Holding

The liquid hair dye is not a "hair lotion" and is taxable only under the residuary Tariff Item 68 at 8%, rendering the demand under Tariff Item 14F erroneous.

Summary

Godrej Industries Ltd, a manufacturer of liquid hair dye, was served with three demand notices for excise duty at the rate of 105% under Tariff Item 14F (hair lotion) for the period January‑December 1982. The company argued that its product, being a hair colouring agent, fell under the residuary Tariff Item 68 introduced in 1975, which attracted only an 8% duty, and that the classification list showing it under Item 68 had been approved by the Revenue. The Bombay High Court held that the product was a hair lotion and upheld the demand. On appeal, the Supreme Court examined the meaning of “hair lotion” versus “hair dye”, applied the common‑parlance test and considered the effect of the “namely” clause in Item 14F, concluding that the product was not a hair lotion and therefore not chargeable under Item 14F. The Court set aside the demand notices and allowed the appeal.

Issues considered

The correct classification of "liquid hair dye" under the Central Excise Tariff – whether it falls under Tariff Item 14F (hair lotion) or the residuary Tariff Item 68.
Whether the expression "namely" in Tariff Item 14F limits its scope to the items expressly listed.
The appropriate method of interpretation of tariff entries – technical analysis versus common‑parlance test.

Legislation cited

Central Excise Ruless. Rule 98, s. Rule 9D
Central Excises and Salt Act, 1944s. First Schedule – Tariff Item 14F, s. First Schedule – Tariff Item 68

Subjects

central excisetariff classificationhair dyehair lotionresiduary entrycommon parlanceexcise dutyTariff Item 14FTariff Item 68statutory interpretation

Judgment

[2008] 10 S.C.R. 570

'1-
A GODREJ INDUSTRIES LTD.
v.
D.G. AHIRE ASSISTANT COLLECTOR
OF CENTRAL EXCISE & ANOTHER
(Civil Appeal No. 228 of 2003)
B ,._
JULY 9, 2008
[ALTAMAS KABIR AND V.S. SIRPURKAR, JJ]

Central Excises and Salt Act, 1944:
c First Schedule - Tariff Items 14F and 68 - "Liquid hair
dye" - Classification of for the period January, 1982 to De-
cember, 1982 - HELD: Classification list submittec.'.by asses-
see showing the product under residuary Tariff Item 68 w. e. f.
1. 3. 1975 was duly approved by Revenue - During relevant
D period the demand made by Revenue according to Tariff Item
14F was erroneous - Judgment of High Court upholding the t-
demand is set aside.
The appellant-assessee was served with three no-
tices dated 2.8.1982, 27 .12.1982 and 17.2.1983 demand-
E ing excise duty at the rate of 105% for the period January,
1982 to December, 1982 on the item "Uquid hair dye" un-
t:er Tariff Item 14-F of the Central Excises and Salt Act,
1944. The stand ofthe assessee was that the classifica-
tion list submitted by it showing the product as covered ;.
F under residuary entry of Tariff Item 68 liable to excise duty y
at the ;ate of 8% had all along been approved by the Rev-
·enue since 1.3.1975. However, the demand was confirmed.
In the writ petition of the assessee the High Court held that
the product of the assessee was covered under Tariff Item
G 14F as was existing at the relevant time and that even if the
product was.not covered under Tariff Item 14-F but under·
Entry no. 68, the assessee was still liable to pay excise duty <·
at the rate of 105% since the same had been collected from
the consumers but not passed to the Revenue.
~ ....
H 570

'
GODREJ INDUSTRIES LTD. v. D.G AHIRE ASS. 571
COLLECTOR OF CENTRAL EXCISE & ANR.
--t-
In the instant appeal filed by the assessee it was c~n- A
tended for the appellant that the High Court erred Jn hold-
ing "hair dye" as "hair lotion".
Allowing the appeal, the Court
--..j
HELD: 1. It will have to be borne in mind that at the B
relevant point of time, namely, during January, 1982, to
December, 1982, there was no specific entry under the
Central Excise Tariff regarding "hair dyes", although, "hair
lotion" was specified under Tariff Item 14F; and that only
with effectfrom 151 March, 1975, a residuary entry, namely, c
Tariff Item 68, was introduced, whereby goods which had
not been specifically included under any of the other Tar-
iff Items, were made exigible, though at the rate of 8% only.
Consequently, appellant's product became taxable on and
~
from 1.3.1975 under Tariff Item 68., It is subsequent to the
~ D
introduction of Tariff Item no. 68 that appellant was 'in-
formed that its product did not fall under Tariff Item no.
14F. [para 13 and 37] [576-D,E & F; 586-8,C & D]
2.1 Nothing has been disclosed from any of the tech-
nical information gleaned from standard text-books that E
the appellant's product was anything more than a hair
colouring agent or that it was or could be used to have a
soothing cleansing or antiseptic action while washing out
one's hair. From the chemical analysis of the appellant's
" product also nothing has been shown as to whether the F
"' same could be applied to the scalp for restoration or nour-
ishment of hair, which could bring it within the definition
of "lotion" as a medicinal product. [para 40] [587-8,C & D]
2.2 Even in common parlance or trader's jargon a hair
dye, unless it had other properties besides the capacity G
to darken hair, could not be equated with hair lotion. Al-
·~
though, not much weight has been given to the affidavits
filed on behalf of the appellant, the same cannot be
brushed aside in determining what a common man or a
trader would understand by the expressions "hair lotion" H
572 SUPREME COURT REPORTS [2008] 10 S.C.R.

