus obviating the necessity of use of water after use of ‘fresh ones’, has been accepted and the further contention that since the detergent solution does not contain foam booster or foaming agents and also contains more than 90% water, further use of water is not required, has also been accepted and in the present case, this position is not disputed by the Department.
8. The HSN Explanatory Notes to Chapter 33 excludes soap or other products of Heading 34.01 from coverage under Chapter 33. The HSN Explanatory notes clearly state that Chapter 33 does not cover ‘soaps and waddings, felt and non-wovens, impregnated, coated or covered with soap or detergent (Heading 3401)’. Since the disputed product is admittedly tissue impregnated with detergents, classification under Heading 3307 of the Central Excises Tariff Act, 1985 is ruled out, even though the product is perfumed.
9. Having ruled out classification under Heading 3307, let us now turn to the rival entry viz. sub-heading 3401.30. This heading covers ‘paper, wadding, felt and non-woven, impregnated, coated or covered with soap, detergent’. The HSN Explanatory notes to Heading 3401 states that this part covers wadding, felt and non-woven, impregnated, coated or covered with soap or detergent whether or not perfumed or put for retail sale and that these products are generally used for washing hands and face. The heading excludes paper, wadding, felt and non-woven, simply perfumed (Chapter 33). Soaps which are perfumed are also called soaps and not cosmetics. Even though soaps also clean, beautify, promote attractiveness, they are not treated as cosmetics within the meaning of cosmetics and toilet preparations covered by Heading 3307 (Note 1.A to Chapter 33 excludes soaps or other products of Heading 3301 from the scope of Chapter 33). The Collector of Central Excise, Bombay has held in his order dated 30-4-1991 that generally a cosmetic preparation is sold in the market like cleansing milk or cleansing lotion, would contain a much lower water content than found in the disputed product (90 to 95%) and would contain either a very high percentage of humectants like glycerin, sorbitol, oil of Ulay etc. for cleansing milk or ethyl alcohol for cleansing lotion while the disputed product does not contain any humectants (moistur-isers) in the pre-mix in which the tissue paper is dipped, as seen from the report of the Deputy Chief Chemist.
10. The learned DR points out that the HSN refers to products covered by Heading 3401 as being those which are generally used for washing hands or face, while the product in question cannot be said to be for such use as the use of ‘Fresh Ones’ is not followed by use of water; however, this contention is without substance as the product itself contains more than 90% of water and also does not contain foam boosters or foaming agent so as to avoid use of water after use of ‘Fresh Ones’.
11. From the above discussion, it is evident that both on the basis of composition and physical identity, the product is more appropriately classifiable under sub-heading 3401.30 which inter alia specifically covers paper, impregnated with detergent. This conclusion is fortified by the certificate dated 8-12-1986 issued by the Food and Drug Administration, State of Maharashtra that the respondents’ product does not fall under the definition of Cosmetics. In the result, we hold that the product in dispute ‘Fresh Ones’ falls for classification under sub-heading 3401.30 of the Schedule to the Central Excise Tariff Act, 1985, uphold the impugned order and reject the appeal.