Custom, Excise & Service Tax Tribunal
M/S.Mayar India Ltd., C.C.E., Delhi-Ii vs C.C.E., Delhi-Ii, M/S.Mayar India Ltd on 22 February, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT III
Excise Appeal No.E/642/2007-EX [DB]
[Arising out of Order-in-Appeal No.109-CE/DLH/2006 dated 12.12.2006 passed by the Commissioner (Appeals), Central Excise, Delhi-II, New Delhi].
Excise Appeal No.E/1452/2007-EX [DB]
[Arising out of Order-in-Appeal No.27-CE/DLH/2007 dated 22.03.2007 passed by the Commissioner (Appeals), Central Excise, Delhi-II, New Delhi].
Excise Appeal No.E/1024/2008-EX [DB]
[Arising out of Order-in-Appeal No.11-CE/DLH/II/2007 dated 18.02.2008 passed by the Commissioner (Appeals), Central Excise, Delhi-II, New Delhi].
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. B.RAVICHANDRAN, MEMBER (TECHNICAL)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s.Mayar India Ltd., C.C.E., Delhi-II Appellant
Vs.
C.C.E., Delhi-II, M/s.Mayar India Ltd., Respondent
Present for the Appellant : Mr.B.L.Narasimhan, Advocate
Present for the Respondent: Ms. Neha Garg, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. B.RAVICHANDRAN, MEMBER (TECHNICAL)
Date of Hearing/Decision: 22.02.2016
Final ORDER NO. 50933-50935/2016
PER: B.RAVICHANDRAN
These three appeals are dealing with the same issue and are taken up together for disposal. The appellant/assessee are engaged in the manufacture of various Ayurvedic medicines like Neem, Boswellia, Serrata, Ashwagandha, Gymnema, etc. They classified these items under tariff heading 3003.31 and claimed full exemption. Revenue felt that these products are rightly classifiable under tariff heading 3003.39 and liable to duty as Patent or Proprietary Medicament. The reason for such claim is that these products carried trade name Sivananda and Om and hence appeared to have been sold as P or P medicines.
2. Proceeding initiated against the appellant/assessee for the period 2002-03 to 28.11.2004 resulted in order dated 30.03.2005. The original authority classified these products under tariff heading 3003.39 and confirmed duty liability and imposed equal amount of penalty also. On appeal, the ld. Commissioner (Appeals) rejected the appeal. Aggrieved by this order the appellant/assessee is in appeal before us.
3. In two other proceedings the ld. Commissioner (Appeals) upheld the appellant/ assessees claim for classification under tariff heading 3003.31 for Chawanprash and other Ayurvedic medicines mentioned earlier in the order. Aggrieved, the Revenue filed two appeals.
4. Ld. Counsel for the appellant/assessee submitted that
a) all the Ayurvedic medicines now under consideration are manufactured as per the formula prescribed in authoritative text books of Ayurveda.
b) For a product to be classified under tariff heading 3003.31, the conditions are that
(i) the product should be manufactured in accordance with formulae described in the texts
(ii) all ingredients used are to be mentioned in the said books and
(iii) the product should be sold under the name as specified in such books. The appellants satisfy all these conditions.
c) the ld. Commissioner (Appeals) has not dealt with any of the submissions made by the appellant/ assessee with reference to scope of tariff classification under heading 3003.31. The decisions relied upon by the Commissioner (Appeals) are not at all relevant to their case.
d) reliance was placed on Tribunals decisions in Zandu Pharmaceuticals 2004 (172) E.L.T. 457 (Tri.-Mum.); 2006 (198) E.L.T. 257 (tri. Mum.), Dabur India Ltd. 2007 (218) E.L.T. 211 (Tri.-Del.) and Honble Supreme Courts decision in Astar Pharmaceuticals (P) Ltd. 1995 (75) E.L.T. 214 (S.C.)
5. Ld. A.R. submitted that apart from name of the medicines the product labels clearly mentioned the trade name Sivananda with a registered design of Om. Such trade mark is meant to link the product with the company and the products are to be considered as proprietary medicines.
6. We have heard both the sides and examined appeal records. The point for decision in these appeals is that the Ayurvedic medicines manufactured by the appellant / assessee are to be classified either under Tariff Heading 3003.31 or 3003.39. The admitted facts of the case are that the appellant/ assessee are manufacturing these various Ayurvedic medicines in accordance with the formulae described in the authoritative books of Ayurveda. Further, it is also an admitted fact that the products carry the name as specified in such books. However, the point of dispute is whether or not the said medicines which are sold under the name as specified in such books are sold in effect in proprietary name of the appellant/ assessee.
7. We find that patent or proprietary medicaments other than Ayurvedic, Unani etc. are specifically mentioned under tariff heading 3003.10. However, there is no specific heading for patent or proprietary medicaments which are exclusively Ayurvedic. Such medicines are sought to be classified under Tariff Heading 3003.39 as - - other under the main heading medicaments. It is clear that such non-specific residual heading can be invoked only when specific headings are not found applicable to the products in question. As pointed out by the appellant / assessee that the conditions to be fulfilled for classifying the product under Tariff Heading 3003.31 are satisfied in the present case. The area of dispute is with reference to the name in which the said Ayurvedic medicines are sold by the appellant /assessee. The Original Authority observed that the goods are not sold exclusively under the name as specified in such authoritative textbooks. Since these medicines are sold with the registered trade-mark/ brand-name Shivananda and Om, these are to be considered as patent or proprietary medicaments classifiable under residual Heading 3003.39. We find that there is no such condition of the product to be sold exclusively in the name mentioned in the textbooks. Heading 3003.31 stipulates that medicaments to be manufactured exclusively in accordance with the formulae described in authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 etc., and sold under the name as specified in such books. There is no dispute that the impugned goods are manufactured in accordance with the formulae of the authoritative text and name as mentioned in the text are mentioned in the packing of the product. We have also perused copies of labels used for marketing these medicaments. The mention of the house name/ brand-name Shivananda/ Om cannot lead to the conclusion that these products are not sold in the name specified in Ayurvedic text. In Zandu Pharmaceuticals (supra) the Tribunal held that the word Zandu appearing on the label of Ayurvedic medicines will not disentitle the assessee from claiming the exemption available to Ayurvedic medicaments. Reliance was placed on C.B.E.C. clarification dated 29.03.1994. The Board clarified that Chavanprash prepared as per Ayurvedic Text Books and sold as Chavanaprash but the manufacturers name or mark, logo, symbol etc. is also prominently displayed, in such situation also full exemption as available to Ayurvedic medicines is to be extended. We also notice that the Honble Supreme Court in Astra Pharmaceuticals Pvt. Ltd. (supra) held that there is distinction between house mark and product mark. A monograph which only identifies the manufacturer would not make the medicine patent or proprietary. Considering the above analysis, we find that the appellant / assessee are right in classifying these products under Tariff Heading 3003.31 and claimed exemption available to Ayurvedic medicaments. Accordingly, the appeal filed by the appellant / assessee is allowed. On the same reasoning the appeals filed by the Department are dismissed.
(Operative portion pronounced in the open Court)
(B.RAVICHANDRAN) (S.K. MOHANTY)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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