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2016 (4) TMI 600 - CESTAT KOLKATA

2016 (4) TMI 600 - CESTAT KOLKATA - 2016 (337) E.L.T. 80 (Tri. - Kolkata) - Classification - whether two products of Dabur Chyawanprash (Awaleha Special & Awaleha with Ashtawarg) should be classified as Ayurvedic medicaments under CETH 30.03, as claimed by the appellant, or the same should be classified under CETH 21.07/21.08 as decided by the Adjudicating authority - Held that:- An interpretation that Chyawanprash, also having health tonic capabilities will be classifiable only under chapter 21 .....

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ts are classifiable as Ayurvedic Medicaments under CETH 30.03. The confirmation of demands, imposition of penalties and confiscation of goods was thus not justified. It is made clear that this bench has not gone into the time barred aspect of the demands because on merits, the case has been decided in favour of the assessee. - Appeal No.EA-228/11 - Order No.FO/75213/2016 - Dated:- 29-2-2016 - DR. D.M. MISRA, MEMBER(JUDICIAL) AND SHRI H.K.THAKUR, MEMBER(TECHNICAL) For the Petitioner : Shri Lakshm .....

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rg and Chyawanprash Awaleha Special under Central Excise Tariff heading (CETH) 2107.91 or 2107.90 or 2108.90 or 2108.99 of the Schedule to Central Excise Tariff Act, 1985 (CETA 85) as per the CETH prevailing from time to time during the period of 15 show cause notices decided. Adjudicating authority has confirmed a total demand of ₹ 12,31,65,919/-, along with interest, and also imposed equivalent penalty under Rule 173Q(1) of the erstwhile Central Excise Rules, 1944. In addition 25 kg. o .....

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owed by the authoritative Texts. That these impugned products are correctly classifiable under CETH 30.03 as an Ayurvedic Medicine and not as food supplement/tonic under CETH 21.07/21.08 done by the Adjudicating authority because as per Chapter Note 1(a) of the Chapter 21 of CETA, 1985 products of Chapter 30 are not covered under Chapter 21. 2.1 That as per The Ayurvedic Formulary of India Part-I Chyawanprash is made up of 48 ingredients. That appellants product also contains the same ingredient .....

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gal Notice No.5. That based on the admissible substitutes in Chyawanprash Drug Control Authorities have granted them licence under The Drugs & Cosmetics Act, 1940 which is mentioned on the wrapper/label used on the medicament sold to the customers. That this Act also defines terms like Ayurvedic, Siddha & Unani Medicines and Patent or Proprietary Medicines. Learned Advocate made the Bench go through relevant licence No.AL-529-M granted on 13.10.1986, by Drugs Control Authority, West Beng .....

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t can be used to determine whether a particular product is prepared as per specific standard text books or not. That elsewhere in the country the same products manufactured by the appellant and others have been classified under CETH 30.03 and no appeal is filed by the Revenue against such orders. That this argument was taken before the Adjudicating authority as per para 2.3.8 of the Order-in-Original but no findings are given by Adjudicating authority on this aspect. That no penalty can be impos .....

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upreme Court) (iv) CCE, Calcutta vs. Sharma Chemical Works - [2003 (154) ELT 328(SC)] (v) Naturalle Health Products (P) Ltd. vs. CCE, Hyderabad- [2003 (158) ELT 257(SC)] (vi) Puma Ayurvedic Herbal (P) Ltd. vs. CCE, Nagpur- [2006 (196) ELT 3(SC)] (vii) CCE, Delhi vs. Ishaan Research Lab (P) Ltd.- [2008 (230) ELT 7(SC)] (viii)BCI No.33-GL-30-94 dt.20.04.1994 Issued by Bhubaneswar Commissionerate (ix) Extracts of Authoritative Texts - The Ayurvedic Formulary of India (First Edition), Dravyaguna Vij .....

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edicaments as Bhava Prakash is not specified in the first Schedule to the Drugs & Cosmetics Act, 1940 as held by the Adjudicating authority. (ii) That in common parlance the said two products are not known as Ayurvedic medicines but are known as complete food supplements or health tonics. That these two products have both prophylactic and non-prophalactic use. As the primary use of the products is food supplements or health tonic, therefore, the same have been correctly classified under CETH .....

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should not be guided by scientific authorities but by common/market parlance. (iv) That appellant could not produce validly extended Drug Control Authorities licence except for the period 01.01.1998 to 31.12.1989. (v) That appellant has established that Ayurvedic Book Bhava Prakash finds a mention in the list of Ayurvedic books under the first schedule to the Drugs & Cosmetics Act, 1940, but it is not established whether the substitute ingredients are in reality mentioned in the said Ayurved .....

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filed by either sides. The issue involved in the present proceeding is whether two products of Dabur Chyawanprash (Awaleha Special & Awaleha with Ashtawarg) should be classified as Ayurvedic medicaments under CETH 30.03, as claimed by the appellant, or the same should be classified under CETH 21.07/21.08 as decided by the Adjudicating authority. It is the case of the Revenue/Adjudicating authority that the products are primarily advertised and marketed as a food supplements/health tonic and .....