A and "hair dye". While in a generic sense a hair dye may
also be referred to as hair lotion, for the purposes of a tax
statute, its chemical composition and actual usage be-
come relevant. [para 41] [587-D,E & F]
2.3 It was stated that the appellant's preparation was
8 poisonous and had to be used with great care and cau-
tion in the manner indicated in the literature supplied with
the product. The natural corollary of such submission is
that the said product could not, therefore, be treated as a
lotion to be used either as a scalp or hair nourisher or for
C medicinal purposes. [para 42] [587-F,G & H]
2.4 The view taken by the High Court was errone-
ous. During the relevant period, namely, January, 1982 to
December, 1982, the demand made on behalf of the Rev-
D enue for payment of tariff according to Tariff Item 14F was
erroneous and the judgment of the High Court based
thereupon is set aside. The demand notices dated 2"d
August, 1982, 27th December, 1982 and 17th February, 1983
covering the period from January, 1982 to December, 1982
demanding payment of excise duty under Tariff Item 14F
E of the First Schedule to the Central Excises and Salt Act,
1944 are quashed. [para 42 & 43] [588-A, B & C]
Subhash Chandarnishat vs. Union of India 1979 ELT (J)
212; Chimanlal Beliram Mehta vs. M.G. Vaidya 2000 (124)
F E.L.T. 40 (Born); Godrej Soaps Ltd vs. State of Andhra
Pradesh 1983 (53) STC 376; Dunlop India Limited Vs. Union
of India 1976 (2) SCC 241; Ram Avtar Bhudiaprasad vs. As-
sistant Sales Tax Officer 1962 (1) SCR 279; and Bharat
Sanchar Nigam Ltd. Vs. Union of India 2006 (3) SCC 1 - re-
G ferred to.
The King vs. Planter Nut and Chocolate Company 1951
Canada Law Reports - Exchequer Court p. 122 - referred to.
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 228
H of 2003
GODREJ INDUSTRIES LTD. v. D.G. AHIRE ASS. 573
COLLECTOR OF CENTRAL EXCISE & ANR. [ALTAMAS KABIR,J.]

From the Judgment and Order dated 17.9.2002 of the High A
Court of Bombay in W.P. No. 1460/83
Ashok H. Desai, R. Ravindran, Sonu Bhatnagar, Ajay
Aggarwal, Ravinder Narain and Rajan Narian for the Appellant.
M. Chandra Shekharan, ASG, Shalini Kumar and B. B
Krishna Prasad for the Respondents.
The Judgment of the Court was delivered by
ALTAMAS KABIR,J. 1. The appellant is a public limited
company which manufactures a variety of cosmetics and toilet c
preparations, including hair dyes. The appellant is manufactur-
ing such "liquid hair dyes" since May, 1974, when there was no
specific entry relating to "hair dyes" under the Central Excise
Tariff. However, "hair lotion" is specified under Tariff Item 14F.
~
Since May, 1974, till 13th July, 1982, the Excise Department did
~ D
not raise any claim in regard to "liquid hair dyes" under Tariff
Item 14F and no excise duty was demanded in respect of the
said item.
2. With effect from 1st March, 1975, Tariff Item 68 was in-
traduced as a residuary entry in the Central Excise Tariff relat- E
ing to "all other goods not elsewhere specified". As a result, all
goods became excisable. Inasmuch as, it had been accepted
by the Excise Department that "liquid hair dye" did not fall under
,,.. Tariff Item 14F, the appellant started paying duty on the said
"' product under Tariff Item 68 with effect from 1st March, 1975. F
Apparently, the classification list, which was submitted by the
appellant, classifying the aforesaid product under Tariff Item 68,
was also duly approved.
3. In relation to the aforesaid product, for the first time, the
respondent No.1 issued a general show-cause notice to the G
...,.>: appellant on 13th July, 1982, asking the appellant to show-cause
as to why its "liquid hair dye" should not be classified under
Tariff Item 14F and charged with duty accordingly. The notice,
however, stated that pending determination of the question
raised, the classification of the aforesaid product would con- H
. 574 . SUPREME COURT REPORTS [2008] 10 S.C.R.

