IMPORTANT POINT
The appellant s product "Lip Salve" is a sort of skin care lotion or cream specifically manufactured for defence personnel on High altitudes and is rightly classified by Tribunal under Heading 33.04 "A preparation for care of skin" under Central Excise Tariff Act, 1985.

Headnote:Central Excise Tariff Act, 1985-Headings 33.04-"Preparation for care of skin"-30.03-"Medicament" classification of manufactured product for payment of excise duty-Appellant manufacturing "Lip Salve" making it suitable for use of defence personnel in India and especially those posted in High altitude areas-Tribunal by majority of 2:1 holding it preparation for care of skin"-Appeal to Supreme Court-Contention it should be classified as "medicament"-Whether correct? (No)-Appeal dismissed.
       Held : It is well established that in interpreting tariff entries in taxation statute like Excise Act where the primary object is to raise revenue and for that purpose various products are differently classified, the entries are not be understood in its scientific and technical meaning. The terms and expressions used in tariff have to be understood by their popular meaning that is the meaning that is attached to them by those using the product. (Para 5)
       Held further : Reading the above underlined portions of Note 2 and note No. 5 with entry 33.04, we find ourselves in the agreement with the majority opinion of the Tribunal that the product Lip Salve is a kind of "barrier cream" or a protective cream against skin irritants. It, therefore, clearly falls under entry 33.04 and conforms to the description preparation of the care of the skin other than medicaments . The learned counsel of the appellant has not been able to persuade us to take a different view from the one taken in the majority opinion of the Tribunal. We confirm that the product Lip Salve is essentially a preparation for protection of lips and skin and is not a medicament . Such preparations which have a subsidiary curative or prophylactic value clearly fall under entry 33.03 to 33.07 as per note No. 2 under Chapter 33. The product clearly is covered by entry 33.04 read with note No.5 of Chapter 33, it essentially being a preparation for protection of lips or skin. We have also gone through the minority opinion expressed by one of the members of the Tribunal and the reasoning therein supported before us on behalf of the appellant. For the reasons aforesaid, we are unable to agree with the minority view. In the result, we find no merit in these appeals and the same are hereby dismissed. (Para 13)

JUDGMENT

Dharmadhikari, J.-The present two appeals have been preferred under Section 35L(b) of the Central Excises & Salt Act, 1944 against the three-member judgment [reported in 1997 (92) E.L.T. 53 (Tribunal)] of the Customs, Excise & Gold (Control) Appellate Tribunal [for short CEGAT ], Principal Bench C , New Delhi. The Tribunal by majority opinion of two against one held against the appellant that its manufactured product with trade name Lip Salve is classifiable for payment of excise duty under Heading 33.04 of the Central Excise Tariff Act, 1985 [hereinafter referred as Act ] as a preparation for care of skin and not as a medicament under Heading 30.03 of the Act.

2. The minority view expressed by one Member of the Tribunal in favour of the appellant is that its manufactured product Lip Salve is classifiable as medicament under Chapter 30.03 of the Act although the sub-classification is required to be re-determined by remanding the case to the Assistant Collector of Central Excise.

3. In the impugned order of the Tribunal, the chemical composition of the product, the manner in which it is marketed and supplied as also its common parlance meaning have all been examined. For deciding these appeals, it is sufficient for us to broadly explain the nature of the product for examining the correctness of the finding reached by the Tribunal. The learned counsel appearing for the appellant very strenuously supported the minority view of the Tribunal. By taking us through the medical literature on the subject, it is stressed that the product is supplied for use of soldiers posted in high altitude areas. It is a medicament for treatment of sore, inflamed, roughened and cracked lips. The product is manufactured in accordance with Defence Services Specifications. Its ingredients are white bees wax, white soft paraffin, liquid paraffin, lanolin - all ingredients conforming to I.P. Grade; Cetyl Alcohol C.P. Grade. The other ingredients are Stabliser and perfume. It is pointed out from 1923 Edition of British Pharmaceutical Codex that the chemical combination prescribed in British Pharmacopoeia has been changed for making it suitable for use of defence personnel in India and especially those posted in high altitude areas. On this basis, it is contended that the product supplied exclusively to Defence Department for use of military personnel posted in high altitude areas is a medicament and not merely a skin care preparation . It is classifiable as medicament under Chapter 30.03 of the Act.

4. On behalf of the Revenue, the learned standing counsel submitted that the drug licence obtained by the appellant under the Drugs and Cosmetics Act, 1940, itself mentions that it is a licence for ointment and cream for external application as a non-pharmacopoeia item . In the certificate of the Deputy Director [General] of the Directorate-General of Health Services issued on 09-2-1987, there is a mention that Lip Salve is a protective/preventive cream used for treatment of chapping of lips. It further says that chapping of lips includes sores, inflammation, characteristics, fissures and similar diseases of mucous membrane of lips. It is a matter of common knowledge that chapping of lips occurs because of dryness of air and in cold weather. It is not necessarily limited to high altitude areas although such chapping of lips is more acute in high altitude areas where there is severe cold and sun rays. The use of the product is for protecting the skin and lips against damage caused by natural factors such as cold and weather conditions.

5. It is well established that in interpreting tariff entries in taxation statute like Excise Act where the primary object is to raise revenue and for that purpose various products are differently classified, the entries are not be understood in its scientific and technical meaning. The terms and expressions used in tariff have to be understood by their popular meaning that is the meaning that is att

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2003 Supreme(SC) 37

IMPORTANT POINTThe appellant s product "Lip Salve" is a sort of skin care lotion or cream specifically manufactured for defence personnel on High altitudes and is rightly classified by Tribunal under Heading 33.04 "A preparation for care of skin" under Central Excise Tariff Act, 1985.

Cases Referred (3)

IMPORTANT POINT
The appellant s product "Lip Salve" is a sort of skin care lotion or cream specifically manufactured for defence personnel on High altitudes and is rightly classified by Tribunal under Heading 33.04 "A preparation for care of skin" under Central Excise Tariff Act, 1985.