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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BOMBAY
DR. S.L. PEERAN, K.C. Mamgain, JJ.
Arya Vaidya Pharmacy (Cbe) Ltd. -Appellant
Versus
Commissioner of Central Excise, Cochin -Respondent
Final Order Nos. 1172 & 1173/2004 Appeal Nos. E/164 & 165/2002, 1172 of 2004, 1173 of 2004, 165 of 2002
Decided On : 02-07-2004
Krishnan Kutty,L. Narasimha Murthy
Per Dr. S.L. Peeran : Both these appeals arises from a common Order-in-Appeal No. 498/2001 and 499/2001 dtd. 20.12.2001. The appellants are manufacturers of ayurvedic products. In respect of four specific products the original authority had classified the same as cosmetics/toilet preparations under Customs Tariff Heading 3304 and 3305.99, while the appellants claimed classification under Chapter Heading 3003.30 w.e.f. 1.3.97 as ayurvedic medicaments. The finding recorded by the Commissioner (Appeals) on merits of the case is extracted below as all the documents and the aspects have been clearly brought out on the same. The findings recorded in Para 4 (A) to 8 are reproduced herein below:-
(A) (i) From the records it is seen that the Departmental proceedings to revise the classification was initiated as per the Supreme Court judgment dated 30.3.95 in the case of Sri Baidyanath Ayurved Bhawan Ltd. The subsequent Ministry's Circular F.No. 333/49/97 CR, dated 10.9.97 reported in 1997 (95) ELT T-14 was issued relying on the Supreme Court judgment and Tribunal decisions in the case of M/s. Alpine Industries reported in 1995 (10) RLT 416 (CEGAT-C)=1997 (92) ELT 53 (T), M/s. Richardson Hindustan Ltd., 1988 (35) ELT 424 (T). As per Ministry's circular the Commissioners were directed to re-examine the assessments of products claimed to be Ayurvedic medicines under Ch. 30 so as to re-determine their classification under Central Excise Tariff Act 1985. For the correct classification, the following facts were required to be kept in view:-
(a) The perception of the product in popular parlance, whether as medicaments or cosmetics/toilet requisite. The advertising, marketing and the manner in which the product is put up may also be taken into consideration.
(b) It may be ascertained that the products claimed to be medicaments, should have substantial therapeutic claims which are not subsidiary in nature and the mode of prescription and use should be similar to that of medicine/drug. It may be noted that the medicaments are normally prescribed in doses, for a limited time, and for specific conditions/ailments.
(c) The drug licence may be used as a guide for the classification of a product but not as the determining factor. The classification of a product under Chapter 30 or Chapter 33 may be done as per the Rules of interpretation of the Central Excise Tariff Act, 1985 read with Chapter Note 1.
(d) Chapter 30 and Chapter Note 2 to Chapter 33 and various judgments mentioned above.
(ii) Hence the appeal is to be examined in the light of the above guidelines in so far as the four products manufactured by them. On examination of the facts it is seen that, (a) all the four products are manufactured under the Drug License No. 33/25D/76 in Form No. 5 specified for the manufacture of ayurvedic drugs only, (b) all the four products are manufactured in accordance with the formula approved by the Drugs Controller as required under the Drugs
According to Chapter Note 2 of Chapter 33, to classify a product as cosmetic, (a) the product should be suitable for usage as goods of Chapter 33, (b) the product should be put up in packings with labels, literature and indications that they are for use as cosmetic or toilet preparation, and (c) it should be put up in a form clearly specified to such use and includes products whether or not they contain subsidiary prophylactic or antiseptic constituents or are held out as having subsidiary curative or prophylactic value.
(iii)(B) In order to examine the above parameters, the details of these 4 products as given on the labels are as discussed below:
