Customs, Excise and Gold Tribunal - Delhi
Baidyanath Ayurved Bhawan Ltd. vs Cce on 6 February, 2002
Equivalent citations: 2002(82)ECC185
ORDER S.S. Kang, Member (J)
1. The issue in respect of classification of 'Dant Manjan Lal' is referred to the Larger Bench. While referring the matter to the Larger Bench, the Division Bench of the Tribunal doubted the correctness of the earlier decision in appellants' own case i.e. in E/A No. 2237/99-Mum. (Final Order No. C-I/4292/WZB/2000 dated 13.12.2000, which was followed by the East Regional Bench in E/A No. E/R-95-96/2000 (Final Order No. A/2035-2036/CAL/2000 dated 14.12.2000 whereby it was held to be classifiable under sub-heading 30.03 of the Central Excise Tariff.
2. The issue involved in the present case is in respect of classification of 'Dant Manjan Lal' for the period from June, 91 to May, 97 and the lower authorities held that the product, in question, is classifiable under Chapter headings 33.06 of the Central Excise Tariff after relying upon the decision of the Hon'ble Supreme Court in appellants' own case i.e. M/s. Baidyanath Ayurved Bhavan .
3. Ld. Counsel, appearing on behalf of the appellants, submitted two-fold arguments. The first argument is that the ratio of the decision of the Hon'ble Supreme Court in appellants own case (supra), is not applicable to the facts of the present case. The issue before the Hon'ble Supreme Court was in respect of benefit of Notification No. 62/78 whereby the total duty exemption is provided to all drugs, medicines, pharmaceuticals and drug intermediates not elsewhere specified.
4. The contention of the appellants is that in respect of notification, the Hon'ble Supreme Court held that 'Dant Manjan Lal' is not an ayurvedic medicine, therefore, is not eligible for exemption under Notification No. 62/78. Their, further, contention is that with the introduction of new Central Excise Tariff, 1985, Chapter 30 covers pharmaceutical drug including ayurveda, unani, siddha, homoeo or bio chemic systems. This tariff heading was, further amended in the year 1996 and new sub-heding 3003.31 was inserted which covers medicaments manufactured exclusively in accordance with the formulae described in the authoritative book specified in first schedule to Drugs and Cosmetics Act and sold under the name specified in such book or Pharmacopoeia. Their, further, submission is that there is specific tariff entry in respect of the goods, in question, hence the classification of the goods is to be decided in view of the specific entry made in the tariff and in absence of any definition being given in the tariff, meaning of term in common parllance or commercial parlance is to be adopted. For this, the Id. counsel relied upon the decision of the Hon'ble Supreme Court in the case of CCE v. Fenoplast (P) Ltd. and in the case of Bakelite Hylam Ltd. v. CCE .
5. The second argument is that with the introduction of new tariff, the product, in question, is specifically covered under chapter 30. The tariff entry 3003 covers medicaments including those used in Ayurvedic, Unani, Siddha and Homoeo or Bio-Chemic systems and this entry was amended in the year 1996 and the sub-heading 3003.31 covers medicaments manufactured exclusively in accordance with the formulae described in authoritative book specified under the first schedule to the Drugs and Cosmetics Act and sold under the name specified in such books. His contention is that 'Dant Manjan Lal' is manufactured according to the formulae described in the book 'Ayurved Sar Sangreh' and this book was included in the first Schedule to the Drugs & Cosmetic Act, 1940w.e.f. 28.8.1987. His submission is that the product, in question, comprises of several ingredients such as Geru Mitty (red earth), Tamala Patra, Kali Mirch, Babul, Pippali, Akarkara, Lavanga, Kapur, Pepperamint, etc. mixed for therapeutic/prophylactic uses in terms of formulae described in the book, therefore, is classifiable under chapter heading 3003.30/3003.31. He, further, submitted that 'Dant Manjan Lal is manufactured under Drugs Licence issued by the competent authority.
6. He, further, relied upon the Board's Circular dated 25.9.1991 (issued in file No. 103/10/90-CX. 3), which clarified that 'Dant Manjan Lal is classifiable as Ayurvedic medicine and directed Central Excise field authorities to finalise pending assessments of the goods accordingly. However, he admitted that the fact that this circular was withdrawn on 31.10.1996 after the decision of the Hon'ble Supreme Court in appellants' own case. He, further, submitted that the Board again issued a circular dated 27.5.1997 in the light of change in tariff entry to the effect that 'Dant Manjan Lal is an Ayurvedic medicine. He relies upon the decision of Hon'ble Supreme Count in the case of B.P.L. Pharmaceuticals Ltd. v. CCE and the decision of the Hon'ble Delhi High Court in the case of Manisha Pharma Plasto Pvt. Ltd. v. Union of India .
7. Ld. DR., appearing on behalf of the revenue, submitted that 'Dant Manjan Lal is a tooth powder and is specifically covered under heading 3306 of the Central Excise Tariff. As the product is marketed as tooth powder and is known as such in the common parlance, it cannot be considered to be a medicine. His submission is that there is nothing on record to show that 'Dant Manjan Lal requires no medical prescription and, in fact, it is used as tooth powder. He relied upon Chapter Note 1 to Chapter 30 to say that preparations of Chapter 33, even if they have therapeutic properties, are excluded from the scope of Chapter 30. He also relied upon Chapter Note 2 of Chapter 33, which provides that this chapter covers products falling under this chapter and put up in packings 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 use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents or having subsidiary curative or prophylactic value. In respect of board's clarifications, he submitted that the board issued a circular dated 10.9.1997 whereby all the previous circulars were recended and authorities were directed to classify the product according to Chapter Note 1 (d) of Chapter 30 and Note 2 of Chapter 33 of the Tariff. He relied upon the decision of the Tribunal in the case of Panram Ayurmed Pvt. Ltd. v. CCE 2000 (125) ELT 639 (T)
8. We have considered the submission made by both the parties and we agree with the first arguments of the appellants that the classification of 'Dant Manjan Lal' is to be decided in view of the tariff entries. The issue before the Hon'ble Supreme Court in their own case (supra) is in respect of eligibility of 'Dant Manjan Lal' under the Notification No. 62/78, which provides exemption to all drugs/medicines/pharmaceuticals and drugs intermediates not elsewhere specified and while interpreting the provisions of notification, the Hon'ble Supreme Court held that 'Dant Manjan Lal' is not an ayurvedic medicine. With the introduction of the new Central Excise Tariff, 1985, the classification of the product, in question, is to be decided in view of the tariff entries.
