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1. This is an appeal preferred against the Order-in-Appeal dated 30-7-1993 passed by the Collector of Central Excise (Appeals), Ghaziabad.

2. The point to be considered in this appeal is whether the product 'Hajmola Candy' manufactured by the appellants is classifiable under subheading 3003.30 as medicaments as claimed by the appellants or under subheading 1704.90 of the Central Excise Tariff Act as per the revenue.

3. The appellants filed the classification for Hajmola Candy under subheading No. 3003.30 and claimed benefit of exemption from excise duty under Notification No. 32/89, dated 1-3-1989. The Assistant Collector classified the product under sub-heading No. 1704.90 as sugar confectionary and confirmed the demand accordingly. He observed that Hajmola Candy contained approximately 75% sugar and the rest of the contents were used only to develop taste and the method of preparation was also not mentioned in any book on Ayurveda. While upholding the order passed by the Assistant Collector, the Collector (Appeals) observed that the appellants have not established that Hajmola Candy is commonly known as Ayurvedic medicine. On the other hand, the nature of product, the fact that it is consumed for taste and not known for cure any ailment, the manner in which it is advertised for sale and the fact that it is not known to be prescribed as a medicine by any one practising in Ayurvedic medicine and no dose is prescribed in the form of standard manner are all indicative of the fact that the product is really in the nature of confectionary and not in the nature of Ayurvedic medicine. The ingredients of Hajmola Candy are as under :-

 Shunthi.                              Pippali.
Kala Marich.                          Jeerak.
Saunf.                                Saindhava Lavan.
Kala Lavan.                           Ajwain.
Nimbu.                                Aam.
Imli.                                 Navsatar.
Sugar.
 

4. Arguing for the appellants Shri V. Lakshmikumaran, learned Advocate, submitted that Hajmola Candy is an Ayurvedic medicine and ingredients of Hajmola Candy are clearly specified in the Authoritative Books on Ayurveda. The sugar present in the formulation does not in any way affect efficacy of the active ingredients in relieving indigestion and the item in question is used to cure the disorder in stomach. He said that the issue has already been covered by the decision of the Hon'ble Madhya Pradesh High Court in the case of Panama Chemical Works v. Union of India, reported in 1992 (62) E.L.T. 241 wherein on identical product 'SWAD' containing identical ingredients, it was held that the product was an Ayurvedic medicine classifiable under sub-heading 3003.30. He referred to the relevant para in that judgement to show that ingredients of Hajmola Candy and Swad are one and the same. While assailing the impugned order he said that Collector was not right in taking different view on the ground that appellants have not produced any evidence to show that Hajmola Candy was commonly known as Ayurvedic medicine and no expert opinion has been placed on record in support of their contention. He said that the very fact that the appellants have obtained drug licence to manufacture this item as Ayurvedic medicine by Drug Control Authorities of Uttar Pradesh answers the test of common parlance as it was held in the case of Leucoplast (India) Ltd. v. State of Goa [1988 (36) E.L.T. 369A (Bom.)] that if a product is manufactured under Drug Controller's licence under the Drug and Cosmetics Act, it can be taken as understood in trade parlance and the decision rendered by the Madhya Pradesh High Court with reference to the identical product having similar ingredients on examining the experts' opinion on this issue substantiates the claim of the appellants that item is classifiable as Ayurvedic medicine under T.I. 3003.30. The addition of sugar or bulk in quantity would not change the quality of the active ingredients in the product and this was precisely considered in the aforesaid judgement. Sugar acts as binding agent or preservative not changing the nature of medicine but addition is only to mask the bitter taste of medicine. Department sought cancellation of Drug Licence in that case, but the Drug Controller after examining the goods with the analysis report found that there was no need to cancel and arrived at the conclusion that it was a medicine and in fact the Department has not questioned the Drug licence in this case. Referring to the Drugs & Cosmetics Act, 1940 as per definition Section 3(a) of that Act product had to be prepared in accordance with the formula described in the authoritative books on Ayurveda as noticed in the decision in the case of Amrutanjan Ltd., Madras v. Collector of Central Excise, Madras [1992 (19) ETR 481], and the goods herein called 'Hajmola' being patented medicine and as per Section 3(h) of that Act patent or proprietary medicine does not include a medicine which is administered by parental route and also a formulation included in the authoritative books as specified in clause (a). Hence the reasoning of the Assistant Collector that though the ingredients are mentioned in the authoritative books but the process of manufacture of Hajmola has not been mentioned in the authoritative books of Ayurveda is wrong and contrary to the provisions of Section 3(h) of the Drugs & Cosmetics Act, 1940. He said that the Collector (Appeals) is wrong in observing that the goods are not medicament in the absence of clinical test report. The goods are not scheduled drugs but only sold over the counters and products are used in treatment of minor stomach problems and all these points were considered in Panama Chemical Works (supra). Further the Collector (Appeals) has wrongly applied Rule 4 of the Interpretative Rules in determining the classification and proper Rule is Rule 3 where two headings are applicable but in the instant case heading 30.03 is specific for goods in question as they are used as medicaments.

6. On a careful consideration of the submissions made by both sides with reference to the facts and case law, we find that this issue has been covered by the decision of the Madhya Pradesh High Court in the case of Panama Chemical Works as it was rightly pointed out by the appellants' counsel. Since the ingredients of 'Swad' and 'Hajmola' are one and the same, we are not inclined to take different view on this issue. It is not even the case of the Department that ingredients of Hajmola are different from Swad. The Hon'ble High Court after examining the ingredients of the item with reference to the provision of Drugs & Cosmetics Act, authoritative Ayurvedic text books, and experts' opinion arrived at the conclusion that it was not an Ayurvedic medicine. No contrary decision of any High Court or of Apex Court with reference to the item in question or of identical goods having similar ingredients placed before us. The position would have been different if it was so. In the absence of any contrary decision respectfully we are following the decision of Madhya Pradesh High Court on this issue. Accordingly, we hold that Hajmola Candy is classifiable under heading 3003.30 of C.E.T.