TMI Blog2001 (12) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed on the appellant. In classifying Himtaj Tel as above, the Commissioner relied on a decision of the Delhi Bench of this Tribunal dated 28-9-99 reported as CCE, Allahabad v. Himtaj Ayurvedic Kendra, 2000 (125) E.L.T. 765 (Tribunal). In the meanwhile the East Zonal Bench of this Tribunal had taken a different view in its Final Order No. 848/CAL/2000, dated 9-6-2000 [2001 (137) E.L.T. 692 (Tribunal)] classifying identical goods under Chapter sub-heading 3003.30 as Ayurvedic medicine. It was in the light of the conflicting views expressed by two Benches that the issue is referred for consideration of a Larger Bench. 4. It is alleged that the appellant had commenced manufacture of Himtaj Tel in April 1987. The appellant has a licence issued under the provisions of Drugs and Cosmetics Act, 1940 to manufacture for sale Ayurvedic (including siddha and unani) drugs. One of the Ayurvedic medicines manufactured by the appellant on the basis of the above mentioned licence is Himtaj Tel . Appellant would further contend that the ingredients based on which the oil was manufactured are duly mentioned in the Authoritative Ayurvedic Text Book, namely, Bhav Prakash mentioned in the Firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner s product is not an Ayurvedic medicine as it was not prepared in accordance with any formula prescribed in any text book of Ayurveda and its name is not finding a place in the authoritative text book is not correct. In support of the above contention, the learned Counsel placed reliance on a decision of the Tribunal in CCE, Bombay-II v. Maneesh Pharmaceuticals Pvt. Ltd., 1998 (97) E.L.T. 152 (Tribunal). It was further contended that the specific finding entered in the judgment of the Allahabad High Court in M/s. Balaji Agency v. Commissioner of Sales Tax, U.P., 1994 (19) STJ-150 that Himtaj oil is an Ayurvedic medicine cannot be brushed aside only for the reason that it was rendered in proceedings under the Sales Tax Act. 7. Referring to the Heading of Chapter 33, the appellant would contend that its product would not come under this Chapter at all. The Chapter Heading covers essential oils and resinoids, perfumery, cosmetic or toilet preparations . Heading 33.05 refers preparations for use on the hair and sub-heading 3305.10 is perfumed hair oils . What is the nature of the products covered by Heading 33.05 is indicated in Chapter Note 6 which says that heading 33.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yogashram v. State of Maharashtra, 1968 (22) STC 76. The learned Counsel points out that dictum in the Madras decision has been subsequently followed by this Tribunal in Prakash Trading Co. v. CCE - 1990 (46) E.L.T. 420 (T). Since in the present case the Revenue has not been able to show that any ingredient other than those mentioned in the Ayurvedic Text Books has been used in the product, it would not sastisfy the description of a perfumed oil . 10. It was pointed out on behalf of the appellant that in the Drug Licence issued to the appellant, details of ingredients used in the oil are given. The reference made to the Authoritative Text Book of Ayurveda in Annexure 3 would clearly show that its product is an ayurvedic medicament. Annexure 4 are copy of Report from the Dean Faculty of Ayurveda, Institute of Medical Sciences, Banaras Hindu University, Varanasi which would go to show that Himtaj Oil was prescribed to patients suffering from headache due to different causes and it was found that the oil could be safely used for treatment of headache. He has given the relevant data for coming to the above conclusion. Annexure 6 is a communication from Collector of Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were to the same effect. In both the Reports the Chief Chemist found that it was composed of vegetable oil and no synthetic perfumery chemical could be detected. In the second Report he had given more details of its constituents and their therapeutic effect. He had come to the conclusion that there are grounds to consider the product as medicament . The learned Counsel would point out that there was no justification in rejecting the two Reports given by the Chief Chemist only for the reason of a conflicting Report given by the Chemical Examiner on 5-2-1993 (Annexure 11 ). A reference to the Report itself would show that the Chemical Examiner does not say that it is not an ayurvedic medicament . The communication addressed to him called for report whether Himtaj Oil may be classified under Chapter Heading 3305.10 as perfurmed hair oil in view of Chapter Note 1(d) of Chapter 30 of Central Excise Tariff Act. To this query he reported the sample is in the form of red colour free flowing liquid having pleasant odour. It is perfumed (vegetable oil) put up in a unit container. The oil is presented for sale indicating its use as fljnnZ uk'kd ds'k o/kZd 'khry lqxaf/kr may be, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in detail to the two conflicting decisions of the Tribunal and the authorities relied upon by both the sides, we will first refer to the relevant provisions of law. Chapter 30 of the Central Excise Tariff Act deals with pharmaceutical products. Heading 30.03 covers medicaments (including veterinary medicaments). The term medicaments has been defined under Note 2(i) under Chapter 30 which reads as follows :- 2. For the purposes of heading No. 30.03 : (i) medicaments means goods (other than foods or beverages such as dietetic, diabetic or fortified foods, tonic beverages) not falling within heading No. 30.02 or 30.04 which are either :- (a) products comprising two or more constituents which have been mixed or compounded together for therapeutic and prophylactic uses; or (b) unmixed products suitable for such uses put up in measured dose or in packings for retail sale or for use in hospitals. Note 1(d) provides that preparations of Chapter 33 even if they have therapeutic or prophylactic properties would not be covered by Chapter 30. Therefore, in the present case we have to examine whether the product of the appellant is an ayurvedic medicament and secondly even it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31, 3003.32 and 3003.39 which read as follows :- 3003.31 - Manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 (23 of 1940) or Homoeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homoeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopoeia. 