( 1 ) THE question for consideration in the present writ petition is about the classification of Nycil Prickly Heat Powder, i. e. whether it falls under heading 30. 03 or it falls under heading 33. 04 of the Central Excise Tariff.

( 2 ) THE petitioner is engaged in manufacturing prickly heat powder called "nycil" under a manufacturing licence issued by the Drug Controller under the Drugs and Cosmetics Act, 1940. According to the petitioner, the said product is used for prevention and cure of ailments such as athlete s foot, dhobie itch, prickly heat and sores. The presence of the drug Chlorphenesin IP in the product helps in prevention and cure of such ailments because the said medicine has a strong anti-bacterial and antifungal agent. According to the drug licence, the composition of the petitioner s product is as under :

CHLORPHENESIN IP 1%w/w Zinc Oxide IP 16% w/w Starch-IP 51% w/w Talc Purifies IP to 100% w/w

( 3 ) THE petitioner has challenged a Circular No. 356/72/97-CX dated 20th November, 1997 and an order dated, 5th November, 1997 under section 37b of the Central Excise and Salt Act, 1944. By these orders, the respondents have classified Nycil Prickly Heat Powder for purposes of levy of excise duty under the heading 33. 04 which covers "body of make-up preparations and preparations for the care of the skin (other than Medicaments) including sunscreen or suntan preparations, manicure of pedicure preparations. "

ACCORDING to the petitioner prior to the impugned orders, its product Nycil was considered as falling under Chapter 30 and was classified under heading 30. 03/subheading 3003. 10 which includes patent or proprietary medicines. It is further pointed out that the matter of correct classification of prickly heat powders was referred by the Central Broad of Excise and Customs to the Customs Co-operation Council at Brus-sels for its opinion. The Council referred the matter to the Harmonised Systems Committee (for short HSC) which considered the matter in its tenth session and opined as under:

"the Committee unanimously agreed with the view expressed by the Secretariat in paragraphs 32 and 33 of the working document that the prickly heat powders under examination should be classified as follows :

HEADING Nycil 30. 04 Shower to Shower 33. 04. Johnson 33. 04

( 4 ) THE controversy as to whether Nycil Powder is a drug or a cosmetic product has been going on since long. In the year 1966, the Government of India in exercise of its appellate powers held in an appeal that Nycil merited classification as a patent and proprietary medicine under Traiff item 14e and was not a cosmetic. Nycil thus continued to be taxed under the Act as a patent and proprietary medicine till 1985 when suddenly the controversy was again raked up. By an order dated 17th December, 1986, the Assistant Collector of Central Excise. Thane in exercise of his powers under Rule 173-B read with other provisions of the Act held that Nycil was patent and proprietary medicine falling under Traiff item 14e and was not a cosmetic under Tariff item 14f. Thus, under the old tariff which was operative till 28th February, 1986. Nycil was held to be a drug and not a cosmetic.

( 5 ) THE Central Excise Traiff Act, 1985 was enforced w. e. f. 28th February, 1986. Chapter 30 included pharmaceutical products and corresponded to erstwhile tariff item 14e whereas Chapter 33 included cosmetic preparations and corresponded to erstwhile item 14f. The Central Board of Excise and Customs agreed to. the classification of Nycil under Chapter 30 holding that it was drug. The controversy was raked up again in the year 1992 when the excise authorities issued show cause notice purported to classify Nycil under Chapter 33 and demand differential duties. The basis for raking up the controversy was on account or reservations expressed by the Public Accounts Committee in this behalf. Accordingly the Government of India made a reference to the Customs Co-operation Council at Brussels