LexGODREJ INDUSTRIES LTD versus D.G. AHIRE ASSISTANT COLLECTOR OF CENTRAL EXCISE & ANOTHER
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[2008] 10 S.C.R. 570 '1- A GODREJ INDUSTRIES LTD. v. D.G. AHIRE ASSISTANT COLLECTOR OF CENTRAL EXCISE & ANOTHER (Civil Appeal No. 228 of 2003) B JULY 9, 2008 ,._ [ALTAMAS KABIR AND V.S. SIRPURKAR, JJ] Central Excises and Salt Act, 1944: c First Schedule - Tariff Items 14F and 68 - "Liquid hair dye" - Classification of for the period January, 1982 to De- cember, 1982 - HELD: Classification list submittec.'.by asses- see showing the product under residuary Tariff Item 68 w. e. f. 1. 3. 1975 was duly approved by Revenue - During relevant D period the demand made by Revenue according to Tariff Item t- 14F was erroneous - Judgment of High Court upholding the demand is set aside. The appellant-assessee was served with three no- E tices dated 2.8.1982, 27 .12.1982 and 17 .2.1983 demand- ing excise duty at the rate of 105% for the period January, 1982 to December, 1982 on the item "Uquid hair dye" un- t:er Tariff Item 14-F of the Central Excises and Salt Act, 1944. The stand ofthe assessee was that the classifica- F tion list submitted by it showing the product as covered ;. under residuary entry of Tariff Item 68 liable to excise duty y at the ;ate of 8% had all along been approved by the Rev- · enue since 1.3.1975. However, the demand was confirmed. In the writ petition of the assessee the High Court held that the product of the assessee was covered under Tariff Item G 14F as was existing at the relevant time and that even if the product was.not covered under Tariff Item 14-F but under· Entry no. 68, the assessee was still liable to pay excise duty <· at the rate of 105% since the same had been collected from the consumers but not passed to the Revenue. H ~ .... 570 ' ' GODREJ INDUSTRIES LTD. v. D.G AHIRE ASS. 571 --t- COLLECTOR OF CENTRAL EXCISE & ANR. In the instant appeal filed by the assessee it was c~n- A tended for the appellant that the High Court erred Jn hold- ing "hair dye" as "hair lotion". Allowing the appeal, the Court --..j HELD: 1. It will have to be borne in mind that at the B relevant point of time, namely, during January, 1982, to December, 1982, there was no specific entry under the Central Excise Tariff regarding "hair dyes", although, "hair lotion" was specified under Tariff Item 14F; and that only with effectfrom 151 March, 1975, a residuary entry, namely, c Tariff Item 68, was introduced, whereby goods which had not been specifically included under any of the other Tar- iff Items, were made exigible, though at the rate of 8% only. Consequently, appellant's product became taxable on and ~ from 1.3.1975 under Tariff Item 68., It is subsequent to the ~ introduction of Tariff Item no. 68 that appellant was 'in- D formed that its product did not fall under Tariff Item no. 14F. [para 13 and 37] [576-D,E & F; 586-8,C & D] 2.1 Nothing has been disclosed from any of the tech- nical information gleaned from standard text-books that E the appellant's product was anything more than a hair colouring agent or that it was or could be used to have a soothing cleansing or antiseptic action while washing out one's hair. From the chemical analysis of the appellant's " product also nothing has been shown as to whether the "' F same could be applied to the scalp for restoration or nour- ishment of hair, which could bring it within the definition of "lotion" as a medicinal product. [para 40] [587-8,C & D] 2.2 Even in common parlance or trader's jargon a hair dye, unless it had other properties besides the capacity G ·~ to darken hair, could not be equated with hair lotion. Al- though, not much weight has been given to the affidavits filed on behalf of the appellant, the same cannot be brushed aside in determining what a common man or a trader would understand by the expressions "hair lotion" H 572 SUPREME COURT REPORTS [2008] 10 S.C.R. A and "hair dye". While in a generic sense a hair dye may also be referred to as hair lotion, for the purposes of a tax statute, its chemical composition and actual usage be- come relevant. [para 41] [587-D,E & F] 2.3 It was stated that the appellant's preparation was 8 poisonous and had to be used with great care and cau- tion in the manner indicated in the literature supplied with the product. The natural corollary of such submission is that the said product could not, therefore, be treated as a lotion to be used either as a scalp or hair nourisher or for C medicinal purposes. [para 42] [587-F,G & H
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