TMI Blog2021 (1) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed as a medicine by medical practitioner as a drug. There is no restriction on sales. The product is sold on demand at the counters in shops and establishments. Sales are not restricted to chemists/druggists alone. A perusal of the classification heading no. 38089191 shows that the product in question is a neat fit into the description of products laid down therein. No laboured process of reasoning is required since the heading No. 38089191, is clear as day light - invocation of the general entry called others by the applicant is clearly misconceived, since the product in question is covered by a specific description in the heading under which the product has been classified. Undoubtedly, the description under Heading No. 3808 91 91, i.e., Repellents for insects such as flies, mosquito is far more specific as compared to the description under the other heading under consideration, i.e., Heading No. 3004 90 99 which is Other (meaning medicaments other than all those explicitly specified in the other sub-headings of Heading No. 3004). Evidently, the latter heading is a residual classification while the former is specific and conforms to the description of the goods ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mosquito Repellent, they have also found HSN 38089191. 4. Now, they are not in a position to classify the same under which of the heading same may be classified and, therefore, they have filed this Advance Ruling application to avoid the future litigations and long appeal procedures. Grounds of Application: 5. They are going to start the manufacturing of the above product and as earlier stated that they are classifying the same under the tariff heading 3004 as they are considering it as a Ayurvedic product and classifiable under the tariff sub heading 3004. 6. As they all know that main aim of GST is One Nation, One Tax and One Market and which will create the healthy competition in the market and every seller is selling the same product at same price so that the consumer will get benefit of the same. 7. Manufacturing Industry is very well established in India, more so in case of Mosquito Repellent and specifically in Gujarat, and considering the aim of GST any difficulty in operating the business should be nullified as early as possible and therefore filling this application 8. They have narrated some of the facts of the Product AAYUDH-MOSX (i.e. Aayurvedic M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3004 reproduced hereunder: 30.04 MEDICAMENTS (EXCLUDING GOODS OF HEADING 30.02, 30.05 OR 30.06): CONSISTING OF TWO OR MORE CONSTITUENTS WHICH HAVE BEEN MIXED TOGETHER FOR THERSPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES (INCLUDING THOSE IN THE FORM OTTHOSE IN THE FORM OF TRANSDERMSL ADMINISTRATION SYSTEMS) OR IN FORMS OR PACKAGING FOR RETAIL SALE. 3004.90- Other ----of Ayurvedic, Unani, Homeopathic, Siddha or Bio-chemic systems Medicaments-put up for Retail Sale; 30049011- of Ayurvedic System. The heading also excludes: (a)---------------- (b)---------------- (c) --------------- (d)--------------- (e) Insecticides, disinfectants, etc., of heading 38.08, not put for internal or external use as medicines. The heading includes: Mixed medicinal preparations such as those listed in an official pharmacopoeia, proprietary medicines, etc., including those in the form of gargles, eye drops, ointments, liniments, injections counter- irritant and other preparation not falling in heading 30.02, 30.05 or 30.06 10. Product AAYUDH-MOSX is a medicinal preparation and ingredients is also mentioned in the book BHAVA PRAKA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udied Herbal Nano Particles manufactured by applicant and it has been concluded that Herbal Nano Particles manufactured by Applicant based computational docking and simulation studies against mosquito protein shows it can work as Repellent and Larvicide both. (Research study also submitted by them, as Annexure-F). 14. Relevant Portion of Chapter 38.08: 38.08 INSECTICIDES, RODENTICIDES, FUNGICIDES, HERBICIDES, ANTI - SPROUTING PRODUCTS AND PLANT-GROWTH REGULATORS, DISINFECTANTS AND SIMILAR PRODUCTS, PUT UP IN FORMS OR PACKINGS FOR RETAIL SALE OR AS PREPARATIONS OR ARTICLES (FOR EXAMPLE, SULPHUR-TREATED BANDS, WICKS AND CANDLES, AND FLY-PAPERS) (+). 15. They have also referred Chapter heading 3808 91 91 Repellents for insects such as files, Mosquito which is being manufactured from various chemicals, whereas products manufactured by applicant is not being manufactured from any chemicals. The product does not kill the flies or mosquito, it just prevents. Hence, it cannot be considered as insecticide or pesticide and foes not cover under insecticides Act, 1940. The products manufactured by them are as per the ingredients prescribed in BHAVA PRAKASHAN authoritative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------. 