COMMISSIONER OF CENTRAL EXCISE, SURAT versus M/S. ZANDU PHARMACEUTICAL WORKS LTD.

Citation: [2006] SUPP. 8 S.C.R. 1057 · Decided: 10-11-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

COMMISSIONER OF CENTRAL EXCISE, SURAT 
v. 
MIS. ZANDU PHARMACEUTICAL WORKS LTD. 
NOVEMBER 10, 2006 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
Central Excise Tariff Act, 1985: SH 3003.39, 3305.10 and 3305.99-
Hair oil manufactured by assessee containing perfame-Held: classified as 
perfumed hair oil under SH: 3305. I 0. 
A 
B 
Respondent-assessee had been manufacturing hair oil under the brand C 
name of'Alma Iio' and classifying it under CETA: SH: 3003.39 as Ayurvedic 
Medicament. The Department sought its classification under SH: 3305.99. 
Before the assessing authority, assessee disclosed the ingredients and 
manufacturing process of the p1oduct. Assessing Authority classified the 
product under H: 3305.99 as cosmetic product. Aggrieved assessee filed D 
appeal, which was dismissed. On further appeal, Tribunal classified the product 
under SH: 3305.10 as perfumed hair oil. Aggrieved by the order, Department 
filed the present appeal. 
Dismissing the appeal, the Court 
HELD: No appeal has been filed by assessee against the order of the E 
Tribunal refusing to classify the product of assessee as an Ayurvedic 
Medicament. Therefore, only contention is whether the product of assessee 
is a 'perfumed hair oil'. Indisputably, perfume is added. Addition of perfume 
is a part of manufacturing process. It is one of the ingredients of the product. 
Therefore without going into the question as to whether the product of assessee F 
has any therapeutic value or not, the judgment of the Tribunal is upheld. 
11063-D-F) 
Commissioner of Central Excise, Calcutta v. Sharma Chemical Works, 
12003) 5 SCC 60; Alpine Industries v. Collector of Central Excise, New Delhi, 
(2003) 152 E.L.T.16 (SC), Commissioner of Central Excise, Cochin v. Kera/a 
Ayurvedic Pharmacy Ltd., (2005) 187 E.L.T.29 and Puma Ayurvedic Herbal G 
(P.) Ltd. v. Commissioner, Central Excise, Nagpur, (2006) 196 E.L.T.3 (SC), 
referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No.7849 of2004. 
From the final Order No.387/2004-B dated 26-5-2004 of the Customs, 
1057 
II 
1058 
SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R. 
A Excise & Service Tax Appellate Tribunal, New Delhi in Appeal No.E/20I4/03-
NB (8). 
Mohan Kumar Parasaran, A.S.G., Ms. Sandhya Goswami and B. Krishna 
Prasad, for the Appellant. 
B 
Madhav Rao, Alok Yadav and Rajesh Kumar, for the Respondent. 
The Judgment of the Court was delivered by 
S.B. SINHA, J: Respondent herein manufacture hair oil under the brand 
name of"Alma Lio". It was classified under SH No.3003.39 of the Schedule 
C appended to the Central Excise Tariff Act, I985 (for short, 'the 1985 Act'). 
The said entry provides for excise duty at the rate of 8% ad valorem being 
Ayurvedic Medicament. A show cause notice was issued as to why the said 
product shall not be classified under SH No.3305.99 being a cosmetic product 
attracting excise duty at the rate of 30% ad valorem. It was alleged that by 
D wrong classification of its product there had been a short payment of central 
excise duty amounting to Rs. I I, 12, 129/-. A demand of the said amount in 
terms of Rule 9(2) of the Central Excise Rules, 1944 (for short, 'the Rules') 
read wi~h section I IA of the Central Excise Act, 1944 (for short, 'the I944 
Act') was issued. A penal action in terms of rule 173-Q of Rules was also 
proposed: Cause having been shown by Respondent, the matter was heard 
E by the Deputy Commissioner, who opined that the product was classifiable 
under SH 3305.99 of the 1985 Act. Respondent was directed to make good the 
short payment. A penalty of 
Rs.l l,12,129/- was also imposed upon it 
together with interest. An o::der for recovery of interest under section 11 AB 
of the 1944 Act was also passed. The appea: preferred by Respondent before 
the Commissioner (Appeals) was dismissed by an order dated 17.4.2003. He, 
F however, opined that the product being not perfumed and being hair tonic, 
and as such different from hair oil, could be classified under Chapter Heading 
No.3305.99 falling in the residuary group. He also directed valuation of the 
goods to be done under Section 4A of the 1944 Act. On a further appeal 
made by Respondent before the Tribunal, the product was held to be 
G classifiable under SH-3305. IC as 'perfumed hair oil'. The matter was remanded 
to the Adjudicating Authority for recomputing the duty of excise payable. 
Appellant is, thus, before us. 
Mr. Mohan Parasharan, the learned Additional Solicitor General oflndia, 
H appearing on beha

Excerpt shown. Read the full judgment & AI analysis in Lexace.