TMI Blog2007 (7) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... not as ayurvedic medicines as claimed by the assessees, but as cosmetics. The assessees challenged such stand by filing Special Civil Suit No. 143/78 before the Civil Judge, Senior Division, Thane and the suit was de creed on 6-5-1982 in favour of the assessees by holding that both products were ayurvedic medicinal preparations and not toothpaste or toothpowder or cosmetics falling under erstwhile Central Excise Tariff Entries 14F arid 14FF. This decision was challenged by the Revenue by filing appeal No. 613/82 before the Hon'ble Bombay High Court which by its judgment dated 27-4-1988 [2000 (123) E.L.T. 431 (Bom.)] upheld the finding that the products cannot be classified as cosmetics. However, the Court held that there were no pleading that the products in question were exclusively ayurvedic medicines. Both the Revenue as well as the assessees filed Special Leave Petitions before the Apex Court; SLP No. 1918/1989 filed by the Revenue was dismissed by the Hon'ble Supreme Court vide order dated 7-9-1990 [2001 (127) E.L.T. A105 (S.C.)] and as regards SLP No. 14082/88 filed by the assessees, the Revenue authorities consented that the products were rightly classified by the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dency of the above proceedings, the Goa Commissionerate issued 11 show cause notices to the appellants, during the period ranging from June, 1997 to May, 2005, proposing classification of the eight products of the assessee as described in the opening paragraph of this order as cosmetics under Chapter 33 of the Schedule to the CETA, 1985; the appellants replied to the show cause notices which were taken up for hearing after the Supreme Court's dismissal of appeals filed by the department against Tribunal's order dated 3-2-2003 and the notices were adjudicated by order dated 30-1-2006 of the Commissioner of Central Excise, Goa, who classified the products as under : Product Chapter Heading prior to the amendment of the CETA, 1985 (up to 28-2- 2005) Chapter Heading after the amendment of the CETA, 1985 (from 1-3-2005 ) Vicco Vajradanti Paste 3306.10 3306 10 20 Vicco Vajradanti Powder 3306.10 3306 10 10 Vicco Vajradanti SF Paste 3306.10 3306 10 20 Vicco Turmeric Skin Cream 3304.00 3304 99 50 Vicco Turmeric S Skin Cream (Foam base) 3304.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessees themselves, packing materials etc., all of which issues have been dealt with by the Civil Judge, Thane, Bombay High Court as well as the Tribunal and, therefore, it is not open to the Commissioner, Goa, to re-agitate and re-open the same issue. They rely upon various affidavits of consumers, ayurvedic experts, wholesalers, dealers, retailers, chemists as well as relevant extracts from ayurvedic text-books and certificates issued by the authorities under the Drugs and Cosmetics Act as well as by the Joint Commissioner, which material has not been controverted by the Revenue, and submit that the show cause notice does not disclose any material to substantiate the case of the department that the products in dispute are not ayurvedic medicines. As regards the stand of the department that Note 2 to Chapters 30 and 33 has not been considered for the purpose of classification, the assessees submit that Note 1(d) to Chapter 30 only states that preparations of Chapter 33 shall not be covered by Chapter 30 even if they contain therapeutic or prophylactic properties and, therefore, in order to be beyond the purview of Chapter 30, the products must first be cosmetics and if su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were foreclosed for reconsideration under the new tariff. Shri Mondal submits that the Tribunal's order dated 3-2-2003 only confirms the order dated 10-1-2002 of the Commissioner (Appeals) relying upon the opinion dated 13-11-1997 given by the Ministry of Law and Justice to the effect that the Revenue had no recourse except to follow the judgment dated 27-4-1988 of the Bombay High Court, which was accepted by the Revenue before the Apex Court. As per the order dated 7-12-2004 of the Apex Court which, while noting that mere decision of a court of law without anything more, cannot be justification enough for changing classification without change in the nature of a product or a change in the use of the product or a fresh interpretation of the tariff heading by such decision, gave liberty to the Revenue to undertake such tests in respect of the products for the purpose of classification under the appropriate tariff headings. The Commissioner has analysed the application of trade parlance tests as well as the relevance of Chapter Notes 2 and 5 of Chapter 33 and Chapter Note 1(d) to Chapter 30 of the Schedule to the CETA, 1985 in paragraphs 19.9 to 19.13 of the order and admitted the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 33 coupled with the opinion of the Advisor (Ayurvedic and Siddha) in the Directorate General of Health Services, including the decision of the Hon'ble Bombay High Court in the context of the erstwhile Central Excise Tariff, the Board was fortified in its decision to treat the goods as ayurvedic medicines. There is no dispute that there has been no change in the products and that the therapeutic contents thereof remain the same and the only difference is that Vicco Turmeric is available in different bases like oil, foam and cream. The show cause notices issued by the Goa Commissionerate are based only on advertisements of the assessees themselves, and the packing materials