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M/s. Dabur India Ltd. Versus Commissioner of Central Excise, Kolkata-VII

2016 (4) TMI 600 - CESTAT 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 of CETH, will be an absurd interpretation when the same product manufacture .....

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ion 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 Lakshmi Kumaran, Advocate & Shri Ravi Raghavan, Advocate For the Respondent : .....

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ETH) 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. of the impugned goods, valued at ₹ 1826.88 were also confiscated and al .....

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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 ingredients but sometimes all the ingredients listed in the original Ayurvedic texts a .....

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ug 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 Bengal with the list of ingredients used in Chyawanprash Awaleha and Chyawanpras .....

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pecific 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 imposed upon the appellant as they are of the firm belief that goods manufactured .....

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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 Vijnava & Agnivesa s Caraka Samhita 3. Shri S.C. Jana (Special Counsel) app .....

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ugs & 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 21.07/20.08 by the Adjudicating authority. (iii) That the wrappers/literatu .....

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. (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 Ayurvedic book as ingredients for the manufacture of Chyawanprash Awaleha and Chyaw .....

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er 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 also that the Drug Control Authorities licence is not valid for the certain .....

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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 details given on the product does not say that the impugned products are food .....

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mon 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, approdisiac, hair tonic, narveine brain tonic, anti-inflammatory and digestive me .....

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ed 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 declared to the Drug Control Authorities, West Bengal, who renewed appellant s lice .....

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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 (pratividhis dravyas) wherever the original drugs are not available; is permissi .....

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s 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 for violation of the norms under Drugs & Cosmetics Act, 1944. However, app .....

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ic 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 general well being. It is observed from the case records that the main ingre .....

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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 Chyawanprash has therapeutic and prophylactic use as claimed on the wrapper .....

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echnical 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 in a product is less, does not ipso facto mean that the product is not a med .....

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assification 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. The dosages required are also set out on the label. The product is registered .....

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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 Apex Court that the ingredients of Banphool Oil are those which are set out .....

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ament 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 Chyawanprash manufactured by Sri Baidyanath Ayurved Bhavan, Mayer India Ltd. etc. .....

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at 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 proprietary drug by the Revenue. In the present case appellant is paying dut .....

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