9. For deciding the classification, the relevant entries of the tariff are reproduced below:
Chapter 30--
Pharmaceutical Products--
Notes:
1. This Chapter does not cover
(a)
(b)
(c)
(d) Preparation of Chapter 33 even if they have therapeutic or prophylactic properties.
2. For the purpose of heading 30.03:
(i) 'Medicaments' means goods (other than foods or beverages such as dietetic, diabetic or fortified foods, tonic beverages) not falling within heading No. 30.02 or 30.04 which are either:
(a) products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses; or
(b) unmixed products suitable for such uses put up in measured doses or in packings for retail sale or for use in hospitals.
Heading 30.03 is reproduced as under:
30.03--Medicaments (including veterinary medicament).
3003.30--Medicaments (including those used in Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic Systems.
10. This tariff entry was subsequently amended in the year 1996 and sub-heading 3003.31 is reproduced below:
3003.31--Manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 (23 of 1940) or Homoeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homoeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopoeia.
11. The contention of the appellants is that they were manufacturing 'Dant Manjan Lal', as per the formulae prescribed in the book 'Ayurveda Sar Sangreh' and were also using the same name. This book was Included in the First Schedule to Drugs & Cosmetic Act, 1940.
12. From the reading of the above chapter notes of Chapter 30, the definition of medicament provides that medicament is a drug comprising two or more constituents which had been mixed or compounded together for therapeutic or prophylactic uses. The appellants had produced only two undated certificates issued by one Dr. M.R. Unyal, Herbal Specialist to show that 'Dant Manjan Lal' prevent dental diseases. The other certificate is issued by Dr. V.N. Pandey, Ayurvedic Consultant, who describes the formulae and gave details of ingredients of the 'Dant Manjan Lal' to show that each ingredient has therapeutic/prophylactic properties. Except these certificates, the appellants had not produced any acceptable evidence that the product is prescribed by Medical Practitioner as a medicine for any disease or condition. On the other hand, it is admitted fact that the 'Dant Manjan Lal' is for daily use. In the absence of any evidence, we are unable to hold that 'Dant Manjan Lal' is a medicament as provided under Note 2 of Chapter 30 of the Tariff.
13. Further, we find that the book 'Ayurveda Sar Sangreha' is published by the appellants and the contention of the appellants is that they had complied formulae provided under the ancient books. But we find in respect of 'Dant Manjan Lal' there is no reference to any ancient book or document from which this formulae had been taken.
14. Further, the ratio of the decision, relied upon by the appellants, is not applicable in the facts of the present case. In case of B.P.L. Pharamcuticals (supra), the Hon'ble Supreme Court in para 21 of the Judgment held as under:
So far as medicinal properties of the product are concerned, it can be gathered from the technical and/or pharmaceutical references that Selenium Sulfide has anti-fungal and 'anti-seborrhoeic properties and is used in the detergent medium for the treatment of Dandruff on the scalp which is milder form of seborrhoeic dermatitis and Tinea Versicolour. 2.5% of this compound is the Therapeutic quality.
15. In the present case, this evidence is lacking. Similarly, the Hon'ble Delhi High Court in the case of Manisha Pharma Plasto Pvt. Ltd (supra) held that the produce is not used as daily use talcom powder. It is a product normally used for specific purpose for treating prickly heat and as soon as the ailment is cured the use of the product is discontinued. In the present case as mentioned above the 'Dant Manjan Lal' is for daily use and not as a medical prescription for treatment of any disease.
16. The reliance of Deptt. instruction is also not helpful to the appellants as the instructions for classification of the product under Chapter 30 were withdrawn on 10.9.1997 and the Hon'ble Supreme Court in the case of Union of India v. Bajaj Tempo Ltd. held that the Tribunal is not bound by the such instructions.
17. Further, we find that Chapter Note 1 (d) of Chapter 30 of the Tariff specifically provides that this Chapter does not cover the preparations of Chapter 33 even if they have therapeutic/prophylactic properties,. Therefore, the 'Dant Manjan Lal' in view of above, cannot be classified under Chapter 30 of the tariff.
18. Chapter Note 2 of Chapter 33 of Central Excise Tariff provides as under:
Chapter Note 2 of Chapter 33--Heading Nos. 33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for 'use as goods of these headings and put up in packings 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 use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value.
Tariff sub-heading 3306 covers the preparations for or dental hygiene, including dentifrices and denture fixative pastes and powders. Assuming that 'Dant Manjan Lal' has some minor curative or prophylactic ingredients, by virtue of Note 2 of Chapter 33, the product has to be classified as tooth powder classifiable under sub-heading 3306 of the Tariff. The reference is answered accordingly. Contrary view taken in appellants own case, in appeal No. E/2237/99-Mum. and Appeal No. E/R/95-96/2000, is not correct in law.
19. The appeals are sent back to the appropriate Bench for further orders.