3003.32 - Medicaments (including veterinary medicaments) used in bio-chemic system and not bearing a brand name. 3003.39 - Other. 19. In this connection we may also refer to certain provisions in the Drugs and Cosmetics Act, 1940 which have relevance to the issue raised in this case. Term Ayurvedic, Siddha or Unani drug is defined under Section 3(a) of the above Act as follows :- 3(a) Ayurvedic, Siddha or Unani drug includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of (disease or disorder in human beings or animals, and manufactured) exclusively in accordance with the formulae described in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with the formulae prescribed therein. Support was also sought from another decision of the Tribunal in B.K. Products v. Collector, 1998 (104) E.L.T. 430. Reliance was also placed on CCE v. Warner Hindustan Ltd., 1989 (42) E.L.T. 33. The decisions relied on by the respondents therein namely, Collector v. Maneesh Pharmaceuticals Pvt. Ltd. was distinguished by the Bench and also noted that Naturelle Health Products Pvt. Ltd. was not brought to the notice of the Bench which decided Maneesh Pharmaceuticals case. Decision of the Allahabad High Court in Balaji Agency v. CST, 1994 (19) STJ 150 was also distinguished by the Bench for the reason that the case arose under the provisions of the Sales Tax Act. The Bench after finding that the product cannot come under Chapter 30, proceeded on the basis that there is no dispute that it is perfumed oil and it is used on the hair. Therefore, even if it has some subsidiary curative or prophylactic value it would fall for classification under sub-heading 3305.10. It was then held that the product is not eligible for exemption under Notification No. 75/94. 22. In the order passed by the Calcutta Bench in Pandit D.P. Sharma v. CCE, Calcutta we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted the clear observation in the Report of the Chief Chemist that the ingredients used in the product have been mentioned in the ayurvedic books which factor is corroborated by issuing of a licence to the appellant by the Drug Controller. The Bench took into consideration the other materials produced before it, namely, the authoritative reports based on study of the appellant s product. Ultimately the Calcutta Bench agreed with the view taken by the Assistant Commissioner that Himtaj Oil is an Ayurvedic medicament classified under 3003.30 and not under 3303.10 as a perfumed hair oil . 23. The appeal from which the present reference arose is against the order of the Commissioner of Central Excise, Allahabad dated 31-10-2000. The period involved is from 17-8-1992 to September 1995. A reference to the impugned order would show that M/s. Pandit D.P. Sharma, West Bengal is a sister concern of the appellant herein. Both are engaged in the manufacture of Himtaj Oil . The product manufactured by the Varanasi Unit and the West Bengal Unit bore the same Trade Mark Registration and copy right Registration. They are sold in the market in identical packing bearing the photograph of Pt. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Notification No. 75/94-C.E., dated 29-3-1994 Ayurvedic system of medicines prepared in accordance with the formulae given in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 and sold under a generic name were granted full exemption from excise duty. The goods against sub-heading 3003.30 were classified again into three as mentioned earlier. Admittedly, the appellant s product will not come within the 1st item, since it is not manufactured exclusively in accordance with the formulae described in the authoritative books and sold under the name as specified in such books. According to the appellant, the product contains only ingredients specified in the Ayurvedic Text included in the First Schedule to the Drugs and Cosmetics Act, but manufactured as per the formula of the manufacturer. It is not sold under the name specified in the ayurvedic text. Therefore, even if the product is not a classical ayurvedic medicament still it is an ayurvedic medicament namely, patent and proprietary ayurvedic medicament. The product has been identified by the Drugs Control authorities also in the same manner. If we refer to Notification No. 9/93, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusing citations and extracts from number of authoritative text books on Ayurveda found that almost all the ingredients of the product softovac are mentioned and described in the standard work on Ayurveda. The Tribunal also took into consideration affidavits from experts in Ayurveda submitted by the assessee before the Collector (Appeals). These affidavits certified that various ingredients as well as the preparations are in ayurvedic nature and known as Ayurvedic System. On the above basis, the Tribunal came to the conclusion that, although the formula is