A tinue to be under Tariff Item 68 on a provisional basis and that
the appellant would have to execute a bond for provisional as-
sessment under Rule 98. The appellant responded to the no-
tice and filed its written submissions. Despite the above,_four
. specific demand notices dated 2nd August, 1982, 11th October,
B 1982, 27th December, 1982 and 17th February, 1983, were is-
sued to the appellant. The demand notice dated 11th October,
1982, was subsequently dropped. The remaining.th.ree notices
covered the period from January, 1982 to December, 1982.
. . .
4. The defence taken by the appellant in its reply to the
C show cause notice relied, to a large extent, upon a judgment of
a learned Single Judge of the Bombay High Court in th_e case
of Subhash Chandarnishat vs. Union of India, reported in [1979
ELT (J) 212]. The said matter involved tyvo products known as
"Vasmol Emulsified Hair Oil" and·"Vasmol Pomade". The case
D made out by the appellant in that case was that both the afore-
said products were hair dyes meant for the purpose of darken-
ing hair and could not, therefore, be classified under Tariff Item
14F. . On a consideration of the material placed before him, the
learned Judge held that "Vasmol Emulsified Hair Oil" and
E "Vasmol Pomade" did not fall under Tariff Item 14F.
5. The appellant's submission was rejected by the respon-
.dent No.1 by his order dated 24th May, 1983, by which he held
that the appellant was liable to pay the excise duty as claimed
under the three notices referred to above .. Consequent to such .
F determination, a show-cause-cum-demand notice dated 2nd
June, 1983, was also served on the appellant demanding the
excise duty for the subsequent period from January, 1983 to
March, 1983.
G 6. Being aggrieved by the said two notices and the de-
mand notice, the appellant moved the High Court in its writ ju-
risdiction challenging the said two notices dated 24th May,
1983 and 2nnd June, 1983 and also prayed for appropriate
interim orders with regard to the demand notice. The said writ
H petition was admitted and interim orders were passed thereon.
GODREJ INDUSTRIES LTD. v. D.G AHIRE ASS. 575
COLLECTOR OF CENTRAL EXCISE & ANR. [ALTAMAS KABIR,J.]
-.
7. Elaborate submissions were made on behalf of the par- A
ties before the High Court regarding the classification of the
appellant's product as a "hair lotion" which would bring it within
the ambit of Tariff Item 14F. Apart from the nature and character
of the product in relation to the expression "hair dye" used in
Tariff Item 14F, it was also submitted on behalf of the excise B
authorities that while excise duty in respect of items classified
under Tariff Item 68 was payable at the rate of 8%, the excise
duty payable for items classified under Tariff Item 14F was
105%.
8. It was also urged that commensurate with the sharp dif- c
ference between the excise duty payable under Tariff Item 68
and Tariff Item 14F, the appellant company had raised the price
of its product to the same extent to include the increase in ex-
cise duty payable. It was submitted that the appellant had, in
~
fact, collected from the customer the excise duty, which was D
~
payable under Tariff Item 14F though camouflaging the same
by increasing the price of the product. On behalf of the Excise
Department, it was, therefore, submitted by way of an alternate
submission that even if the appellant's product was covered
under Tariff Item 68, even then the appellant company would be · E
liable to pay duty at the rate of 105%, since the same had been
collected from the consumer under the guise of increase in price
and had not been passed on to the Excise Department.
9. On consideration of the detailed submissions made on
"'
~ behalf of the parties, the High Court ultimately held that "hair F
dye" manufactured by the appellant was covered under Tariff
Item 14F of the Central Excise Act, 1940, as was existing at the
relevant time and that even if the item was not covered under
Tariff Item 14F but Entry No. 68, the appellant
G
Company would still have to pay excise duty at the rate of
~-.l,
105% since the same had been collected from the consumers
but had not passed on to the respondents.
10. On the basis of the said reasoning and/at finding, the
High Court dismissed the writ petition filed by the appellant and H
576 SUPREME COURT REPORTS [2008] 10 S.C.R.

A vacated the interim order which had continued during the pen-
dency of the writ petition. A consequential direction was also
given that respondent would be entitled to recover the excise
duty for the relevant period in terms of the impugned order and
demand notices.
B 11. While disposing of the writ petition, on the prayer made
on behalf of the counsel for the appellant herein, the High Court
continued the interim orders passed for a period of eight weeks
and directed that no recovery would be made on the basis of
the impugned notices and on the basis of the judgment of the
C High Court for a period of eight weeks.

