TaxTMI 
TaxTMI 
2004 (6) TMI 339
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....terials for their final products in their units in Mangolpuri and Ranjit Nagar, Delhi; that they make following compounds which are packed in Jerry cane of 25/50 kgs. each:- (1) TNP-00IS (shampoo), (2) TNP - 020S (shampoo), (3) TNP - 002C (cream) (4) TNP-013C (cream) (5) TNP-018C (cream) (6) TNP - 059C (cream) 2.2 He mentioned that these six compounds are the main raw materials for the manufacture of their Ayur brand shampoo and cream; that these compounds are not capable of being used as shampoo or cream since it would have adverse effect on the user; that the shampoo is manufactured by the addition of the compound with other raw materials like sodium lauryl sulphate (SLR), sodium lauryl ether sulphate (SLES) and D.M. water; that the cream is manufactured by mixing the compounds and various other components like stearic acid, LLP, Perfume and D.M. water. He explained the manufacturing process of TNP compounds as follows; TNP compound is manufactured by mixing its basic constituents in a manufacturing vessel; the mixture is heated and then allowed to cool; the resultant product is TNP compound and is cleared in 25 kg./50 kg. P....
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....ed that the Commissioner, in the impugned Order, has held that the products have the essential character of shampoos and cosmetics and hence by the application of Interpretative Rule 2(a) they would get classified under Heading 33.04/33.05 of the Tariff; that this finding is contrary to the Explanatory Notes which clearly provides that in view of the scope of Heading of Sections I & VI, Rule 2(a) does not normally apply to goods of these Sections; that hence in view of the mandate of HSN, Rule 2(a) cannot be invoked to classify the compounds under Heading 22.04/33.05. He further mentioned that as per the impugned Order for classifying the compounds under Heading 33.02, they must contain substances of Heading 33.01 only or odoriferous constituents isolated from Heading 33.01 or synthetic compound; that the test applied by the Commissioner is that all the components of the compounds must be derived from or must contain substances falling under Heading 33.01; that this finding is not correct as Heading 33.02 covers also "a mixture with a basis of one or more of these (odoriferous) substances"; that this part of the Heading applies to products which are not mixtures of odoriferous subs....
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....one or more odoriferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics) combined with added diluents or carriers such as vegetable oil, dextrose or starch, (g) Mixtures, whether or not combined with a diluent or carrier or containing alcohol, of products of other Chapters (e.g. spices) with one or more odoriferous substances provided these substances form the basis of the mixture. 5.2 The learned SDR contended that thus goods to be covered under Heading 33.02 should contain the substances of Heading 33.01 only or odoriferous constituents isolated from the substance of Heading 33.01 only and or synthetic aromatics; that synthetic aromatic compounds should necessarily have aroma and the benzene ring; that inputs SLES, SLS, amid urea, sodium chloride, borex, silicon oil, etc. used in the preparation of impugned compounds are neither the compounds of Heading 33.01 nor mixture of oleoresin of other Chapters nor they are synthetic aromatic compounds; that thus the impugned goods are not covered under Heading 33.02. He further contended that as the impugned goods have attained the essential character ....
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....le 2(a) clearly mentions that "In view of the scope of the headings of Sections I to VI, this part of the Rules does not normally apply to goods of these Sections." Chapter 33 of the Tariff falls under Section VI of the Tariff. Moreover Note 2 to Chapter 33 of the Tariff provides that the Heading Nos. 33.03 to 33.07 apply to products suitable for use as goods of these headings and put up in packings with labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialized to such use. The impugned goods do not satisfy any of the requirements mentioned in Note 2 to Chapter 33 inasmuch they are not goods suitable for use as goods for beauty or make up (Heading 33.04) or preparations for use on the hair (Heading No. 33.05) as these are in highly concentrated form. Further Revenue has not rebutted the contention of the Appellants that the impugned goods are packed in 25 kgs./50 kgs. packing which is not a form clearly specialized to use as shampoo or cream. Moreover these goods, as per learned Advocate and which has not been controverted by Revenue, are not accompanied with labels and literature to the effect that the....