TMI Blog2018 (3) TMI 1487X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 22-3-2018 - Hon'ble Shri P.K. Jaiswal And Hon'ble Shri Virender Singh, JJ. Shri A.K. Sethi, learned Senior Advocate, with Shri Alok Bharatwal, Advocate for the appellant Shri Prasana Prasad, learned counsel for the respondent ORDER Per P.K. Jaiswal, J. Since a common question of law is involved in these appeals, therefore, they are heard together and are being disposed of by this common order. For the sake of convenience the facts are borrowed from CEA No.102/2017. 2. The appellants / assessee M/s.Global Tele Mall and M/s. GTM Tele-shopping Pvt. Ltd, were engaged in selling goods called Kashyog Oil and Keshyog Herbal Powder Hair Wash/Shampoo . During the period January 2006 to March 2007, the goods were manufactured by vendor M/s. Gurukripa Consumer Care Products, Indore. The dispute in the present set of appeals relates to categorization of these impugned goods either as Ayurvedic medicine or cosmetic / toilet preparation and whether or not the processes undertaken by GTM will amount to manufacture. 3. On information by certain intelligence, that M/s. GTM is manufacturing Keshyog Ayurvedic/Herbal Hair Oil and Keshyog Ayurvedic Sham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingredients in support of their claim. The adjudicating authority in the impugned order in para 78 of the order held that it is also a fact here that the classification of the product is not a matter of contention in the impugned Show Cause Notice and the Show Cause Notice has nowhere challenged the classification of the goods. The matter seems to have been unnecessarily raked up by the applicant M/s. GTM. We find that the adjudicating authority had not given any finding in respect of the claim in reply to Show Cause Notice. 8. In view of the above facts as the claim of the applicant that the goods in question are ayurvedic medicine is not gone into the adjudicating authority in the impugned order. While admission of any fact by any of the concerned parties may be relevant, admission of legal position, like classification of goods, especially during investigation stage, will not be sufficient to establish such legal provision. The adjudicating authority has to examine the relevant facts and law and come to his own finding. Therefore, we find the matter needs reconsideration by the adjudicating authority afresh. The impugned order is set aside in respect of the present appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making them marketable in combi-pack as Keshyog Herbal Hair Treatment , amounts to manufacture in terms of Note 5 of Chapter 33. The Original Authority confirmed Central Excise duty of ₹ 1,36,72,354/- from M/s. GTP Teleshopping Pvt. Ltd / M/s. Global Tele Mall. Equal amount of penalty was also imposed on these appellants; ₹ 17,83,745/- was confirmed as duty from M/s. Gurukripa Consumer Care Products; equal amount of penalty was also imposed on them; penalties were imposed on Shri Anuj Agarwal, Director, Shri Gurucharan Patidar and Shri Pranayadutta Shukla, Proprietor under Rule 26 of Central Excise Rules, 2002. 10. The learned Tribunal relying on the decision of B.P.L. Pharmaceuticals Ltd. V/s. Collector of Central Excise, Vadodara, 1995 (77) E.L.T. 485 (S.C.) , Himtaj Ayurvedic Udyog Kendra V/s. Commissioner of Central Excise Allahabad, 2002 (139) E.L.T. 610 and Commissioner of Central Excise V/s. Sharma Chemical Works, 2003 (154) ELT 328 (S.C.) , came to the conclusion that the products in question are rightly questionable under Chapter 30 as Ayurvedic medical preparation. Para 10 of the order impugned reads as under :- 10. Having considered the nature of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at labelling of the products, packing from bulk cartons to combo boxes (with one oil and one shampoo container) and making them ready for retail market is carried out by M/s GTM/Global, in their premises. The cartons with 200 bottles received by M/s GTM/Global are meant for inter-unit transfer in bulk and not for retail consumer. Such bulk consignments are made into retail packs (combo packs with bottle of oil and powder) in a single retail carton box. This cartoon box is fit for retail sale under taken by GTM/Global. Applying the provisions of Note 6 of Chapter 30, we find that the processes undertaken by the appellant will amount to manufacture attracting Central Excise levy. The case laws referred to by the appellants are not on the facts, as described above. The nature of activities undertaken by the appellants being not in dispute, we find that the findings of the lower authority regarding the question of manufacture is correct, though the Original Authority discussed Note 5 of Chapter 33, the wordings are similar in Note 6 of Chapter 30. The emphasis made by the appellant on the word and before repacking from bulk packs to retail packs in the note is of no relevance or he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no definition of Ayurvedic medicaments in the Central Excise and Salt Act or in the Central Excise Tariff. Although Ayurvedic medicines have been defined under Section 3(a) of the Drugs and Cosmetics Act, the same cannot be applied for the purpose of classification of a product for Central Excise duty under the Central Excise and Salt Act in view of several judicial pronouncements. The arguments put forward by the Revenue that one should go by the definition of Section 3(a) of the Drugs and Cosmetics Act to find out whether the product is an ayurvedic medicine was not accepted by the Tribunal. Admittedly the products concerned were not manufactured in accordance with the formulae in a text book and therefore, it was contended that it will not come under 3003.30. The Tribunal took the view that the products should be classified under Central Excise Tariff Heading 3003.30 if it is found that in the common parlance it is known as Ayurvedic medicine and all ingredients are mentioned in the authoritative books on Ayurvedic medicines. It is not necessary that the product was manufactured in accordance with the formulae in the text book. To examine these aspects the matter was remanded. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng attractiveness or altering appearance. On the other hand, it was intended to cure certain diseases. The labels notified that it is a medical treatment for dandruff. It should be used twice weekly initially and then as often as necessary or as directed by the physician. Certain directions were also given to its use. The hair had to be washed first and then the selsun should be massaged into the scalp and left for 2 or 3 minutes and thereafter rinsed thoroughly. The court held that the fact the appellant had previously described the product as 'Selsun shampoo' will not conclude the controversy when the true nature of the product calls for examination. Reference was made to Note 2 under Chapter 33 and it was held that once therapeutic quality of the ingredient used, is accepted, thereafter it is not possible to hold that the constituent is subsidiary. The important factor is that selenium sulfide is the only active ingredient. The Tribunal's finding that since the Heading 33.05 refers to preparation for use on the hair, and therefore, the product can be brought under the above heading was not accepted by the Supreme Court. It was held that the Tribunal forgot that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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