12. This appeal has been filed against the said decision
of the Bombay High Court.

13. As will be apparent from what has been stated herein-
D above, the only issue which falls for decision in this appeal is
with regard to the classification of the appellant's product sold
in the market as a "hair dye" in relation to the entries under the
Central Excise Tariff. While deciding the said issue, it will have
to be borne in mind that at the relevant point of time, namely,
E during January, 1982, to December, 1982, there was no spe-
cific entry under the Central Excise Tariff regarding "hair dyes",
although, "hair lotion" was specified under Tariff Item 14F and
that only with effect from 1st March, 1975, a residuary entry,
namely, Tariff Item 68, was introduced, whereby goods which
F had not been specifically included under any of the other Tariff
Items, were made exigible, though at the rate of 8% only.
14. Appearing for the appellant company, Mr. Ashok Desai,
learned senior advocate, submitted that the relevant period in-
volving the demand for payment of excise duty on "hair dye"
G treating the same to be covered by Tariff Item 14F, was for the
period from January, 1982 to December, 1982. He also pointed
out that by the Finance Act, 1961, Tariff Item 14F was introduced
to cover Cosmetics and Toilet Preparations as indicated here-
inbelow:-
H
GODREJ INDUSTRIES LTD. v. D.G. AHIRE ASS. 577
COLLECTOR OF CENTRAL EXCISE & ANR. [ALTAMAS KABIR,J. ]

"14F - Cosmetic and T0ilet Preparations not containing A
alcohol or Opium India Hemp or other Narcotic Drugs or
Narcotics, namely:
(i) Face Cream and Snow;

~
(ii) Face Powder; B
(iii) Talcum Powder;
(iv) Hair Lotion, Cream and Pomade."
15. Mr. Desai submitted that in view of the above, only
those products, which fell within the categories indicated in 14F c
became taxable for the first time in 1961 .
16. In May, 1974, Godrej Soaps introduced a new prod-
uct known as "Godrej- Permanent Hair Dye" (Liquid Hair Dye)
in the market. The said product was comprised of two compo-
: >' D
~ nents; one being a darkener and the other being a developer,
which were required to be mixed in equal proportion to apply
on hair for the purposes of darkening gray hair. Mr. Desai sub-
mitted that since the said substance was poisonous in nature,
very elaborate instructions had been provided along with the
E
product for its application. At that point of time, no excise duty
was levied on the said product under Tariff Item 14F.
17. It was then submitted that on 1st March, 1975, Finance
Act, 1975, introduced a residuary entry, namely, Tariff Item 68,
.... in the First Schedule to the Central Excise and Salt Act, 1944 F
¥
which reads as follows:-
"68 - All other Goods, not elsewhere specified."
Mr. Desai submitted that by virtue of such entry, all goods,
including the liquid hair dye manufactured by the appellant be- G
came, exigible at the rate of 8%.
~')' 18. As submitted by Mr. Desai, the appellant's aforesaid
product appears to have been sent for analysis to the Deputy
Chief Chemist and by h;s letter dated 3rd March 1975, the Su-
perintendent of Central Excise Range IV, Division VII, informed H
578 SUPREME COURT REPORTS [2008] 10 S.C.R.

A the appellant company as follows:-

"No.C.E (Samples)/75/540
B'bay 3/3/75
M/s. Godrej Soaps (P) Ltd.
B
Bombay
Gentlemen,

Sub: Sample of Godrej Permanent Hair Dye.
c Deputy Chief Chemist has opined that samples of "Godrej
Permanent Hair Dye"- Brown and Black" sent to him for analy-·
sis, do not fall under Tariff Item 14F(ll). This is for your informa-
tion.

D Yours faithfully, ( ,•
Sd/- 3.3.75 ~ I

Supdt. Of Central'Excise
Range IV, Division VII"
E
19.· ML Desai submitted that from the said letter it would
be clear that even the Department was alive to the fact that the
appellant's product "liquid hair dye' did not fall under Tariff Item
14F1 which necessarily implied that it did not answer to the de-
scription of "hair lotion" or "pomade" as included in Item No. (iv)
F of 14F introduced by the Finance Act of 1961 in the First Sched-
)>

'>(
ule to the Central Excise and Salt Act, 1944. According to Mr.
Desai, after introduction of Tariff Item 68 by the Finance Act of
1975, the appellant's aforesaid product became exigible un-
der the said entry for which excise duty was being duly paid.
G
20. Mr. Desai then submitted that an identical question,
which has been posed in this appeal, had been raised before
'>(-'
the Bombay High Court in the case of Chimanlal Beliram Mehta
vs. M.G. Vaidya, reported in [2000 (124) E.L.T. 40 (Born)], wr.~re
the plea that hair dye should not be exigible to duty as "tiair
H,
)
GODREJ INDUSTRIES l TD. v. D.G AHIRE ASS. 579
COLLECTOR OF CENTRAL EXCISE &ANR. [ALTAMAS KABIR,J.]

