TMI Blog2006 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... nded to the Central Excise Tariff Act, 1985 (for short, 'the 1985 Act'). The said entry provides for excise duty at the rate of 8% ad valorem being Ayurvedic Medicament. A show cause notice was issued as to why the said product shall not be classified wider SH No.3305.99 being a cosmetic product attracting excise duty at the rate of 30% ad valorem. It was alleged that by wrong classification of its product there had been a short payment of central excise duty amounting to Rs,11,12,129/-. A demand of the said amount in terms of Rule 9(2) of the Central Excise Rules, 1944 (for short, 'the Rules') read with section 11A of the Central Excise Act, 1944 (for short, 'the 1944 Act') was issued. A penal action in terms of rule 173Q of Rules was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, Respondent disclosed the manufacturing process undertaken by it, which is as under: "(a) Aqueous extract of Mehandi, Bhringraj, Amla, Doodhi Seeds, Renukbeej, Ambagotti, is prepared and concentrated. (b) Coconut oil in hearted with Nagarevel Pan. (c) Concentrated equeous extract is added to coconut oil and boiled. (d) Milk solution is added to hot Coconut oil and boiled. Then kapur kachli powder is added. (e) Bulk is cooled and fragrance is added. It is kept for 7 days and filtered." The assessing authority in its order furthermore noticed: "They further submitted that the Coconut oil is used in the said Product for the purpose of using the same as base to enable application of the above referred Ayurvedic Ingredient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. They submitted that going by the contents of their product and manufacturing process set out hereinabove, theft product does contain Sugandhi Dravya i.e. perfume and accordingly it merits classification as perfume hair oil under 3305.10. In this context they refer to and rely upon the decision of Honourable Supreme Court of India in the case of Dumlop India Ltd., wherein the court has held as under: "When an article has by all standard reasonable claim to be classified under an enumerated item in a Tariff Schedule then it would be against the very principle of classification to deny it a parentage and consign it to an orphanage to the residuary clause (Para-37)". 8. The Tribunal, on the other hand, as indicated hereinbefore, procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdictional Adjudicating Authority to recompute the duty of excise payable by the appellants. We also agree with the learned advocate that the issue involved being classification of a product for which classification declaration was filed by the Appellants, penalty under Rule 173Q of the Central Excise Rules, 1944 is not imposable. We, therefore, set aside the penalty imposed on the Appellants. 10. Respondent, as noticed hereinbefore, not only disclosed the ingredients of its products, but also disclosed the manufacturing process. On almost identical situation, as would appear from the discussions made hereinafter, such a product has been held to be an Ayurvedic product. The relevant entries are as under: "Heading No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in a product is less, does riot also ipso facto mean that the product is not a medicament. Generally the percentage or dosage of the medicament will be such as can be absorbed by the human body. The medicament would necessarily be covered by fillers/vehicles in order to make the product usable. It could not be denied that all the ingredients used in Banphool Oil are those which are set out in the Ayurveda textbooks. Of course the formula may not be as per the textbooks but a medicament can also be under a patented or proprietary formula. The main criterion for determining classification is normally the use it is put to by the customers who use it. The burden of proving that Banphool Oil is understood by the customers as a hair oil was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gpur [2006 (196) E.L.T. 3 (SC): (2006) 3 SCC 266], 'Puma Hair Tonic Powder' and 'Puma Anti-Dandruff Oil', 'Puma Shishu Rakshak Tel' were held to be medicinal products having regard to the medicinal property. Respondent, therefore, could contend that there product also is an Ayurvedic medicament. Tribunal, however, proceeded on the alternative submissions made on its behalf. No appeal has been filed against the order of the Tribunal refusing to classify the product of respondent as an Ayurvedic Medicament. 18. We are, therefore, only left with the contention that the product of Respondent is a 'perfumed hair oil'. Indisputably, perfume is added. Addition of perfume is a part of manufacturing process. It is one of the ingredients of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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