not described as such in the books, since the ingredients and their effects are discussed therein, the absence of specific formulae may not be material. It is relevant to note that the name of the product in the above case was also not the one mentioned in the text book. In spite of the above, the view taken is that a product can be classified as the Ayurvedic medicine if its ingredients are mentioned in the text books with reference to its medicinal effect. This decision was not followed in 2000 (125) E.L.T. 765 for the reason that Naturelle Health Products Pvt. Ltd. case was not placed before the Bench which decided that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alt Act in view of several judicial pronouncements. The argument put forward by the Revenue that one should go by the definition of Section 3(a) of the Drugs and Cosmetics Act to find out whether the product is an ayurvedic medicine was not accepted by the Tribunal. Admittedly the products concerned were not manufactured in accordance with the formulae in a text book and therefore it was contended that it will not come under 3003.30. The Tribunal took the view that the products should be classified under Central Excise Tariff Heading 3003.30 if it is found that in the common parlance it is known as Ayurvedic medicine and all ingredients are mentioned in the authoritative books on Ayurvedic medicines. It is not necessary that the product was manufactured in accordance with the formulae in the text book. To examine these aspects the matter was remanded. The Revenue took up the matter in appeal before the Supreme Court as Civil Appeal No. 2127/88. The appeal was dismissed on 10-1-89. It should, therefore, be taken that the Supreme Court has approved the two tests laid down in the decision of the Tribunal. 29. In Amrutanjan Ltd. v. CCE, 1991 (32) ECR 538 the Tribunal took the view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veda, Institute of Medical Sciences, Banaras Hindu University after conducting a clininical trial of the medicine on patients suffering from headache due to various causes would certainly support the contention of the appellant that its product is an Ayurvedic medicament having curative value. The Chief Chemist s Report dated 25-7-1994 also is to the effect that the product is an Ayurvedic medicament . The appellant has also produced materials like affidavits etc. to show that the product is understood as an Ayurvedic medicament in common parlance. 32. In the judgment of the Allahabad High Court in 1994 (19) STJ 150, even though Court considered a case which was under the provisions of the Sales Tax Act, the question which directly came up for consideration was whether Himtaj Oil is a cosmetic or a medicinal oil. The Assistant Commissioner (Judicial) took the view that it is a medicinal oil and its main function is to relieve from pain. This view was reversed by the Tribunal. The High Court of Allahabad did not agree. It upheld the view taken by the Assistant Commissioner (Judicial) and observed as follows :- There are many oils that are medicines used for massaging painful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same has been detailed. Annexure 5 reads as follows :- For Use/Doses :- (i) For Headache/Hemicrania :- Apply 1 to 2 ml. medicament at the effected side by way rubbing for 2 to 3 days or as directed by the physician. (ii) For Hotness of Head/Brain :- Use 1 to 2 ml twice i.e. morning and evening at least for a week regularly. (iii) For mental disorder due to brain ineffectiveness :- Use 1 to 2 ml medicament twice i.e. in the morning after bath and night before going to sleep for a period of 3 to 4 weeks for the first spell. Thereafter as per, advice of physician. (iv) For Ear and Teeth Pain :- Use the medicament with help of cotton in a stick at the effective places only 2 to 3 times a day for 2 days only. (v) For coolness of brain :- Rub lightly 1 to 2 ml of medicament twice a day for a period 2 to 3 weeks at the first instance, if necessary continue as per physician s advice. Nowhere on the carton there is any indication that it is a hair oil. If we go through the portion referred above, it can be seen that the oil has to be applied at the affected places for ear and teeth pain. For headache also it has to be rubbed at the affected side. It is also seen that the oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or consideration by the Supreme Court was whether Selsun is to be classified as medicine under Heading 3305.90, as claimed by the respondent. After referring to the label, literature and medicinal properties of the product in question, the Apex Court took the view that the product was not intended for cleansing, beautifying, promoting attractiveness or altering appearance. On the other hand, it was intended to cure certain diseases. The labels notified that it is a medical treatment for dandruff. It should be used twice weekly initially and then as often as necessary or as directed by the physician. Certain directions were also given as to its use. The hair had to be washed first and then the selsun should be massaged into the scalp and left for 2 or 3 minutes and thereafter rinsed thoroughly. The Court held that the fact that the appellant had previously described the product as Selsun shampoo will not conclude the controversy when the true nature of the product calls for examination. Reference was made to Note 2 under Chapter 33 and it was held that once therapeutic quality of the ingredient used, is accepted, thereafter it is not possible to hold that the constituent is subs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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