lotion" was not accepted and it was held that the same came A 1

within the definition of hair lotion and was thus exigible. Mr.
Desai submitted that the said decision had been rendered by
the Division Bench mainly on the basis of the analysis of the
components of the product. Subsequently, however, while deal-
ing with the same question relating to "Vasmol Emulsified Hair B
Oil" and "Vasmol Pomade" the learned Single Judge of the
Bombay High Court in the case of Subhash Chandarnishat vs.
Union of India (supra) had distinguished the decision on apply-
ing the principle of "common parlance" in describing the prod-
uct. Mr. Desai referred to the classic example on the concept c ,
of common parlance in The King vs. Planter Nut and Chocolate
Company (1951 Canada Law Reports - Exchequer Court p.
122) referred to by the learned Single Judge. The question in-
volved in the said decision was whether salted peanuts and
cashew nuts could be considered to be "fruit" or "vegetable" D
within the meaning of the Excise Tax Act. Cameron J., who
delivered the judgment, posed the test as follows :
" ...... would a householder when asked to bring home
fruit or vegetables for the evening meal bring home salted
peanuts, cashew or nuts of any sort? The answer is E
obviously 'no'."
21. It was then submitted that various affidavits affirmed
by customers regarding what they felt was meant by "hair lo-
tion" and "hair dye" had been placed before the departmental
authorities, but had not been given due importance in classify- F
ing the products in question. Taking note of the above, the
learned Single Judge went on to observe as follows:
"13. In my view, the impugned order of the respondent
No.2 shows that he has not really applied his mind to the G
aforesaid affidavits at all. Although he has noticed them,
• )r he has not considered properly the effect of these
affidavits. These affidavits were relevant pieces of
evidence showing as to how the aforesaid products were
regarded in trade and commerce parlance. Instead of H
580 SUPREME COURT REPORTS [2008) 10 S.C.R.

A giving due weight to these affidavits and considering their
effect, respondent No.2 has chosen to place undue reliance
on the chemical composition of the said products and to
some extent on the advertisements, which, I have already
pointed out, have moreover been misconstrued by him.
B He has further failed to take into account the effect of the
cautionary statements, which I have already referred to
earlier. In my opinion, respondent No.2, has in effect,
ignored the relevant material before him, namely, the said
affidavits and has adopted a wholly erroneous approach
c in making the impugned order. This is clearly not a case
where on the material before him two views were possible
or reasonably open to respondent No.2 and he has chosen
to adopt one of them. The evidence on record before
respondent No2 clearly showed that the aforesaid products
could not be fairly regarded as "hair dressing" or "hair
D
pomade" at all. If one were to pose the question in a
somewhat similar form to the question posed by the
Exchequer Court of Canada in The King v. Planters Nut
and Chocolate Co. Ltd. (1951 Canada Law Reports 122)
the question could be framed thus "Supposing a
E householder who wanted to darken his hair were to ask
his son to go to the provision store and get a bottle of hair
pomade or hair dressing, would he expect his son to come
back with "Vasmol Emulsified Hair" or "Vasmol Pomade".
The answer to that question in my opinion, would be clearly
F in the negative on the evidence on record in this petition.
In my view, therefore, the decision of respondent No.2 is
liable to be quashed."
22. Mr. Desai submitted that the learned Judge went on to
G hold that "Vasmol Emulsified Hair Oil" and "Vasmol Pomade"
were not covered by Item 14F of the First Schedule to the Act
and were not exigible to excise duty under that item. ?("

23. Mr. Desai also referred to a decision in Godrej Soaps
Ltd vs. State of Andhra Pradesh, reported in [1983 (53) STC
H 376], relating to the very same product, namely, "Godrej Per-
GODREJ INDUSTRIES LTD. v. D.G AHIRE ASS. 581
COLLECTOR OF CENTRAL EXCISE & ANR. [ALTAMAS KABIR,J.]

