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TMI Blog2021 (1) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... mals and manufactured exclusively in accordance with the formulae described in authoritative books of ayurvedic/ siddha and Unani Tibb system of medicine, specified in the First Schedule. 3. On going through the HSN specified for the Mosquito Repellent, they have found 30049011 for Ayurvedic Medicaments. However, for 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-50 nano meters for far greater affectivity. This would form a totally natural, non-toxic, biodegradable and a noncarcinogenic, food grade and Ayurved certified (certification attached) mosquito repellent, AAYUDH-MOSX. 9. Relevant Portion of Chapter 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, lini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as mosquito repellent apart from using chemical based repellents. 13. Applicant has also got tested the said product with Saurashtra University, Central of Excellence, Government of Gujarat and they have studied 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssential character of medicaments, including veterinary medicaments (heading 30.03 or 30.04). (d) --------------." 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 labora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingredients and having Therapeutic or Prophylactic uses and, therefore, the same is 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 refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. A260 (S.C.) and it has been asked 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 compos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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, food grade and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 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 a medicine by medical practitioner as a drug. There is no restrictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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, it is pertinent to mention that recently, in the case of M/s Dabur India Ltd., the Hon'ble High Court of Allahabad, vide its Order dated 17.01.2020 upholds the order of Appellate Authority for Advance Ruling of Uttar Pradesh, holding "Odomos" to be a 'mosquito repellent' classifiable under HSN 38089191 of Chapter 38 of Customs Tariff Act, 1975 (CTA) and not as a 'medicament' under Heading No. 3004. 50. We find that undo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c 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) which has been referred in case of Shree Baidyanath Ayurved Vhavan Ltd. V. Commissioner-2003 (157) E.L.T. A260 (S.C.). 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.). In the case of Wockardt Life Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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