TMI Blog2004 (5) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... to the manner in which the goods had been treated on the earlier occasions by the department and the product having been utilised with reference to the commercial parlance and understanding, that it had been treated as a drug it would not cease to be one notwithstanding the fact that new tariff act has come into force. What is to be seen in such cases is when in the common parlance, for purpose of the Drug Act, for purpose of Sales Tax Act and in various findings recorded on earlier occasions by the department itself having been noticed, the conclusion is inevitable that the products in question must be treated as medicinal preparations. No hesitation in reversing the view of the Tribunal and restore that of the Collector that in view of the medicinal ingredients, namely, salicylic acid and boric acid which are meant to cure the disease called Milaria Rubra, prickly heat powder is a drug and, therefore, classifiable as a drug or a medicinal preparation. Appeal allowed of assessee. - 779-783 of 1997 - - - Dated:- 5-5-2004 - S. Rajendra Babu, C.J.I. and G.P. Mathur, J. [Judgment per : <?xml:namespace prefix = st2 /> S. Rajendra Babu, C.J.I.]. - In these appeals a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Narcotic Drugs" and "Narcotics" have the meanings respectively assigned to them in section 2 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Explanation II. - This Item includes cosmetics and toilet preparations whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value. Explanation III. - this Item includes, unmixed products, only when they are in packing of a kind sold to the consumer and put up with labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialised to such value." "33.04 : Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen and suntan preparations; manicure or pedicure preparations." 4.The case put forth before us on behalf of the appellants is that prickly heat powder contains a range of medicines and are used only for the treatment and prevention of a skin ailment known as Milaria Rubra commonly known as prickly heat; that prickly heat powders are manufactured under a Drug Licence issued under the Drug and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.T. 485 (S.C.) = 1995 Supp. (3) SCC 1], and the decision of the Andhra Pradesh High Court in State of A.P. v. Koduri Satyanarayana Co., 1988 STC 233 (A.P.) wherein it was held that Sales Tax Tribunal was right in considering Johnson's prickly heat powder as falling under Entry 37 (drugs) and not under Entry 36 (cosmetics). It is further contended that the price of the product was fixed under the Drug Price Control Order, 1970 as it had been manufactured under a Drug Licence issued under the Drugs Act; that under the Drug Act there are two regimes, namely, one for drugs and the other for cosmetics; that before a drug licence is issued various conditions as required by Rule 17 of the Drugs and Cosmetics Rules, 1945 have to be complied with; that the product is known and understood in commercial parlance as a patent or proprietary medicine used for the prevention and treatment of the disease, prickly heat; that the Head of the Pharmacology Department of the Grant Medical College, Mumbai has also opined that Johnson's prickly heat powder contains active ingredients like salicylic acid and boric acid and it is of medicinal value and can be used in the treatment of skin disorders. Var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it is stated that Nycil should be considered as a medicament falling under Heading 30.04. 6.What is required to be considered in the matters of this nature where commodity taxation is taken up by the State authorities the court should be guided by the manner of classification of the goods which are brought to tax rather than the etymological meaning of the product in question or expert's opinion thereto. 7.The Tribunal in the present cases has heavily relied on Explanation II to Tariff Item No. 14F of the Tariff Act which reads as "this item includes cosmetics and toilet preparations whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value". This Court in BPL Pharmaceuticals Ltd., held that selenium sulfide product not intended for cleansing, beautifying, promoting attractiveness or altering appearance and having regard to preparation, label, literature, character, common and commercial parlance understanding and earlier decisions of the Central Board of Excise and Customs held the product was a drug or medicinal product covered by sub-heading 3003.19 and there was no good rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and starch (75%) but no boric acid''. Then again in para 30, the Secretariat had opined that the conc. of boric acid in talc is limited to 5%. Regarding salicylic acid, the Secretariat opined that they would lean towards classification of shower to shower and Johnson's prickly heat powder as preparations for the care of skin in Heading No. 33.04." 9.After noticing the finding of the Harmonized System Committee the Tribunal noted that the Central Excise Tariff is now based on HSN and the opinion and recommendation of the Committee cannot just be brushed aside simply because similar products are manufactured or sold under drug licence. 10.Indeed, the effect of Harmonised System of Nomenclature (HSN) classification came up for consideration before this Court in Collector of Central Excise, Shillong v. Wood Craft products Ltd., [1995 (77) E.L.T. 23 (S.C.) = 1995 (3) SCC 454]. This Court stated therein that when the Central Excise Tariffs are based on internationally accepted nomenclature found in the HSN, any dispute relating to tariff classification must so far as possible be resolved with reference to nomenclature indicated by HSN unless there be an express different intention in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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