Win for Hindustan Unilever: CESTAT Confirms Classification of Petroleum Jelly Products like Aloe Vera and Baby Variants as Skincare Preparations [Read Order]

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled in favour of Hindustan Unilever Limited (HUL), holding that its classification of petroleum jelly products such as Aloe Vera and Baby variants under skincare preparations is correct.

HUL, the appellant, manufactures personal care products at its Skin Care Unit in Puducherry. The dispute arose over the classification of two of its products: Petroleum Jelly - Aloe Vera and Petroleum Jelly - Baby.

The appellant had classified these items under CETH 33049990, which pertains to skincare products not elsewhere specified. The department disagreed with this classification and issued an order confirming a different classification and consequent excise duty demands.

Aggrieved by the order passed by the Commissioner of Central Excise, Puducherry, HUL filed an appeal before the CESTAT. The appellant argued that the products in question are skincare preparations and were correctly classified under CETH 33049990. The appellant’s counsel referred to a recent decision by the same Tribunal in HUL’s own earlier case for a different period, where the Tribunal had accepted the same classification.

They also relied on a Supreme Court decision in Commissioner of Central Excise, Belapur v. Jindal Drugs Ltd., which upheld that even relabelling amounts to manufacturing and supported the appellant’s position.

The department’s counsel argued in defence of the impugned order but did not raise any new or substantial challenge to the classification adopted by HUL. The department’s representatives acknowledged the Tribunal’s earlier ruling but maintained their stand.

The two-member bench comprising P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) referred to its own earlier decision in HUL’s case and explained that the classification of the products as skincare preparations was appropriate. The tribunal also cited the Supreme Court’s ruling in the Jindal Drugs case, which supported the interpretation that cosmetic relabelling or packaging can fall under manufacture for classification purposes.

The tribunal set aside the Commissioner’s order and allowed the appeal, confirming that Petroleum Jelly - Aloe Vera and Petroleum Jelly - Baby are rightly classified under CETH 33049990. The appellant was granted consequential benefits, if any, as per law.

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