P.K. Kapoor, Member (T)

1. This is an appeal against the order passed by the Collector of Central Excise (Appeals), Madras. Briefly stated the facts of the case are that the respondents are engaged in the manufacture of various types of pencils viz., writing pencils, colour pencils, eyebrow pencils, and kum kum pencils. The Assistant Collector issued a notice dated 13-3-1991 requiring the respondents to show cause as to why kum kum pencils manufactured by them should not be classified under Heading 3304.00 of the Central Excise Tariff and why in respect of such pencils the benefit of the Notification No. 323/86 dated 22-5-1986 should not be denied to them. Thereafter by his order dated 14-10-1991 the Assistant Collector held that kum kum pencils and eye brow pencils are one and the same product since they have identical composition. He also held kum kum pencils were classifiable under Heading 3304.00 and they were not eligible for exemption under Notification No. 323/86 dated 22-5-1986. Being aggrieved by the order passed by the Assistant Collector, the respondents preferred an appeal before the Collector Central Excise (Appeals) who by the impugned order held that kum kum pencils and eye brow pencils were different products having different composition and use. The Collector (Appeals) also held that kum kum pencils were classifiable under Heading 3307.90 and were eligible for exemption under Notification No. 323/86 dated 22-5-1986. Being aggrieved by the order passed by the Collector (Appeals) the Department has come up in appeal before us.

2. On behalf of the appellant Shri L.N. Murthy, learned JDR appeared before us. He stated that in arriving at the finding that kum kum pencils were classifiable under Heading 3307.90 and eligible for exemption under Notification No. 323/86 dated 22-5-1986 the Collector (Appeals) had mainly relied upon the judgment of the Bombay High Court in the case of Commissioner of Sales Tax, Maharashtra State, Bombay v. La-Bela Products reported in 1985 (5) ECC 232. He added that in the case of La Bela Products the question that arose for consideration by the High Court was whether auto-sticking "Bindis" sold under the name of "Beauty Spots" would be exempted from Sales Tax by virtue of being covered by entry 32 of Schedule A to the Bombay Sales Tax Act which read as "Kum Kum (including liquid kum-kum)" or they had to be deemed as covered by Entry 7 of Schedule E of the said Act which read as "Toilet articles including hair cream, hair tonic and hair oil (but excluding soap, tooth powder and tooth paste)". He contended that the Bombay High Court's decision relied upon by the Collector (Appeals) was not relevant since, entry 32 of Schedule A of Bombay Sales Tax covering "Kum Kum (including liquid Kum Kum)" was much wider in scope than the entry "Kum Kum" in Notification No. 323/86 dated 22-5-1986 and also for the reason that it is not permissible to construe a particular statute according to other analogous legislations. In this regard he placed reliance on the decision of the Madras High Court in the case of Venkateswara Stainless Steel and Industries, Madras v. Union of India reported in MANU/TN/0046/1986 : 1986 (26) E.L.T. 201. He argued that the Kum Kum pencils in question being in the nature of beauty or make up preparations like the eye brow pencils were more specifically covered by the Heading 33.04 and could not be deemed as Cosmetics or Toilet preparation falling under the residuary Heading 37.07. He contended that the Kum Kum pencils were not classifiable under Heading 37.07 which was specified in Notification No. 323/86. He added that such pencils being in the nature of articles and not plain 'Kum Kum' as commonly understood could not be deemed as covered by Notification which covered 'Kum Kum' and not Kum-Kum in all its forms. In support of his contention he cited the decision of the Supreme Court in the case of Hans Raj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise, Sur