Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2021 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (6) TMI 1026 - AT - Central ExciseClassification of goods - ayurvedic medicaments - classified under Chapter 30 of the Central Excise Tariff Act 1985 or as cosmetics under Chapter 33 of the Tariff Act? - amendments made in the provisions of the Tariff Act w.e.f. 28.02.2005 - Effect on change in the classification of the products in dispute - discharge of burden to prove that the products are classifiable under Chapter 33 of the Tariff Act - applicability of Clause 3(c) of the General Rules. Whether the amendments made in the provisions of the Tariff Act w.e.f. 28.02.2005 have effected any change in the classification of the products in dispute as claimed by the department? - HELD THAT:- A perusal of Chapter Note 1(d) of Chapter 30 prior to 28.02.2005 shows that the said Chapter would not cover preparations of Chapter 33 even if they have therapeutic or prophylactic properties. Even after amendment, Chapter Note 1(d) shows that Chapter 30 would not cover preparations of Headings 3303 to 3307 even if they have therapeutic or prophylactic properties. Thus, even before the amendment or after the amendment Chapter 30 would not cover preparation of Chapter 33 or preparation of Headings 3303 to 3307 of Chapter 33. It has, therefore, to be first established that the preparations fall in Chapter 33 or Headings 3303 to 3307 of Chapter 33. The Heading of Chapter 33 both before the amendment and after the amendment is “essential oils and resinoids oils; perfumery, cosmetic or toilet preparations.” The Headings 3303 to 3307 or 33.03 to 33.07 of Chapter 33 deal with cosmetic products. It would, therefore, have to be first established by the department that the products of the appellant fall under Chapter 33 as cosmetics. The requirement prior to 28.02.2005 was that the products should be 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” - the requirement of a product to be suitable for use as cosmetics or toilets preparation continues. Much emphasis has been placed by the Learned Authorised Representative of the Department that for a product to be cosmetics the requirement that the packing should have a label mentioning that the product is for use as cosmetics or toilet preparation is no longer the requirement after the amendment. This may be so but the department has still to prove that the product is either cosmetic or toilet preparation. Whether the department has discharged its burden to prove that the products are classifiable under Chapter 33 of the Tariff Act? - HELD THAT:- It is seen that the Adjudicating Authority had noted that the products of the appellant contained ingredients which were ayurvedic in as much as they were mentioned in ayurvedic texts. The Department, however, failed to establish conclusively that the products manufactured by the appellant were cosmetics and only an inference that the products were cosmetics has been drawn because of the amendments made on 28.02.2005. Whether the products of the appellant are classifiable as medicament under Chapter 30 or as cosmetics under Chapter 33 of the Tariff Act? - HELD THAT:- Its need to be noted that the Commissioner while adjudicating on the seventh show cause notice examined in detail whether the products manufactured and cleared by the appellant were medicaments. The Commissioner after noticing that medicaments were substances having therapeutic or prophylactic uses, held that the preparations of the products manufactured and cleared by the appellant meet the requirements of medicaments prescribed under chapter 30 of the Tariff Act - The Commissioner thereafter examined whether the products were used for therapeutic/prophylactic purposes or beauty enhancement and on examination of the documents and submissions advanced on behalf of the appellant concluded that the products manufactured and cleared by the appellant were not meant for daily use or as a substitute for regular cosmetic products. The contention on behalf of the appellant that they were meant for therapeutic/prophylactic purposes was, therefore, accepted. The aforesaid findings of the Commissioner are based on appreciation of the legal and factual position emerging from examination of the products manufactured and cleared by the appellant. The Commissioner also observed that the products were neither meant for daily use nor they were cosmetics and were ayurvedic medicines classifiable under Chapter 30 of the Tariff Act. Whether Clause 3(c) of the General Rules can be applied in this case as held by the Adjudicating Authority? - HELD THAT:- Clause 3 (c) of the General Rules would apply only when the goods cannot be classified by the reference to (a) or (b). So far as appellant is concerned there is no doubt that the products would be classifiable under (b). Thus, clause (c) of the General Rules would have no application in the facts and circumstances of the present case - there is no manner of doubt that the products manufactured and cleared by the appellant are not cosmetics under Chapter 33 or 34 of the Tariff Act and are medicaments falling under Chapter 30 of the Tariff Act. Appeal allowed - decided in favor of appellant.
|