manent Hair Dye". In the said case, the Court was called upon A
to decide whether "hair dye" is a "hair lotion" which is one of the
items mentioned in Entry 36 of the First Schedule to the Andhra
Pradesh General Sales Tax Act, 1957. On considering the
meaning of the expression "lotion" in detail, the High Court came
to the conclusion that hair dye is a colouring material and is B
used to blacken gray hair. It was not used as a medicinal prepa-
ration to cleanse the hair or for skin disorder and was not, there-
fore, a hair lotion, within the meaning of entry 36 of the Andhra
Pradesh General Sales Act, 1957 and was, therefore, taxable
under the said Act. c
24. It was submitted that as required under the Rules, the
appellant company as assessee filed Classification List No.
484 of 1979 classifying "Godrej Permanent Hair Dye" (Liquid
Hair Dye) under Tariff Item 68 and it had been duly approved by
· t the Department. D
~
25. Despite the above, on 13th July, 1982, the respondent
issued a show-cause notice to the appellant as to why the said
"hair dye" should no~ be classified under Tariff Item No.14F. It
was also mentioned that while the matter was pending determi-
nation the classification of the said product would continue un- E
der Tariff Item 68 on a provisional basis under Rule 9D. On 2nd
August, 1982, a show cause-cum-demand notice was issued
by the Department alleging short payment of duty under Tariff
Item 14F for the period from January, 1982 to June 1982. The
said notice was followed by two other show-cause-cum-demand F
notices, for the periods from July to September, 1982 and from
October to December, 1982. Mr. Desai submitted that before
the Adjudicating Authority several affidavits sworn by various
dealers, retailers and consumers, were filed to show that in com-
mercial parlance, people who dealt with "hair dye" and "hair lo-
tion" considered them to be separate and distinct products. The
GI
Assistant Collector by his order dated 241h May, 1983, rejected
the explanation given by the appellant company and confirmed
the demand made by the Department by the· several show-
cause-cum-demand notices dated 13th July, 1982, 2nd August,
1982, 27th December 1982 and 17th February, 1983. H
582 SUPREME COURT REPORTS [2008] 10 S. C.R.

A 26. It was submitted that being aggrieved by the said or-
der of the Assistant Collector, the appellant filed Writ Petition
No., 1460 of 1983 in the Bombay High Court challenging the
said order of the Assistant Collector dated 241h May, 1983, to-
.gether with the various show-'cause-cum-demand notices issued
B from time to time. By its judgment and order dated 171h Sep- ,_
tember, 1982, the High Court dismissed the writ petition and
upheld the order of the Assistant Collector and directed that the
demand be paid.
27. This appeal has been filed against the judgment and
C order of the High Court dismissing the writ petition filed by the
appellant herein.
28. Relying heavily on the decision ofthe learned Single
Judge of the Bombay High Court in Subhash Chandarnishat's
D case (supra), Mr. Desai urged that the Division Bench of the 1 :
Bombay High Court had wrongly arrived at the conclusion that }· \
the appellant's "hair dye" was in fact "hair lotion": Elaborating
on his submissions with regard to the application of the com-
mercial parlance test to determine classification of a product
Mr. Desai besides referring to the Planters Nut case also re-
E ferred to the case of Dunlop India Limited Vs. Union of India,
reported in [1976 (2) SCC 241], in which this Court while deal-
ing with VP Latex and referring to the Planters Nut case with
approval, held that in interpreting the meaning of words in a
taxing statute, the acceptance of a particular word by the trad-
F ers and its popular meaning should commend itself to the au-
thority. It also held that meanings given to articles in a fiscal
statute must be as people in trade and commerce, conversant
with the subject, generally treat and understand them in the usual
course.
G
29. Reference was also made to the decision of this Court
in the case of Ram Avtar Bhudiaprasad vs. Assistant Sales Tax
Officer reported in [1962 (1) SCR 279] wherein while dealing
with the meaning of the word "vegetable" occurring in C.P. and
Berar Sales Tax Act 1947, this Court held as follows:-
H
GODREJ INDUSTRIES LTD. v. D.G AHIRE ASS. 583
..~ COLLECTOR OF CENTRAL EXCISE &ANR. [ALTAMAS KABIR,J.]

'This word must be construed not in any technical sense A
nor from the botanical point of view but as understood in
common parlance. It has not been defined in the Act and
being a word of every day use it must be construed in its
popular sense meaning 'that sense which people
conversant with the subject-matter with which the statute B
is dealing would attribute to it'. It is to be construed as
understood in common language."
.
31. The decision of this Court in Commissioner of Sales
Tax, Madhya Pradesh, Indore vs. M/s Jaswant Singh Charan
Singh, reported in [1967 (2) SCR 720], where this Court was C'
dealing with the word 'charcoal', reiterated the same sentiments
as were expressed in Ramavtar Budhiaprasad's case (supra).
32. Mr. Desai also submitted that this Court has repeat-
edly held that affidavits cannot be disreg~rded, if no evidence D
to the contrary was produced.
33. It was lastly submitted by Mr. Desai that the use of the
word "namely" in Tariff Item 14F would have to be interpreted as
exhaustive and confined only to those products specifically men-
tioned therein against items (i) to (iv). The said expression had E
been held in various decisions as an equivalent of the expression
'that is to say'. Also referring to the various internet extracts pro-
duced on behalf of the appellant company, Mr. Desai concluded
by urging that both the Department and the High Court had erred in
law in disregarding the well established common parlance test, F
particularly when the product of the appellant is a counter article
available on demand. Mr. Desai submitted that the ordinary con-
sumer does not depend on the text-book concept of "hair lotion" or
"hair producf' but on the common man's understanding of the prod-
uct. Mr. Desai submitted that the judgment and order of the High G
. .,.. )'
Court, as also that of the Assistant Collector of Central Excise,
holding that the appellant's product - "liquid hair dye" was "hair
lotion" and including the same in Tariff Item 14F, in place of Tariff
Item 68 of the First Schedule to the Central Excise and Sale Act,
1944, was erroneous and liable to be set aside.
H
584 SUPREME COURT REPORTS [2008] 10 S.C.R.