18. By going through both the Chapters Viz. 3004 and 3808 it is to state that product if having the medicinal properties and having the therapeutic or prophylactic uses, the same may be classifiable under heading 3004. Furthermore, by going through chapter 3004, it has been given that heading covers medicinal preparations for use in internal or external treatment or prevention of human or animal ailments. Product AAYUDH-MOSX is used for the external treatment for prevention of the body from being infected by the bite of the mosquitos. 19. Further, they have taken the report of the laboratory named Accuprec Research Labs Pvt. Ltd., approved by the Food amp; Drug Administration, Gujarat State, Gandhinagar having Licence No. GTL/37/31 and they have certified that the test material AAYUDH-MOSX supplied by the applicant was tested for the Mosquito repellent activity and it can be concluded that AAYUDH-MOSX when applied at dose of 3.25 and 6.5 gm (on Forearm) possess 100% repellency. (Report Attached herewith as Annexure G). 19.1 Test carried out by the above laboratory named as Comparative mosquito repellent efficiency of AAAYUDH-MOSX and Standard Mosquito repe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classifiable under heading 3004. 21. Further, by going through the heading and chapter notes 1 (d) of chapter Heading 38.08, it clearly mentioned that heading covers range of products other than those having character of medicaments, deluding veterinary medicaments of heading 30.03 or 30.04. 22. Product AAYUDH-MOSX is having the Character of medicaments and, therefore, they are of the considered opinion that the same is classifiable under heading 30.04. 23. In view of the above, they want to rely on some of the Case Laws in which the product is prepared from Ayurvedic ingredients and having therapeutic or Prophylactic Quality, same is classifiable under Chapter 30, which are as under: (i) Global Tele Mall Vs Union of India reported at 2018 (18) G.S.T.L. 227 (M.P.), it has been held that product prepared from Ayurvedic Ingredients and having therapeutic quality classifiable as Ayurvedic Medicine under Chapter 30 (Attached as Annexure H). (ii) Commissioner of Central Excise Pondicherry Vs Vale Exports (P) Ltd. reported at 2018 (359) E.L.T. 211 (Tri. Chennai) in the said order at Para No.7 reference has been given of the Apex Court decision in case of Ciens La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to submit the same. In this regard, the applicant stated that Shree Baidyanath case has been finally decided by the Supreme Court reported at 2009 (237) E.L.T. 225 (S.C.) and same has been distinguished vide decision in the case of Commissioner of Central Excise V. Wockardt Life Science Ltd., reported at 2012 (277) E.L.T. 299 (S.C.), while deciding the issue Supreme Court had held as under: HELD : Purpose of use was primarily prophylactic and to prevent infection or disease - In that view, it was classifiable as medicament under Heading 3003 of Central Excise Tariff, a specific entry and not under sub-heading 3402.90 thereof, a residuary entry - Note 2(i) of Chapter 30 ibid made it clear that products, comprising two or more constituents which have been compounded together either for therapeutic or prophylactic uses, would fall within meaning of expression Medicament - Revenue plea that since impugned product was primarily used as detergents/cleansing preparation, they cannot be brought under definition of medicaments, rejected. [paras 15, 29, 34] Classification of goods - Determination of - Factors to be considered are product composition, its literature, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other mosquito repellents available in the market, AAYUDH-MOSX is made from all-natural plant extracts and does not contain DEET (N, N-Diethyl-meta-toluamide); (ii) the said product is manufactured from natural extracts, viz. Coconut extracts, Sugar Cane extracts, Corn extracts, Lemongrass oil, Citronella oil, EDTA Water, which is also certified by the Food and Drug Control Department, Gandhinagar; (iii) the manufacturing process of said product is as below: The Corn, Sugarcane and Coconut Extracts are blended in a sequence at varied temperatures and pressures to ensure an even mix. Palm Fatty Oils help blending. EDTA could be added as a Chelating agent. Essential oils, namely lemon grass oil and citronella oil, may then be added as per need of