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Commissioner of Central Excise, Chennai-I Versus Impcops

2015 (10) TMI 1568 - CESTAT CHENNAI

Classification of goods - Ayurvedic formulations / medicaments - products viz., 'Neelibhringadi Thailam (Gingelly Oil base), Neelibhringadi Thailam (Coconut Oil base) and SugandhamThailam and Danta Dhavana Churnam' - whether the impugned goods are classifiable under chapter 3305.99 according to the Revenue or classifiable under chapter 3303. 39 according to the respondents and whether Danda Dhavan Churam is classifiable under chapter 33.06.10 according to the Revenue or classifiable under chapte .....

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ing the Apex Court decision [2013 (8) TMI 467 - SUPREME COURT] and the decision of the Tribunal [2007 (2) TMI 573 - CESTAT, AHMEDABAD], the impugned order is upheld - Decided against Revenue. - Appeal No. E/207/2003, E/497/2003 & E/509/2004 - Final Order Nos. 41205-41207/2015 - Dated:- 11-9-2015 - R Periasami, Member (T) And P K Choudhary, JM For the Appellant : Ms Indira Sisupal, AC (AR) For the Respondent : Shri Srinivasan, Adv ORDER Per P K Choudhary The issue involved in the present appeals .....

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s) while taking into account the entire facts and circumstances of the case has accepted the assessee's stand that the goods are to be classified as ayurvedic medicaments and has dropped the proceedings against them. Hence, the present appeals. Appeal No.E/509/04 OIA 9/04 dt. 29.01.2004 1. NeelibringadiThailam (with coconut oil base) 2. NeelibringadiThailam (with Gingelly oil bas) 3, SuganthamThailam hair oil Classification 30.03.39 by the respondents and 33.05.90 by the department. Appeal N .....

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ir oil Classification 30.03.39 by the respondents and 33.05.90 by the department 4. Danda Dhavana Churnam Classification 30.03.39 by the respondents and 33.06.10 by the department 2. Ld. AR for the Revenue reiterated the grounds of appeals and submitted that the main contentions of the revenue are as follows:- i) Thailams are of coconut or gingelly oil based and are meant for the use of the scalp/hair. ii) The assessee has not proved exactly as to whether the products are substantial or subsidia .....

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omers, bought and sold without any prescription of the doctor which confirms that the curative or prophylactic users are subsidiary and not substantial. 3. He however, heavily relied on various judicial pronouncements to stress the point that common parlance theory would be the only guide to determine the classification of the impugned goods and therefore the appeal of the revenue should be allowed. He relied on the decision in the case of Puma Ayurvedic Herbal (P) Ltd. Vs. CCE, Nagpur 2006 (196 .....

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0. It will be seen from the above definition of cosmetic that the cosmetic products are meant to improve appearance of a person, that is, they enhance beauty. Whereas a medicinal product or a medicament is meant to treat some medical condition. It may happen that while treating a particular medical problem, after the problem is cured, the appearance of the person concerned may improve. What is to be seen is the primary use of the product. To illustrate, a particular Ayurvedic product may be used .....

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. The revenue having accepted that the goods under dispute are manufactured as per the ayurvedic pharmacopeia by use of the ingredients set out in the said pharmacopeia merely because it is applied on the hair for purity performances cannot propose the reclassification of the already accepted classification under Chapter 30. 2. The finding of the original authority that the market enquiries revealed that these products are generally available to customers and are brought and sold without any pre .....

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rams/brand effect of IMPCOPS and non-indication of the product that they are to be strictly used under medical prescription even while admitting that the label contained the inscription ayurvedic medicine could in no way lead to the conclusion that the products could be regarded as cosmetics and not as medicine. 4. The levy of sales tax as per a different enactment namely Tamil Nadu General Sales Tax Act could in no way be a ground for revising the accepted classification under the Central Excis .....

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n who do not have the ailment or defect would be willing to buy and use these products. 6. The reliance placed on Note 1(1) of Chapter 30 and Note 2 of Chapter 33 has no application to the case of the respondent as the revenue failed to note that as per note 2 to chapter 33, the product must first be a cosmetic and that it must be used as such and it should also be put in such packing declaring it to be a cosmetic product (para 31 of BPL Pharmaceutical case decided by the Hon'ble Supreme Cou .....

