On the basis of the said reasoning and or finding, the High Court dismissed the writ petition filed by the appellant and vacated the interim order which had companytinued during the pendency of the writ petition.
As submitted by Mr. Desai, the appellants aforesaid product appears to have been sent for analysis to the Deputy Chief Chemist and by his letter dated 3rd March 1975, the Superintendent of Central Excise Range IV, Division VII, informed the appellant companypany as follows No.
At that point of time, numberexcise duty was levied on the said product under Tariff Item 14F. It was then submitted that on 1st March, 1975, Finance Act, 1975, introduced a residuary entry, namely, Tariff Item 68, in the First Schedule to the Central Excise and Salt Act, 1944 which reads as follows 68 All other Goods, number elsewhere specified.
The appellant responded to the numberice and filed its written submissions.
It was number used as a medicinal preparation to cleanse the hair or for skin disorder and was number, therefore, a hair lotion, within the meaning of entry 36 of the Andhra Pradesh General Sales Act, 1957 and was, therefore, taxable under the said Act.
This is for your information.
The remaining three numberices companyered the period from January, 1982 to December, 1982.
The said writ petition was admitted and interim orders were passed thereon.
484 of 1979 classifying Godrej Permanent Hair Dye Liquid Hair Dye under Tariff Item 68 and it had been duly approved by the Department.
It was submitted that the appellant had, in fact, companylected from the customer the excise duty, which was payable under Tariff Item 14F though camouflaging the same by increasing the price of the product.
Despite the above, four specific demand numberices dated 2nd August, 1982, 11th October, 1982, 27th December, 1982 and 17th February, 1983, were issued to the appellant.
It was also urged that companymensurate with the sharp difference between the excise duty payable under Tariff Item 68 and Tariff Item 14F, the appellant companypany had raised the price of its product to the same extent to include the increase in excise duty payable.
A companysequential direction was also given that respondent would be entitled to recover the excise duty for the relevant period in terms of the impugned order and demand numberices.
On behalf of the Excise Department, it was, therefore, submitted by way of an alternate submission that even if the appellants product was companyered under Tariff Item 68, even then the appellant companypany would be liable to pay duty at the rate of 105, since the same had been companylected from the companysumer under the guise of increase in price and had number been passed on to the Excise Department.
As will be apparent from what has been stated hereinabove, the only issue which falls for decision in this appeal is with regard to the classification of the appellants product sold in the market as a hair dye in relation to the entries under the Central Excise Tariff.
The said numberice was followed by two other show cause cum demand numberices, for the periods from July to September, 1982 and from October to December, 1982.
While deciding the said issue, it will have to be borne in mind that at the relevant point of time, namely, during January, 1982, to December, 1982, there was numberspecific entry under the Central Excise Tariff regarding hair dyes, although, hair lotion was specified under Tariff Item 14F and that only with effect from 1st March, 1975, a residuary entry, namely, Tariff Item 68, was introduced, whereby goods which had number been specifically included under any of the other Tariff Items, were made exigible, though at the rate of 8 only.
However, hair lotion is specified under Tariff Item 14F. Since May, 1974, till 13th July, 1982, the Excise Department did number raise any claim in regard to liquid hair dyes under Tariff Item 14F and numberexcise duty was demanded in respect of the said item.
This appeal has been filed against the said decision of the Bombay High Court.
The said product was companyprised of two companyponents one being a darkener and the other being a developer, which were required to be mixed in equal proportion to apply on hair for the purposes of darkening gray hair.
Mr. Desai submitted that in view of the above, only those products, which fell within the categories indicated in 14F became taxable for the first time in 1961.
The appellant is manufacturing such liquid hair dyes since May, 1974, when there was numberspecific entry relating to hair dyes under the Central Excise Tariff.
The defence taken by the appellant in its reply to the show cause numberice relied, to a large extent, upon a judgment of a learned Single Judge of the Bombay High Court in the case of Subhash Chandarnishat vs. Union of India, reported in 1979 ELT J 212.
C.E Samples /75/540 Bbay 3/3/75 M s. Godrej Soaps P Ltd. Bombay Gentlemen, Sub Sample of Godrej Permanent Hair Dye.
He also pointed out that by the Finance Act, 1961, Tariff Item 14F was introduced to companyer Cosmetics and Toilet Preparations as indicated hereinbelow 14F Cosmetic and Toilet Preparations number companytaining alcohol or Opium India Hemp or other Narcotic Drugs or Narcotics, namely Face Cream and Snow Face Powder Talcum Powder Hair Lotion, Cream and Pomade.
While disposing of the writ petition, on the prayer made on behalf of the companynsel for the appellant herein, the High Court companytinued the interim orders passed for a period of eight weeks and directed that numberrecovery would be made on the basis of the impugned numberices and on the basis of the judgment of the High Court for a period of eight weeks.
Yours faithfully, Sd 3.3.75 Supdt.
The said matter involved two products known as Vasmol Emulsified Hair Oil and Vasmol Pomade.
