1. These appeals by the Revenue are directed against the judgments of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal"). They raise a common question as to whether "Abbalide" imported by the respondents is classifiable as "an organic chemical" under Chapter 29 or a mixture of odoriferous substances falling under Heading 33.02 of Chapter 33 of the Tariff in the Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as "the Tariff).
2. The facts, briefly stated, are as under:
M/s. S.H. Kelkcr & Co. Ltd., the respondent in CA No. 276 of 1991, had imported a consignment of "Abbalide" in the year 1986. It was assessed to customs duty after being classified as falling under Chapter 29 of the Tariff.
After the samples were got tested by the Customs Authorities and after receiving the test report, it was found that the item was a mixture with a basis of odoriferous substance and a show-cause notice dated 2-3-1987 was issued requiring the respondent to show cause why it should not be treated as falling under Heading 33.02 of the Tariff. After considering the reply submitted by the respondent to the said show-cause notice, the Deputy Collector of Customs passed the order dated 6-3-1983 whereby it was held that the proper classification of the product would be under Heading 33.02 of the Tariff. The appeal filed by the respondent against the said order of the Deputy Collector was dismissed by the Collector of Customs (Appeals) by order dated 7-7-1988. The said orders were set aside by the Tribunal, on appeal, on the view that the goods were classifiable under Chapter 29. The Tribunal has remanded the matter to the Assistant Collector for examining the question of classification of the product under the heading and sub-heading of Chapter 29 after giving both sides due opportunity of" representation.
3. In Civil Appeals Nos. 10082-83 of 1995, the respondent, Hindustan Lever Ltd., had imported a consignment of "Abbalide" which was assessed for duty under Heading 33.02 of the Tariff. Subsequently, a refund claim was made by the said respondent on the basis that the said consignment was classifiable under Chapter 29. The said claim of the respondent for refund was rejected by the Assistant Collector of Customs. The order of the Assistant Collector was affirmed in appeal by the Collector of Customs (Appeals). The Tribunal, following its judgment in the case of S.H. Kelker & Co, Ltd, (which is under challenge in CA No. 276 of 1991), set aside the orders passed by the Assistant Collector and the Collector (Appeals) and remanded the matter to the Assistant Collector for examining the question of classification of the product under the heading and sub-heading of Chapter 29 of the Tariff after giving both the sides due opportunity of representation.
4. Chapter 29 of the Tariff relates to "organic chemicals" and is divided into various heads. The learned counsel for the respondents has submitted that the articles in question fall under the group "Aromatic polycarboxylic acids, their anhydrides, halides, peroxides, peroxyacids and their derivatives" under Heading 29.17. In the Notes at the beginning of Chapter 29, it is stated as follows:
"1. Except where the context otherwise requires, the headings of this chapter apply only to:
(a) Separate chemically defined organic compounds, whether or not containing impurities;
(b) Mixtures of two or more isomers of the same organic compound (whether or not containing impurities), except mixtures or acyclic hydrocarbon isomers (other than stereoisomers), whether or not saturated (Chapter 27);
(c) The products of Headings 29.36 to 29.39 or the sugar ethers and sugar esters and their salts, of Heading 29.40, or the products of Heading 29.41, whether or not chemically defined;
(d) The products mentioned in (a), (b) or (c) above dissolved in water;
(e) The products mentioned in (a), (b) or (c) above dissolved in other solvents provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use;
(rest omitted)"
5. Chapter 33 of the Tariff'relates to "Essential oils and resinoids; perfumery, cosmetics etc. or toilet preparations". Heading 33.02 in the said chapter is as follows: "33.02. Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry,"
6. According to the report of the Customs Laboratory, the product that was imported by the respondent was "a solution of aromatic chemical 1, 3, 4, 6, 7, 8, hexahydro, 4, 6, 6, 7, 8, 8, hexamethyl cyclopentagamma-2-Benzo Pyran in diethyl phthalate". In the said report reference was made to Technical Opinion No. 1364 of 17-2-1987 relating to the compound Galaxolide 50 wherein it was stated: "This product is imported in solution form for convenience in handling as seen from previous cases of import. In this connection, Note l(e) under Chapter 29 may be seen which would preclude classification under this chapter. In my opinion this product merits to be considered as mixture with a basis of odoriferous substance (Galaxolide) which finds mention under Heading 33.02 C.T.A."
