I.J. Rao, Member (T)

1. The question that arises in this appeal is whether the product namely "mediker" manufactured by the respondents is used as a shampoo or even as a medicated soap or whether it is used as treatment for lice. Answer to all these will decide on the classification of the product. Both sides produced before us extensive literature to which we will be referring later on. We also witnessed a film shown to us by the respondents.

2. Very briefly the background of the matter is that the Assistant Collector of Central Excise passed an order classifying Mediker under sub-heading 3005.90 considering it as a preparation for use on the hair. The respondents filed an appeal before the Collector of Central Excise (Appeals) who ordered the classification under 3003.10. The Revenue thereafter filed this appeal before us.

3. Shri Sunder Rajan, the learned DR after referring entries in the tariff submitted that the product Mediker is a preparation for use on the hair. He drew our attention to the label appearing on every bottle of Mediker. This label is reproduced below:

"Mediker

ANTI-LICE TREATMENT

DIRECTION FOR USE

Shampoo hair with one capful of Mediker, Massage scalp for 3 minutes Rinse, Repeat. This usually eliminates Lice. For best results repeat shampooing 2 days later.

WARNING

The product is toxic if swallowed. Store far from food and drinking water. Keep away from children and pets. If it gets into the eyes wash affected area immediately with clean water

COMPOSITION

D-Phenothrin EP 0.23% W/V

Triclosan E.P. 0.05% W/V

base q.s.

MEDIKER is the registered trade mark of

Richardson - Vicks Inc.

Manufactured by

PROCTER & GAMBLE INDIA LIMITED

BOMBAY 400011

Licenced Users of the Trademark

Contents 45ml Mfg. Lic No. 526/A/AP

Retail price not to exceed Rs. 9.60

Local Tax extra)

FOR EXTERNAL USE ONLY

MADE IN INDIA

Expiry date 2 years from the date of Mfg. Batch No. 8969 Date of Mfg. 12/88."

The learned DR further submitted that the active ingredient in Mediker namely D-Phenothrin EP is not mentioned in any Pharmacopoeia or chemical dictionaries. He submitted that the label on the product itself clearly says that one should shampoo the hair with mediker for eliminating lice. Therefore, prima facie it is a shampoo. He further submitted that according to the Chemical Examiner's opinion, the product consisted predominantly of surface active agent and a very small quantity of D-Phenothrin. Thereafter he invited our attention to Chapter Note 2 to Chapter 33 of the first Schedule to emphasise that the Headings 33.03 to 33.07 cover all the products which are suitable for the use, as goods of these headings whether or not they contain subsidiary pharmaceutical or antiseptic constituents or held out as having subsidiary curative or prophylactic values. The learned DR relied on Chapter Note No. 6 to Chapter 33 to argue that the Heading 33.05 covers the following products namely: brilliantines, perfumed hair oils, hair lotions, pomades and creams, hair dyes, and shampoos, whether or not containing soap or organic surface active agents. In addition he also relied on Chapter Note 1(d) to Chapter 30 to argue that the preparations of Chapter 33 even if they have therapeutic or prophylatic properties are to be excluded from Chapter 30. He gave the example of medicated soap and submitted that the product was not classifiable under Chapter 30 even though it had some medicinal value.

4. Shri Sunder Rajan further submitted that though before the Collector (Appeals) the respondents took the plea that the Assistant Collector did not convey to them the Chemical Examiner's opinion, they gave up the plea and sought a decision on merits. Therefore, he argued, the respondents cannot plead violation of the principles of natural justice in the course of their arguments in this appeal.

5. Referring to the alternative plea of the respondents for classification of the product under Heading 38.08 as "insecticides", the learned DR submitted that insecticides are applied and us