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relied upon by the respondents:- 1. CCE Delhi Vs. Ishaan Research Lab Pvt. Ltd. 2008 (236) ELT 7 (S) 2. CCE, Nagpur Vs. Baidyanath Ayurved Bhavan Ltd. 2009 (237) ELT 225 (SC) 3. CCE, Mumbai-IV Vs. CIENS Laboratories Mumbai 2013 (295) ELT 3 (S.C) 4. We have carefully considered the submissions from both sides and perused the records. The main issue involved in these cases is whether the impugned goods are classifiable under chapter 3305.99 according to the Revenue or classifiable under chapter 33 .....

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ss is as outlined in the authoritative books of ayurveda, the formula is that as mentioned in Sahasrayogam with reference to the Neelibhringadi Thailam which is made with coconut oil base and Neelibhringadi Thailam which is manufactured with Gingelly oil base, the other products viz. Sugandham Thailam and Danda Dhavana Churnam are manufactured as per the classical formula prescribed in Vaidya Yoga Ratnavai, a Formulary of Ayurvedic Medicines. 3. It was further pleaded by the Ld. Counsel represen .....

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must find a place in authoritative texts of the ayurveda, Unani and siddha system. 4. Indian Medical Practitioners Co-operative Pharmacy and Stores Ltd. the appellant is a manufacturer of various ayurvedic medicaments; they have the necessary drug licences from the proper authority for the products manufactured. 5. The products in question have substantial therapeutic value, the ingredients are only medicinal in nature; the product in question are prescribed for use by ayurvedic doctors as a me .....

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lassify the product in question under 3305. 7. Major reasons for classification as a medicament are: a. The goods have been manufactured as per formula in the ayurvedic system of medicine for which a drug licence has been issued b. The three thailams are understood by doctors, dealers and users to be primarily an ayurvedic medicament c. The goods are certified by doctors to be useful in treating certain skin disorders of the scalp and face, prevent hair falling and gives coolness to the eyes and .....

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eated as medicament. This contention also has been rejected by this Court in Commissioner of Central Excise, Calcutta v. Sharma Chemical Works - 2003 (154) E.L.T. 328 (S.C.) To quote : "12. Mere fact that a product is sold across the counters and not under a Doctors prescription, does not by itself lead to the conclusion that it is not a medicament. We are also in agreement with the submission of Mr. Lakshmikumarn that merely because the percentage of medicament in a product is less, does a .....

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ary formula. The main criteria for determining classification is normally the use it is put to by the customers who use it.... (Emphasis supplied) 15. In Puma Ayurvedic Herbal (P) Ltd. v. Commissioner of Central Excise, Nagpur - 2006 (196) E.L.T. 3 (S.C.) , it was held that the purpose of cosmetic product is to improve the appearance of a person and for enhancing the beauty whereas a medicinal product or medicament is meant to treat some medical condition. It was also held that merely because a .....

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It may happen that while treating a particular medical problem, after the problem is cured, the appearance of the person concerned may improve. What is to be seen is the primary use of the product. To illustrate, a particular Ayurvedic product may be used for treating baldness. Baldness is a medical problem. By use of the product if a person is able to grow hair on his head, his ailment of baldness is cured and the persons appearance may improve. The product used for the purpose cannot be descr .....

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vehicles in order to make the medicament useful. To illustrate an example of Vicks Vaporub is given in which 98% is said to be paraffine wax, while the medicinal part i.e. Menthol is only 2%. Vicks Vaporub has been held to be medicament by this Court in C.C.E. v. Richardson Hindustan Ltd. - 1989 (42) E.L.T. A100. Therefore, the fact that use of medicinal element in a product was minimal does not detract from it being classified as a medicament. 22. In order to be a medicinal preparation or a me .....

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is of importance is the curative attributes of such ingredients that render the product a medicament and not a cosmetic. Secondly, though a product is sold without a prescription of a medical practitioner, it does not lead to the immediate conclusion that all products that are sold over/across the counter are cosmetics. There are several products that are sold over-the-counter and are yet, medicaments. Thirdly, prior to adjudicating upon whether a product is a medicament or not, Courts have to s .....

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medicament. 6. The Ahmadabad Bench of the Tribunal in the case of CCE, Rajkot Vs. Ban Labs PVt. Ltd. 2009 (236) ELT 542 (Tri.-Ahmd.), held that the oil with ingredients specified in the authoritative books and manufactured with licence from Drugs Control Authority are classifiable as ayurvedic medicine under sub-heading 3003.99 of Central Excise Tariff and not as hair oil under sub-heading 3305.99. The relevant portion of the said decision is reproduced as under:- "3. By taking the above f .....

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