A 34. Replying to the submissions made on behalf of the
appellant, the learned Additional Solicitor General, Mr. M.
Chandra Shekharan, submitted when the Division Bench had
found that "hair dye" was, in fact, a "hair lotion", the view ex-
pressed by the learned Single Judge in Subhash
B Chandarnishat's case, could not be given undue importance
as has been done on behalf of the appellant. Referring to the
Chambers 2Q1h Century Dictionary, the learned Additional So-
licitor General submitted that in the said Dictionary 'Pomade'
has been defined to be an ointment for the hair, whereas a lo-
C tion is a liquid preparation, either medicinal or of a cosmetic
nature. It was submitted that "Vasmol Pomade" was different
from the appellant's product in that it contains a small amount of
lead acetate and sulphur precipitator and the rest of the mate-
rial is basically herbal jelly to which herbs and perfumes are
D added. As to the affidavit filed before the learned Single Judge,
it was submitted that the same had been affirmed by persons
who claimed to be either dealers of "Vasmol Products" or con-
sumers of the same and that they have merely stated that the
said product was sold and purchased mainly as "hair dye"
E 35. It was submitted that the expression "namely" used in
Tariff Item No. 14F had been used in an illustrative and not in a
restrictive sense and that the use of the expression "namely" in
the Tariff Item did not mean that only the items specified therein
would fall within its ambit. It was submitted that the learned Single
F Judge had incorrectly held that items or entries in taxing stat-
utes have to be understood according to the meaning given by
people in trade and commerce, who were conversant with the
subject and that technical and scientific tests offer only guid-
ance within limits. The learned Additional Solicitor General sub-
mitted that the affidavits filed before the learned Single Judge
G were from traders who stated that "Vasmol Products" were hair
darkeners and were not sold as cosmetics. Affidavits filed by
users stated that "Vasmol" was being used by them as "hair
dye" and not as "hair lotion" or "hair cream". Accordingly the
learned Single Judge held that the concerned Vasmol products
H were "hair dyes" and not "hair lotions".
.. ,.
GODREJ INDUSTRIES LTD. v. D.G AHIRE ASS. 585
COLLECTOR OF CENTRAL EXCISE & ANR. [ALTAMAS KABIR,J. ]

36. The learned Additional Solicitor General submitted that A
the Division Bench had held that the report of the Deputy Chief
Chemist, Mumbai and the Chief Chemist, Central Revenue, New
Delhi and several books and periodicals, which had been re-
lied upon by the petitioners during the hearing of the appeal,
had been considered by the authorities before coming to the B
conclusion that the product in question was a "hair lotion". It was
submitted that the Division Bench had, on placing reliance on
standard text-books on which the appellants had relied, indi-
cated that the two expressions "Hair Lotion" and "Hair Dye" could
be used interchangeably in the commercial world and that sev- c
eral such products which are nothing but dye, usually with lead
base have been known as "Hair Restorers" which wnre expected
· to achieve what a "Hair Lotion" or "Hair Tonic" was also expected
to achieve. The use of the product as a hair darkener, though a
relevant factor, would not be a deciding factor in the matter. The
> learned Additional Solicitor General submitted that the learned
D
-1
Single Judge had deviated from the Rule of precedent and hav-
ing regard to the decision of this Court in Bharat Sanchar Nigam
Ltd. Vs. Union of India [2006 (3) SCC 1] could not have taken a
view different from that of the Division Bench.
E
37. From the submissions made on behalf of the respec-
tive parties and the materials on record, it is clear that the prod-
uct of the appellant company is undoubtedly, a hair darkener.
Whether it also acts as a hair lotion, is the question which calls
t for decision in order to establish whether the said product would F
..... fall under Tariff Item 14F. Extensive arguments were advanced
by Counsel for both the parties regarding the chemical compo-
sition and the common parlance understanding of the product.
The aforesaid product of the appellant company also appears
to have been sent for analysis to the Deputy Chief Chemist and
his decision was conveyed by the Superintendent of Central
G
Excise Range IV, Division Vil, to the appellant company to the
... 'f
effect that the said product did not fall under Tariff Item 14F.
Apart from the above, when cosmetics and toilet preparations
were made taxable by virtue of the Finance Act, 1961 , whereby
H
586 SUPREME COURT REPORTS [2008] 10 S.C.R.