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atural and fresh ingredients, including amla, the richest source of Vitamin-C. It works on your immune system, your body s vital internal defence mechanism. Protecting you against everyday infections particularly coughs & colds, reducing stress related symptoms and adding to your general well-being. Because Dabur Chyawanprash is totally natural with no artificial flavouring, it is safe and completely free from side effects. It is especially good from growing children . 4.1 Though the above d .....

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old as a health recipe and that consumers normally use the said goods in common cough, cold and as complete supplements and health tonic. 4.2 Accordingly to the details given on the packs of the impugned product is made from 49 natural and fresh Ayurvedic ingredients out of which 99.602% is Awaleha or Amla or Amalaki, Dhatri. As per Ayurvedic Text Dravyaguna Vijnana Amla (Emblica Officinalis G.) fruits are useful as astringent, cardiac tonic, diuretic, laxative, liver tonic, general tonic, appro .....

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nown and domestically used commonly as edible, dietic and home remedy esteemed for its high medicinal potential with preventive, restorative and curative utility. It is an admitted fact that Amla is used alongwith all other Ayurvedic ingredients in making Chyawanprash as specified in the Authoritative Ayurvedic texts. All the ingredients used/contained in Chyawanprash, whether from Charak Samhita or Rosa Tarangini or Siddha Yoga Samgocha or Sharangadhara Samhita or Bhava Prakash etc. are declare .....

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es that though the product is also used for cough & cold but the same is primary used as a food supplement or health tonic in common parlance. Adjudicating authority has also held that substitutes used as per Bhava Prakash are not permissible in Ayurvedic Medicine. In this regard it is observed from legal Notice No.5 of the Ayurvedic Formulary of India (First Edition); published by Govt. of India, Ministry of Health and Family Planning, Department of Health; that use of substitute drugs (pra .....

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e is available the products should be classified as food supplements/tonic is beyond reasoning. If a product is considered as an ayurvedic drug then it remains an ayurvedic drug for all periods when the ingredients used are the same. Revenue s apprehension that for some period of manufacture the products manufactured may contain different constituents, is misplaced as appellant has claimed the same Ayurvedic ingredients used and no action by the concerned Drug Control authority has been taken fo .....

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quiries do not exclusively say that the products are only used as health tonic or food supplement. On the other hand appellant has made available the opinion of experts to indicate that products are used as Ayurvedic medicaments. It is observed from the wrappers used on the impugned products that the same is claimed to have been prepared strictly according to centuries old Ayurvedic recipe from 49 ayurvedic ingredients which is protecting humans against coughs, colds etc. and also adding to the .....

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d a tonic, will be classified as a product of chapter 21 or chapter 30.03 of the CETA, 1985. As per chapter note 1(a) of Chapter 21 of the CETA, 85 products of Chapter 30 are excluded from Chapter 21. 4.4 Further as per Chapter note 2(i)(a) of Chapter 30 of the CETA, 1985, a medicament means a product comprising of two or more constituents which have been mixed or compounded together for therapeutic or prophylectic uses. The Ayurvedic ingredients used by the appellant in the manufacture of Dabur .....

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lso read the opinion of the majority Bench and the minority opinion of the Technical Member. It is a settled law that the onus or burden to show that a product fall within a particular Tariff Item is always on the revenue. 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.Lakshmikumaran that merely because the percentage of medicament .....

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nder a patented or proprietary formula. The main criteria 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 an hair oil was on the revenue. This burden is not discharged as no such proof is adduced. On the contrary we find that the oil can be used for treatment of headache, eye problem, night blindness, reeling, head weak memory, hysteria, amnesia, blood pressure, insomnia etc. Th .....

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the department was still entertaining any doubts, they could have referred the matter to the Adviser, Ayurveda/Sub-Commissioner in the Office of Drug Controller, Director General of Health Services, New Delhi. This was not done. 4.5 In the above case the product Banphool Oil was consisting of 98% Till oil and 2% Ayurvedic ingredients like Amla, Chandan, Camphor etc. and Revenue was of the opinion that the product was classifiable under CETH 30.03. In this case law it is observed by the Hon ble .....

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t has not claimed the classification as exempted category of Ayurvedic medicament under CETH 3003.31 but has claimed the same as patent or proprietary medicament under CETH 3003.39 on payment of appropriate duty as per the representative copy of classification list provided by the learned Spl.Counsel of the revenue. 4.6. It has also been taken up by the appellant in the arguments and grounds of appeal that classifying their products under CETH 21.07/21.08 will be discriminating as similar Chyawa .....

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ity to counter the claim of the appellant. It is also relevant to mention that Chyawanprash in the case of Baidyanath Ayurved Bhavan Pvt.Ltd. vs. CCE, Kolkata (supra) was also manufactured at Patna, Jhansi, Nagpur, Naini as Ayurvedic Medicament. From this case law also it is observed that Chyawanprash Special was being made under Drug Control Authority Licence as is the case with the present appellant. The dispute was only under CETH 3003.31 claimed by that appellant and CETH 3003.39 claimed as .....

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