- (1.) Respondent herein manufacture hair oil under the brand name of "Alma Lio". It was classified under SH No.3003.39 of the Schedule appended to the Central Excise Tariff Act, 1985 (for short, 'the 1985 Act'). The said entry provides for excise duty at the rate of 8% ad valorem being Ayurvedic Medicament. A show cause notice was issued as to why the said product shall not be classified under SH No.3305.99 being a cosmetic product attracting excise duty at the rate of 30% ad valorem. It was alleged that by wrong classification of its product there had been a short payment of central excise duty amounting to Rs.11, 12, 129/-. A demand of the said amount in terms of Rule 9(2) of the Central Excise Rules, 1944 (for short, 'the Rules') read with section 11A of the Central Excise Act, 1944 (for short, 'the 1944 Act') was issued. A penal action in terms of rule 173-Q of Rules was also proposed. Cause having been shown by Respondent, the matter was heard by the Deputy Commissioner, who opined that the product was classifiable under SH 3305.99 of the 1985 Act. Respondent was directed to make good the short payment. A penalty of Rs.11, 12, 129/- was also imposed upon it together with interest. An order for recovery of interest under section 11 AB of the 1944 Act was also passed. The appeal preferred by Respondent before the Commissioner (Appeals) was dismissed by an order dated 17.4.2003. He, however, opined that the product being not perfumed and being hair tonic, and as such different from hair oil, could be classified under Chapter Heading No.3305.99 falling in the residuary group. He also directed valuation of the goods to be done under Section 4A of the 1944 Act. On a further appeal made by Respondent before the Tribunal, the product was held to be classifiable under SH-3305.10 as 'perfumed hair oil'. The matter was remanded to the Adjudicating Authority for recomputing the duty of excise payable.
(2.) Appellant is, thus, before us. Mr. Mohan Parasharan, the learned Additional Solicitor General of India, appearing on behalf of Appellant, submitted that the Tribunal went wrong in classifying the product of Respondent as perfumed hair oil although it never disclosed the manufacturing process involved therein.
(3.) Mr. Madhav Rao, the learned counsel appearing on behalf of Respondent, on the other hand, supported the judgment.;