Customs, Excise and Gold Tribunal - Delhi
Cce vs Shree Baidyanath Ayurved Bhawan Ltd. on 17 March, 2004
Equivalent citations: 2004(94)ECC291
ORDER V.K. Agrawal, Member (T)
1. In this appeal, filed by the Revenue, the issue involved is whether the extracts of various herbs & shrubs manufactured by M/s. Shree Baidyanath Ayurved Bhawan Ltd, are leviable to Central Excise duty.
2. Shri Vikash Kumar, learned SDR, submitted that the Commissioner under the impugned Order has dropped the proceedings initiated against the Respondents under show cause notice dated 28.7.94 on the ground that vegetable extracts are not marketable and hence not goods; that even if the impugned vegetable extracts are held to be marketable they would be classified as Ayurvedic medicaments under Sub-heading 3003.30 of the Schedule to the Central Excise Tariff Act which attracted exemption from payment of duty during the relevant period; that the Commissioner had also relied upon the Board's Circular No, 334/50/97-CX dated 16.9.97 wherein it was clarified that liquid vegetable extracts unless subjected to fermentation or other preservative process are not liable to be considered goods attracting the scope of Excise duty. Mixed or compounded vegetable extracts which have therapeutic or prophylactic value are appropriately classifiable under Heading 30.03 of the Central Excise Tariff........ Single ingredient extracts when put up in measured doses for therapeutic or prophylactic purposes or in forms of packing for retail sale for such purposes are appropriately classifiable under heading 30.03 of the Central Excise Tariff. Learned SDR, further, submitted that the Appellate Tribunal in the case of Dabur India Ltd. v. CCE, Meerut, 2001 (76) ECC 612 (T) 2001 (138) ELT 1167 (T) has held that vegetable extracts prepared from herbs for manufacture of Ayurvedic/Unani medicament have definite name, character and use and are capable of storage and are marketable, and therefore, they were goods liable to Central Excise duty under Sub-heading 1301.90 of the Tariff; that the Tribunal has also held that the extracts, though some of them were possessing therapeutic or prophylactic properties were not medicament themselves; that thus the Commissioner's Order is not in conformity with the Tribunal's decision.
3. Shri Abhishek Jain, learned Advocate, mentioned that the Tribunal's decision in Dabitr India Ltd. has been set aside by the Supreme Court as reported in 2003 (257) ELT 129 (SC). The learned SDR fairly mentioned that the Tribunal's Order has been set aside by the Supreme Court.
4. The Supreme Court in the decision in the case of Dabur India Ltd. (supra) has held that if the Compounded Vegetable Extracts had any therapeutic or prophylactic value they were appropriately classifiable under Chapter 30.03. There is no requirement that the extracts should be used for therapeutic or prophylactic purposes "as such". The Supreme Court also observed that the Tribunal which refers to the Circular misinterpreted it when it said that "the ingredients -- vegetable extracts cannot be confused with the final medicament prepared from such extracts alongwith other ingredients. Merely because the herbs had medicinal properties, it cannot be said that the extracts for medicaments as per the definition in the Tariff and as commonly understood." The Supreme Court, therefore, found Tribunal's reasoning to be contrary to the CBEC Circular and in any event wholly contrary. As the Revenue in its appeal has relied upon only on the Tribunal's decision in Dabur India Ltd. case which stands reversed by the Supreme Court there is no merit in its appeal which is rejected.