Edible coconut oil classification turns on packaging and labelling, not retail size; Chapter 15 applied here.

Coconut oil packed in small retail containers remained classifiable under Chapter 15 as edible oil, because it was manufactured from copra without chemical treatment or cosmetic additives and was marketed with edible-grade and nutritional labelling. Rule 1 of the General Rules for Interpretation required classification by the heading text first, and Chapter 33 applied only where goods were put up or labelled as cosmetic or toilet preparations, or otherwise clearly specialised for that use. On those facts, the product was not hair oil under Chapter 33, so the demand and penalty were not sustainable.

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Issues: Whether coconut oil packed in small retail containers, without chemical treatment or cosmetic additives and marketed as edible oil, was classifiable under Chapter 15 as edible oil or under Chapter 33 as hair oil; and whether the demand and consequential penalty could be sustained.

Analysis: The product was manufactured from copra without chemical treatment or addition of any ingredient that would make it suitable as a cosmetic preparation. The packaging and labels showed it as edible oil, including reference to edible grade and nutritional particulars, and it was not presented as intended for cosmetic use. For classification, Rule 1 of the General Rules for the Interpretation of the First Schedule required the heading text to be applied first, and the HSN notes for Chapter 33 could apply only where the goods were put up and labelled as cosmetic or toilet preparations or otherwise clearly specialised for such use. On those facts, the matter was covered by the binding classification principle that edible coconut oil packed in consumer sizes remains classifiable as coconut oil under Chapter 15 and not as hair oil under Chapter 33.

Conclusion: The goods were classifiable under Chapter 15 as edible oil and not under Chapter 33 as hair oil. The demand and penalty were not sustainable. The assessee's appeal succeeded and the Revenue's appeal failed.

Ratio Decidendi: Coconut oil remains classifiable as edible oil when it is sold as edible oil in retail packs without cosmetic additives, special cosmetic labelling, or any indication that it is intended for use as hair oil.

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