application for added affectivity to the mix. Water is added to ensure good solubility and evenness along with Sugarcane and the Coconut processed extracts. The process is finally ended with a process for binding these molecules into colloids and converting them into Nano particles of 2-50 nano meters for far greater affectivity. (iv) This would form a totally natural, non-toxic, biodegradable and a non-carcinogenic, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Baidyanath Ayurved Bhavan Limited, reported at (2009) 12 SCC 419 held thus: 55. True it is that Section 3(a) of the Drugs and Cosmetics Act, 1940 defines Ayurvedic, siddha or unani drug but that definition is not necessary to be imported in the new Tariff Act. The definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute. As stated above, the object of the Excise Act is to raise revenue for which various products are differently classified in the new Tariff Act. 34. By drawing inference from above, we find that the definition of the Drugs and Cosmetics Act, 1940 having different object, purpose and scheme cannot be applied mechanically to GST law. The object of the GST Act is to raise revenue for which various products are differently classified in the Customs Tariff Act, as also applicable to GST. 35. We find that the applicant pitched the product in their sale material and advertisements as a mosquito repellent. Various mosquito repelling qualities are identified as defining characteristics of the subject goods in the market. 36. We further note that the said product is not normally prescribed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3808 Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products 3808 91 91 Repellents for insects such as flies and- mosquitoes 42. The tariff heading, being favoured by the applicant is reproduced hereunder: Tariff Item Description of goods 3004 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale 3004 90 99 Other 43. The General Rules for Interpretation of Import Tariff which guided us in determination of the classification of the goods, will also aid this discussion. The relevant rules are set out hereunder for ease of reference:- 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48. The preceding discussion establishes that all attributes of mosquito repellents relevant for a judicial enquiry of this nature are found in the product in question. 49. The reliance placed by the applicant on the judgment of the High Court rendered in the case of Commissioner of Sales Tax Vs. M/s S.S. Balsara Hygiene Products Limited, reported at 1986 UPTC 367 (All.), wherein Odomos has been held as a medicine, is misplaced. The entry which was under consideration before said Court in M/s Balsara Hygiene Product Limited (supra) issued under Section 3 of the Uttar Pradesh Sales Tax, 1948 and reads as Medicines and pharmaceutical preparations including insecticides and pesticides. The said entry included insecticides and pesticides within the broader category of medicines and pharmaceutical preparations. This is incomplete contradistinction to the entry under the tariff heading no. 3808 which is in issue in this application. The rival classifications of medicament vs mosquito repellent were not examined by said Court in the case of M/s Balsara Hygiene Products Limited (supra) while the same are directly in issue in the instant application before us. 49.1 In this regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thus, this again indicates that Heading No. 3808 91 91 is most specific for the classification of the subject product. 55.1 We have also perused the case laws cited by the applicant. In the case of M/s Global Tele Mall Vs Union of India, reported at 2018 (18) G.S.T.L. 227 (M.P.), the dispute before High Court of MP was related to categorization of the goods, viz. Kashyog Oil and Keshyog Herbal Powder Hair Wash/Shampoo either as Ayurvedic medicine or cosmetic/toilet preparation and whether or not the processes undertaken by the vendor will amount to manufacture. Hence, ratio of this case is not applicable to the case before us being facts are distinguishable. 55.2 In the case of Commissioner of Central Excise Pondicherry Vs Vale Exports (P) Ltd. reported at 2018 (359) E.L.T. 211 (Tri. Chennai), the dispute, before the CESTAT, Chennai was related to classification of Fair Plus Herbal Face Cream and Fair Plus Face Lotion during Central Excise Regime. Hence, the ratio of subject case will also not be applicable to the facts of the case before us. 55.3 Further, they have also relied upon the decision of State of UP v. Malik Zarid Khalid (AIR 1988 SC 132) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
