Per Archana Wadhwa:

Being aggrieved with the order passed by the Commissioner (Appeals), vide which he has classified the respondent's product i.e. "Coconut Oil" under Heading 1503.00 as against the revenue's contention of classifying the same under Chapter 33, revenue has filed the present appeal.

2. After hearing both sides duly represented by Shri S.S. Bhagat, Ld. SDR for the revenue and Shri A.S. Kulkarni, Ld. Advocate, it is seen that the respondents are engaged in the manufacture of edible grade coconut oil under the brand name "Para-care" and Vitamin E was being added in the same. The oil was then re-packed in small plastic bottles of 50 Ml. 100 Ml. 200 Ml. and 500 Ml. It is seen that for a limited period i.e. from 15.06.99 to 29.06.99, they also advertised the product by printing on the bottles as "enriched with Vitamin E and keeping fresh for a longer time vitalize of skin and hair". Since the coconut oil was of a edible grade, the above advertisement was objected to by the Food Drug Authorities (FDA) and was removed.

3. The Commissioner (Appeals) has held that the addition of Vitamin E, which is permitted under the Prevention of Food Adulteration Act, 1955, would not take the coconut oil from the category of edible product and would not make the same as a preparation for use on hair unless other ingredients like perfume, liquid paraffin, etc. are added. Though during the relevant period there is no test report or expert opinion, one sample of the product was drawn on 19.07.99 and was reported to be fixed vegetable oil (coconut oil) in the form of colourless oily liquid in original unit packing bearing brand name "Para Care Coconut Oil". The appellate authority has observed that packing does not give any indication for use as cosmetic or toilet preparation Note 2 of Chapter 33, lays down three conditions for classifying the product under Chapter 33. These conditions are (i) suitability for use as goods of these headings, (ii) packing/label/literature should be indicative of their use as cosmetics or toilet preparations. (iii) put up in a form clearly specialized to such use.

4. In as much as the product in question was in the natural form and only Vitamin E is added and repacked, the same cannot be held to be a cosmetics or toilet preparation or preparation of type covered under Chapter note 6 to Chapter 33. He has also relied upon the Tribunal's decision in the case of Kothari Products Ltd. Vs. CCE, Kanpur, reported in 2001 (47) RLT 173 (CEGAT-Del.)=2002 (139) ELT 633 (T-Del). He has also taken note of the facts that there was a little mis-declaration/advertisement for a very short period on the outside of the bottles but the predominant advertisement on the label was with regard to its use as edible grade coconut oil. If the appellants have also advertised that the oil in question is good for skin and hair, that will not take away the essential character of the goods as edible grade is printed on the packing of the goods. Reference has also been made to Delhi Collectorate Trade Notice I/CX.33/87 dated 02.02.88 reported in 1988 (33) ELTT-33 clarifying that mixture of essential oils with fixed vegetable oils and other ingredients, which are capable of being used on the hair as perfumed oil would be classifiable under Chapter sub-heading 3305.10 as perfumed hair oil, as they are used as such. Inasmuch as the condition laid down in the said Trade Notice are not satisfied in the assessee's case, he has held the goods to be classifiable under Chapter 15.

5. As against the above, the revenue has contended that it is the common parlance test, which has to be adopted for classifying the product and inasmuch as the product in question is mainly used as hair oil, the same should be classified under Chapter 33. Coconut oil, having multiple use, has to be treated as cosmetics or hair oil when packed in containers for the purposes of application on hair. Reference has been made to the Tribunal's decision in the case of British