A Tariff Item 14F was introduced to cover such preparations, hair
lotion as a separate category was included in the said Tariff
Item. However, when in May, 1974, the appellant's company
introduced its aforesaid product labeled-Godrej-Permanent
Hair Dye, no excise duty was levied on the said product under
s Tariff Item 14F. It was only after the Finance Act, 1975, intro-
duced a Residuary Entry, being Tariff Item No. 68, in the First
Schedule to the Central Excise and Salt Act, 1944, that the
appellant's product became taxable on and from 1s1 March,
1975, under Tariff Item 68. However, while under Tariff Item No.
C 14F tariff was imposed at the rate of 105%, tariff under Tariff
Item 68 was imposed at the rate of 8%. It is subsequent to the
introduction of Tariff Item No. 68 that the appellant's company
was informed that its above-mentioned product did not fall un-
der Tariff Item No.14F.
D 38. From the decisions cited by Mr. Desai, it would be <
clear that there is substantial difference between a hair dye and ~
pomade and that while pomade is an ointment for hair, a lotion
is used as a medicinal preparation to cleanse hair or for skin
disorders. Since neither of the two definitions answers the de-
E scription of the appellant's product, the Court came to the con-
clusion that the said product was merely a colouring material
used for blackening gray hair and not a hair lotion which would
stand covered by Tariff Item 14F of the First Schedule to the
Act.
F 39. The Division Bench of the Bomaby High Court in the
case of Chimanlal Beliram, had no doubt, come to the conclu-
sion that the product in question was a hair lotion. While doing
so, the Division Bench had relied on the standard text-books
which indicated that the expressions "hair lotion" and "hair dye"
G could be used interchangeable in the commercial world and
that several such products which are nothing but dye usually
with lead base have been known as "hair restorers" which were
expected to achieve what a hair lotion or hair tonic was also
expected to achieve. A good deal of argument was also ad-
H vanced by learned counsel for the parties with regard to Subhash.
GODREJ INDUSTRIES LTD. v. D.G. AHIRE ASS. 587
COLLECTOR OF CENTRAL EXCISE & ANR. [ALTAMAS KABJR,J. ]

Chandernishant's case(supra) wherein a learned Single Judge A ·
distinguished the decision of the Division Bench in ChimanlaJ
Beliram Mehta's case (supra) relying on classification of a prod-
uct by virtue of the doctrine of common parlance.
40. The expression "lotion" has been described in Collins
English Dictionary as "a liquid preparation having a soothing, 8
cleansing or antiseptic action applied to the skin, eyes etc.". It
has also been indicated that the word "lotion" had been derived
from the Latin word "lotio" meaning - a washing. Nothing has
been disclosed from any of the technical information gleaned
from standard text-books that the appellant's product was any- C
thing more than a hair colouring agent or that it was or could be
used to have a soothing cleansing or antiseptic action while
washing out one's hair. From the chemical analysis of the
appellant's product nothing has also been shown as to whether
the same could be applied to the scalp for restoration or nour- D
ishment of hair, which could bring it within the definition of "lo-
tion" as a medicinal product.
41. Apart from the above, even in common parlance or
trader's jargon a hair dye, unless it had other properties be-
sides the capacity to darken hair, could not be equated with E
hair lotion. Although, not much weight has been given to the
affidavits filed on behalf of the appellant's company, the same
cannot be brushed aside in determining what a common man
or a trader would understand by the expressions "hair lotion"
and "hair dye". While in a generic sense a hair dye may also be F
referred to as hair lotion, for the purposes of a taxing statute, its
chemical composition and actual usage become relevant.
42. Mr. Desai laid great emphasis on the fact that the
appellant's prepar~tion was poisonous and had to be used with G
great care and caution in the m·anner indicated in the literature
supplied with the product. The natural corollary of such submis-
sion is that the said product could not, therefore, be treated as
a lotion to be used either as a scalp or hair nourisher or for
medicinal purposes.
H
588 SUPREME COURT REPORTS (2008] 10 S.C.R.

~-:
A 43. We are, therefore, satisfied that the view taken by the' \
High Court was erroneous and during the relevant period,
namely, January, 1982 to December, 1982, the demand made
on behalf of the Revenue for payment of tariff according to Tariff
Item 14F was erroneous and the.judgment of the High Court
s based thereupon is liable to be set aside. ,__
44. We, accordingly, allow the appeal, set aside the order
of the High Court impugned in the appeal and quash the de-
mand Notices dated 2nd August, 1982, 27th December, 1982
and 17th February, 1983 covering the period from January, 1982
C to December, 1982 demanding payment of excise duty under
Tariff Item 14F of the First Schedule to the Central Excise and
Sal Act, 1944.
45. Having regard to the facts of the case, the parties will
bear their own costs.
R.P. Appeal allowed.