therefor, and all these issues have been dealt with by the Civil Judge, Thane, the Hon'ble Bombay High Court in its order dated 27-4-1988 and the Tribunal in its order dated 3-2-2003. The assessees have also placed on record affidavits of consumers, ayurvedic experts, wholesalers, dealers, retailers and chemists to emphasize the point that the commercial/trade understanding of the products is that they are medicaments. The relevant extract from the affidavit of one Dr. V.S. Upasani who has his hospital and dispe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make it a powder. The said 18 in gredients have Ayurvedic therapeutic properties. The said properties are anti-inflammatory and haemostatic. They have gum hardening and pain on relieving properties. They have also antiseptic and antiplaque properties. They ingredients chalk and gum of tragacant have therapeutic value according to Ayurved, and I regard a product made from aforesaid ingredients and Sorbitol as exclusively Ayurvedic medicine. 3. Turmeric and Sandalwood oil have therapeutic properties in Ayurveda. In Ayurveda, Turmeric is recommended for a number of skin diseases like Urticaria, inflammation and boils. According to Ayurveda Sandalwood oil has soothing property and it also relieves itching. I would regard a product made out of an extract of Turmeric and Sandalwood oil with base of Vanishing Cream as an exclusively Ayurvedic medicines. Vanishing Cream is prepared out of mixture of Alkalied and Acids. The Alkalies and Acids have been referred to in Ayurveda as Kshar and Amla and the mixture of these two make Vanishing Cream. Such a base is a recognised in Ayurveda. Vicco Turmeric Cream is made from an extract of turmeric and sandalwood oil which is made compatible in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parations." 13. Shri Dhirajlal Damji Shah, proprietor of Matunga General Stores, Chemists Druggists, has averred in his affidavit that he has been selling ayurvedic medicines such as Chhavan Prash, Vicco Vajradanti paste and powder as exclusively ayurvedic products for the past 10 years, that Vicco Vajradanti paste and powder are used for diseases of teeth and gurus as medicines, that these two products are sold on doctor's prescription and also without prescription and that he regards both the products of Vicco as exclusively ayurvedic medicines and not as toothpaste and tooth powder. Affidavits of customers have also been filed to the effect that they were advised by the dentist to use Vicco Vajradanti powder and paste and that they understood the two items as exclusively ayurvedic medicines and not as toothpaste or tooth powder. 14. Dr. Shyam H. Rane of Andheri (East), Mumbai, has averred that a medical representative from Vicco Laboratories came to him and showed him four products, namely Vicco Turmeric skin cream in oil base, Vicco Turmeric-WSO skin cream, Vicco Turmeric-S cream (with foam base) and Vicco Turmeric cream (with foam base) together with literature of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cure inflammation and blemishes, to nourish the skin and for cooling effect. I also tried Vicco Turmeric-S Cream (with foam base) in cases of infants for inflammation of skin around the anus due to diarrhea and I have found that after use of Vicco Turmeric-S Cream (with foam base), the inflammation subsided and the child stopped crying. In my opinion, this is because of the ingredients - Sandalwood Oil in Vicco Turmeric-S Cream (with foam base). Turmeric and Sandalwood Oil have got antiseptic and cooling properties. I regard Vicco Turmeric-S Cream (with foam base) as an exclusively Ayurvedic Cream. According to me, the Vicco Turmeric-S Cream (with foam base) is an Ayurvedic medicine because its therapeutic ingredients are Ayurvedic and it is manufactured under an Ayurvedic Licence. I consider the Vicco Turmeric-S Cream (with foam base) as an Ayurvedic Medicine because of its antiseptic and cooling properties of both Turmeric and Sandal wood Oil respectively. It is used widely for dermatological conditions like cuts, nicks, allergic rashes, burns and piles. I regard Vicco Turmeric-S Cream (with foam base) as an exclusively Ayurvedic medicine and not a cosmetic or toilet article. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 16. As against the plethora of evidence brought on record by the assessees to substantiate their stand that the products in dispute are ayurvedic medicines falling for classification under Chapter Heading 30.03, the department has not adduced any material to support its stand that the disputed products are cosmetics under Chapter 33 of the Schedule to the CETA, 1985 and therefore has not discharged the burden cast upon it to determine the correct classification. 17. The department has relied upon advertisements and packing material relating only to products which are exported to foreign countries where the ayurvedic system of medicine is not recognised. It is also relevant to note that the show cause notice issued by the Nagpur Commissionerate to the assessee was challenged before the Nagpur Bench of the Bombay High Court in Writ Petition No. 2913/05. In paragraph 15 of the judgment, the Court has clearly held that advertisements, packing material etc. cannot be taken into consideration for determining the real nature and character of the product. The Revenue has also relied upon the fact that the products in dispute are known in the industry as FMCG products and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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