Per G.A. Brahma Deva :

This appeal arises out of and is directed against the Order No. 10/2000 dated 20.9.2000 passed by the Commissioner of Central Excise Mananchira, Calicut.

2. At the first instance, matter was posted to hear the stay petition. After hearing for some time with reference to the stay petition on last occasion i.e. on 19th June 2002, both the sides were asked to be ready to argue the main matter and accordingly, appeal was taken for regular hearing with the consent of both sides.

3. Shri G. Shiva Das appearing for the appellants submits that this matter is coming before the Tribunal for a second time. The impugned order has been passed by the Commissioner as a consequence to the order dated 2.8.99 passed by the Tribunal remanding the matter to the Commissioner for re-consideration of the issue. He said that the dispute is in respect of classification of the products viz. 'Nenmeni Snana Choornam and 'Ousadha Thali'. Whether they are classifiable as Ayurvedic medicines under Chapter Heading 3003.30, which are exempted from payment of duty, as claimed by the party or under Chapter Heading 3307.30 and 3305.90 respectively as per the Department is an issue to be considered herein. He said that both the items are Ayurvedic medicaments and correctly classifiable under 3003.30. On merits, he said that as early as in 1991, the Revenue had issued a circular on 3.10.91 accepting the prescription of the two tests for a product to be considered as an Ayurvedic medicament. Referring to the Circular No. 25/91 dated 3.10.91, he drew our attention to the relevant para 3 of the circular which reads as under:-

"3. The Government have further examined the matter in the light of parameters prescribed by the Tribunal in their Order No. 116/88-C, dated 10-2-1988 in the case of M/s. Richardson Hindustan Ltd. Vs. C.C.E., Hyderabad. The Tribunal held that a preparation would merit classification as an Ayurvedic medicine, if in the common parlance, it is known as an Ayurvedic medicine and all its ingredients are mentioned in the authoritative book(s) on Ayurvedic medicines. It has also been observed that the aforesaid two tests have been upheld by Hon'ble Supreme Court in the case of Civil Appeal No. 2127 of 1988-C.C.E., Hyderabad Vs. M/s. Richardson Hindustan Ltd. Supreme Court's Order dated 10.1.1989."

He said according to the circular, the prescription for classifying the item as an ayurvedic medicine, it should be known as Ayurvedic medicine in common parlance and all its ingredients are mentioned in the authoritative books on Ayurvedic medicines. The Commissioner in the impugned order has accepted that the ingredients of goods in question are indicated in the Ayurvedic books and therefore the test is satisfied. Nevertheless, he proceeded to determine the classification of the product under different heading other than 3003.30 as claimed by the party on the ground that item was not manufactured as per the formula prescribed in the Ayurvedic Text books. He said that the item is classifiable under Heading 3003.30 as an ayurvedic medicine though not manufactured exclusively in accordance with the formula prescribed in such books and sold under name specified therein as it was held by the larger bench of the Tribunal in the case of Himtaj Ayurvedic Udyog Kendra Vs. CCE Allahabad reported 2002 (48) RLT 264 (CEGAT-LB)=2002 (139) ELT 610 (T.LB).

4. He submitted that as regards the second test the applicants had produced the Drug licence issued by the Deputy Drugs Controller State Govt. of Kerala which certified that the product in question is an Ayurvedic product. The appellants have also produced prescriptions from various doctors, letters from the dealers as well as from the users to substantiate that items in question as 'Ayurvedic medicines.'

5. Shri Narasimha Murthy justified the action of the department in classifying the item under Heading 3307.30 and 3305.90 on the ground that the item was not prescribed by a medical practitioner and