Hair-care preparations classified as excisable cosmetics, but duty demand failed on limitation without suppression or clandestine removal.

Products described in the assessee's own literature and advertisements as hair-care preparations were treated as cosmetic and toilet preparations for excise classification under Item No. 14-F(ii), because their intended use was to care for, set, fix and cleanse hair. However, the duty demand was held time-barred since it was raised after more than one year from removal, the classification lists had already been approved as non-excisable, and there was no evidence of clandestine removal or suppression. Rule 10A was therefore held inapplicable, and recovery could proceed only under the ordinary limitation rule.

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Issues: (i) Whether the products in question were assessable to duty under Item No. 14-F(ii) of the Central Excise Tariff as cosmetic and toilet preparations; (ii) whether the duty demand was barred by limitation and whether Rule 10A of the Central Excise Rules applied.

Issue (i): Whether the products in question were assessable to duty under Item No. 14-F(ii) of the Central Excise Tariff as cosmetic and toilet preparations.

Analysis: The products were found, on the basis of the appellants' own literature and advertisements, to be intended for the care, setting, and treatment of hair. Their described uses showed that they were meant to give glossy waves, fix hair in place, and function as a shampoo for removing dirt and grease. On that basis, they were treated as hair-care preparations falling within the tariff item.

Conclusion: The issue was decided against the assessee and the products were held assessable under Item No. 14-F(ii) of the Central Excise Tariff.

Issue (ii): Whether the duty demand was barred by limitation and whether Rule 10A of the Central Excise Rules applied.

Analysis: The demand was raised after more than one year from removal of the goods, while the classification lists had been approved by the officers as non-excisable and there was no evidence of clandestine removal or suppression. In those circumstances, Rule 10A was held inapplicable and recovery could be made only under Rule 10 of the Central Excise Rules. The demand was therefore held to be beyond time under Rule 10.

Conclusion: The issue was decided in favour of the assessee and the demand was held time-barred.

Final Conclusion: The assessment on merits was sustained, but the demand failed on limitation, resulting in partial relief to the assessee.

Ratio Decidendi: Where the goods are shown by the assessee's own literature to be hair-care preparations, they may be classified under the relevant excise tariff item, but a demand raised beyond the permissible period without clandestine removal or suppression cannot be sustained under the special extended provision and is governed by the ordinary limitation rule.

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