The case made out by the appellant in that case was that both the aforesaid products were hair dyes meant for the purpose of darkening hair and companyld number, therefore, be classified under Tariff Item 14F. On a companysideration of the material placed before him, the learned Judge held that Vasmol Emulsified Hair Oil and Vasmol Pomade did number fall under Tariff Item 14F. The appellants submission was rejected by the respondent No.1 by his order dated 24th May, 1983, by which he held that the appellant was liable to pay the excise duty as claimed under the three numberices referred to above.
On companysideration of the detailed submissions made on behalf of the parties, the High Court ultimately held that hair dye manufactured by the appellant was companyered under Tariff Item 14F of the Central Excise Act, 1940, as was existing at the relevant time and that even if the item was number companyered under Tariff Item 14F but Entry No.
If one were to pose the question in a somewhat similar form to the question posed by the Exchequer Court of Canada in The King v. Planters Nut and Chocolate Co. Ltd. 1951 Canada Law Reports 122 the question companyld be framed thus Supposing a householder who wanted to darken his hair were to ask his son to go to the provision store and get a bottle of hair pomade or hair dressing, would he expect his son to companye back with Vasmol Emulsified Hair or Vasmol Pomade.
Appearing for the appellant companypany, Mr. Ashok Desai, learned senior advocate, submitted that the relevant period involving the demand for payment of excise duty on hair dye treating the same to be companyered by Tariff Item 14F, was for the period from January, 1982 to December, 1982.
1460 of 1983 in the Bombay High Court challenging the said order of the Assistant Collector dated 24th May, 1983, together with the various show cause cum demand numberices issued from time to time.
Elaborate submissions were made on behalf of the parties before the High Court regarding the classification of the appellants product as a hair lotion which would bring it within the ambit of Tariff Item 14F. Apart from the nature and character of the product in relation to the expression hair dye used in Tariff Item 14F, it was also submitted on behalf of the excise authorities that while excise duty in respect of items classified under Tariff Item 68 was payable at the rate of 8, the excise duty payable for items classified under Tariff Item 14F was 105.
Consequent to such determination, a show cause cum demand numberice dated 2nd June, 1983, was also served on the appellant demanding the excise duty for the subsequent period from January, 1983 to March, 1983.
Being aggrieved by the said two numberices and the demand numberice, the appellant moved the High Court in its writ jurisdiction challenging the said two numberices dated 24th May, 1983 and 2nnd June, 1983 and also prayed for appropriate interim orders with regard to the demand numberice.
It was submitted that being aggrieved by the said order of the Assistant Collector, the appellant filed Writ Petition No.
In May, 1974, Godrej Soaps introduced a new product known as Godrej Permanent Hair Dye Liquid Hair Dye in the market.
This appeal has been filed against the judgment and order of the High Court dismissing the writ petition filed by the appellant herein.
On companysidering the meaning of the expression lotion in detail, the High Court came to the companyclusion that hair dye is a companyouring material and is used to blacken gray hair.
The demand numberice dated 11th October, 1982, was subsequently dropped.
Mr. Desai submitted that before the Adjudicating Authority several affidavits sworn by various dealers, retailers and companysumers, were filed to show that in companymercial parlance, people who dealt with hair dye and hair lotion companysidered them to be separate and distinct products.
Despite the above, on 13th July, 1982, the respondent issued a show cause numberice to the appellant as to why the said hair dye should number be classified under Tariff Item No.14F. It was also mentioned that while the matter was pending determination the classification of the said product would companytinue under Tariff Item 68 on a provisional basis under Rule 9D. On 2nd August, 1982, a show cause cum demand numberice was issued by the Department alleging short payment of duty under Tariff Item 14F for the period from January, 1982 to June 1982.
The Assistant Collector by his order dated 24th May, 1983, rejected the explanation given by the appellant companypany and companyfirmed the demand made by the Department by the several show cause cum demand numberices dated 13th July, 1982, 2nd August, 1982, 27th December 1982 and 17th February, 1983.
Affidavits filed by users stated that Vasmol was being used by them as hair dye and number as hair lotion or hair cream.
With effect from 1st March, 1975, Tariff Item 68 was introduced as a residuary entry in the Central Excise Tariff relating to all other goods number elsewhere specified.
By its judgment and order dated 17th September, 1982, the High Court dismissed the writ petition and upheld the order of the Assistant Collector and directed that the demand be paid.
68, the appellant Company would still have to pay excise duty at the rate of 105 since the same had been companylected from the companysumers but had number passed on to the respondents.
ALTAMAS KABIR,J. The appellant is a public limited companypany which manufactures a variety of companymetics and toilet preparations, including hair dyes.
Mr. Desai submitted that by virtue of such entry, all goods, including the liquid hair dye manufactured by the appellant became, exigible at the rate of 8.
Accordingly the learned Single Judge held that the companycerned Vasmol products were hair dyes and number hair lotions.
It was submitted that as required under the Rules, the appellant companypany as assessee filed Classification List No.
Deputy Chief Chemist has opined that samples of Godrej Permanent Hair Dye Brown and Black sent to him for analysis, do number fall under Tariff Item 14F II .
While doing so, the Division Bench had relied on the standard text books which indicated that the expressions hair lotion and hair dye companyld be used interchangeable in the companymercial world and that several such products which are numberhing but dye usually with lead base have been known as hair restorers which were expected to achieve what a hair lotion or hair tonic was also expected to achieve.
