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 prior to 27-2-1986 the appellants product 'Rita' was being assessed as 'Perfumed hair oil' under Item 14(ii)(b) of the erstwhile Central Excise Tariff on the basis of the approved classification list. On 6-3-1985 the appellants filed a revised classification list claiming the product 'Rita' as classifiable under Tariff Item 68 on the grounds that by itself 'Rita' was only a concentrate which could be used as hair oil only after mixing it with certain oils like Coconut oil or Gingly Oil. On the same grounds the appellants also preferred a refund claim on 30-3-1985 in respect of the differential duty paid during the period 23-7-1982 to 22-3-1985. They contended that unmixed products which were not directly used like that of the appellants became exigible only with effect from 17-3-1985 when Explanation III was added to Item 14F of the Tariff. However, on the grounds that the product in question was being marketed by the appellants as a 'hair oil' and was also known to their dealers and consumers as a hair oil the Assistant Collector held that it was correctly classifiable under Tariff Item 14F. For these reasons and also on the ground that a part of the claim for refund of duty pertained to the period beyond the period of six months, the Assistant Collector rejected the refund claim filed by the appellants. Being aggrieved by the Order passed by the Assistant Collector the appellants preferred an appeal before the Collector (Appeals) who while rejecting the appeal by the impugned order dated 25-8-1.987 did not go into question whether the appellants claim was time barred. The Collector (Appeals) observed that the appellants product being hair oil in concentrated form was covered by Tariff Item 14(ii)(b) even prior to the insertion of 'Explanation III' in Tariff Item 14F with effect from 17-3-1985.

2. On behalf of the appellants the learned Consultants S/Shri P.C. Srinivasan and Vijay Raghavan appeared before us. Shri Srinivasan stated that the finding of the lower authorities that the appellants product marketed under the trade name 'Rita' was a perfumed hair oil was erroneous since it was neither an oil for the care of hair nor was it perfumed. He added that the product in question being a concentrate was not covered by Tariff Item 14F since it could not be used without mixing with other oils such as coconut oil/Castor oil. He further contended that the product in question was not covered by Tariff Item 14F(ii)(b) also for the reason that it had a perfume because of the presence of certain volatile oils such as lemon grass oil and citronella oil and not on account of any perfume having been imparted to it in any positive or deliberate way. In this regard he placed reliance on the decision of the Bombay High Court in the case of Ramthirth Yogashram v. State of Maharashtra reported in 1968 (22) STC 76 . He stated that on the cartons in which this disputed product was sold and also on the literature supplied along with the goods the manufacturers had not claimed that the product was a perfumed hair oil instead it was simply described as 'Rita' compound. He contended that the marketing of the product in very small packings of only 20 ML was indicative of the fact it was only a concentrate and could not be categorised as a 'hair oil' which is normally marketed in much larger packings. He stated that even in the Indian Standard Specification for Hair Oil (First Reprint May 1980), hair oil concentrates have been treated as different products. He argued that the appellants product which was a concentrate could be deemed to have become exigible only after the enlargement of the scope of Tariff Item 14F so as to include in its fold even unmixed products by virtue of the 'Explanation' which was added to this item with effect from 17-3-1985. On these grounds he pleaded