7. "Abbalide" which was imported by the respondent and "Galaxolide" in respect of which the said opinion was given are identical and are different brand names for the same compound. The technical literature on "Galaxolide" states that the product is a very viscous liquid and that the commercial product is sold in a diluted state in order to make the material handy and pourable at room temperature. A certificate dated 19-9-1986 from the supplier was also produced by the respondents before the Customs Authorities. In the said certificate it is stated that the product "Abbalide" in its pure form, is physically unstable and as such could not be used and that in its diluted form it is stable and can be used with consistent reliability over long periods of time. The solvent that was used in these cases was diethyl phthalate, a non-odoriferous solvent. The compound is generally used as a perfume in the manufacture of soaps, cosmetics, detergents etc.
8. Shri Gauri Shanker Murthy, the learned counsel for the Revenue has urged that the Tribunal was in error in holding that "Abbalide" imported by the respondents is classifiable under Chapter 29. The submission of learned counsel is that the said compound is a mixture of odoriferous substances with a basis of one of the odoriferous substance and since it is used as a raw material in an industry it was classifiable under Heading 33.02 of the Tariff and that the Tribunal was in error in reversing the orders passed by the Deputy Collector and Collector (Appeals) and in taking the view that it was classifiable under Chapter 29. In this connection, Shri Murthy, has also placed reliance on Clause 1(e) of the Notes in Chapter 29 and has urged that since the compound is particularly suitable for specific use as perfumery and is not meant for general use, it could not be regarded as classifiable under Chapter 29.
9. Ms Amrita Mitra, the learned counsel appearing for the respondent in CA No. 276 of 1991 and Shri H.N. Salve, the learned Senior Counsel appearing for the respondent in CAs Nos. 10082-83 of 1995, have, on the other hand supported the impugned judgment of the Tribunal and have urged that the Tribunal has rightly held that "Abbalide" imported by the respondents was classifiable under Chapter 29 and it could not be classified as a mixture of odoriferous substances under Heading 33.02 of the Tariff. The submission of the learned counsel is that Heading 33.02 of the Tariff postulates a mixture of more than one odoriferous substance and that is the compound imported by the respondent and there was only one odoriferous substance and that the other substance in which it was mixed, namely, diethyl phthalate being a non-odoriferous substance is not an odoriferous substance and therefore the compound could not be regarded as a mixture of odoriferous substances. It was also submitted that Clause 1(e) in the Notes in Chapter 29 could not be invoked to exclude the applicability of Chapter 29 for the reason that the chemical is dissolved in the substance only for the purpose of enabling it to be stored or transported and that the solvent does not render the product particularly suitable for specific use rather than for general use.
10. Heading 33.02 of the Tariff refers to "mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry".
It envisages (0 mixtures of odoriferous substances, and (ii) mixtures (including alcoholic substances) with a basis of one or more of odoriferous substances and the mixtures are of a kind used as raw materials in industry. In the present case, it has been found that the chemical, in its original form, consists of various isomers and is an odoriferous substance. It has been dissolved in diethyl phthalate, a non-odoriferous substance. The odoriferous substance is the basis of the mixture. It is not disputed that the mixture is used as a raw material, viz., perfume in industry. It can, therefore be said that the compound is a mixture with a basis of an odoriferous substance and since it is for use as a raw material in industry, it would be classifiable under Heading 33.02.
11. In our opinion, the Tribunal was in error in construing Clause 1(e) of Chapter 29 and in holding that the said product was classifiable under Chapter 29. Clause 1(e) of the Notes in Chapter 29 postulates that if a product mentioned in Sub-clauses (a), (b) or (c) of Clause 3 is dissolved in a solvent and the solution constitutes a normal and necessary method of putting up these products adopted soley for the reasons of safety or for transport then the product would fall within Chapter 29 only if the solvent does not render the product particularly suitable for specific use rather than for general use. As per the certificate dated 19-9-1986 issued by the manufacturer the compound imported by the respondents cannot be used in the condition it is manufactured and for making it suitable for use and for retaining its suitability for use it has to be dissolved in a solvent. The need of a solvent is not only for the purpose of storage and transport of the chemical, but also for retaining the suitability of the product after it is manufactured. Its dissolution in the solvent is necessary in order to make the product suitable for use. Since the product is used only for perfumery and not for any other purpose, it has to be held that the product is intended for specific use only. In view of Clause 1(e) of the Notes in Chapter 29, it may be held that the product imported by the respondents cannot be regarded as falling under Chapter 29 of the Tariff and would fall under Heading 33.02 in Chapter 33 of the Tariff. We are, therefore, unable to uphold the impugned judgments of the Tribunal.
12. The appeals are accordingly allowed, the judgments of the Tribunal under appeal are set aside and the appeals filed by the respondents before the Tribunal are dismissed. There will be no orders as to costs.