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1 - 7 of 7 (0.38 seconds)Panama Chemical Works vs Union Of India (Uoi) on 2 July, 1992
7. Shri S.S. Radhakrishnan, learned Counsel for the respondents submitted that the lower appellate authority has passed a well reasoned order and has reached a correct conclusion holding that the product "Krithika Hair Vitalizer" merits classification under heading 3003.39, He has further submitted that the original authority has also very thoroughly discussed the issue in the order-in-original. He submitted that the product is a remedy for hair fall, graying of hair, dandruff and the dosage and the method of application etc. are indicated on the product and this position is not denied by the department. He submitted that a product manufactured out of the ingredients know to the Siddha system or any Indian system of medicine is a medicament of that system and it will attract duty of 8% and a medicament which is manufactured exclusively in accordance with the prescribed text book as mentioned in Drugs Act will not carry any duty. Therefore, irrespective of the fact whether the product is manufactured exclusively as per the prescribed text or is based on the manufacturer's own formulation, it is a medicament. He has also invited our attention to the judgment of the Hon'ble Madhya Pradesh High Court in the case of Panama Chemical Works v. UOI reported in 1992 (62) E.L.T. 241 wherein it was held that 'SWAD' digestive tablets having 3% active ingredients as per Ayurvedic texts and 97% . sugar/liquid glucose for taste and as a preservative is classifiable under subheading 3003.30 of the CET as Ayurvedic medicine and not as a confectionery. He has also invited our attention to Govt. of Tamil Nadu Commercial Department letter dated 20-6-97 clarifying the position that Siddha medicines are exempt under Section 17 of the TNCT Act. Referring to ground (2) above, taken by the Revenue, he submitted that there is no indication in the product packing or in the label or literature that it is for use as cosmetic. The product is also not put up in a form clearly specialised to such use as cosmetic. He submitted that note 2 has not been correctly and fully reproduced in the appeal ground of the Revenue and in fact what is specifically stated in this note is that products "put up in packing with labels, literature or other indications, that they are for use as cosmetics, will be classified under Headings 33.03 to 33.07. Hence Note 2 of Chapter 33 is not applicable to the product in question. He also referred to the printed literature of the product as noted by the original authority which reads "Generally the healing of any diseases by Siddha Sytem of medicine will be felt gradually. But in the case of Krithika Hair Vitaliser the healing will be felt (coolness on the scalp) within 2/3 hours. As the above herbals are saturated (soaked) in purified coconut oil (totally seven times, it is processed) the concentration works effectively. He further submitted that in the grounds of appeal, the Revenue has also stated that as per Note 1(d) of Chapter 30, this Chapter will not cover preparations of Chapter 33 even if they have therapeutic or prophylactic properties. He submitted that what is stated in the note is that preparations of Chapter 33 i.e. cosmetics cannot be classified as medicament even if they have therapeutic or prophylactic properties. He has therefore, submitted that basically the product must be a cosmetic and such a cosmetic product in spite of having medicinal properties cannot be classified as medicament. But in the present case, the product is basically a medicament and the therapeutic or prophylactic properties are substantial and not subsidiary. He further submitted that there is no indication whatsoever either on the carton or in the literature or in the label that the product is a hair oil as contended by the Revenue. On the other hand what is indicated is that it is a unique formulation of ancient siddha medicine enriched with herbals that not only nourishes hair but also gives them natural protection to the hair to stay healthy and beautiful and vanish dandruff and premature grayness. He further submitted that the herbal content in the product is 42% which is in contrast with product known as medicinal hair oil wherein the herbal content is not more than 3% to 5%. Therefore, it is a herbal decoction in oil base and not a hair oil as such for grooming the hair. Further, the price of the product is three times more than the price of perfumed hair oil and this itself is a sufficient evidence that a common man buys this product for specific ailment and not for grooming the hair and good appearance. Further, the Director of Drug Control as per the licence issued in Form 25E which is specific for manufacture of drugs in contrast to the licence issued in Form 31 for manufacture of cosmetics.
Manisha Pharma Plasto Pvt. Ltd.(M/S) vs Union Of India on 20 May, 1999
8. We have carefully considered the rival submissions, and gone through the entire case records and perused the various case laws cited by both sides. We find that the issue that arises for determination in this appeal is as to whether the product "Krithika Hair Vitalizer" is a cosmetic item viz. hair oil falling under CET 3305.10 as claimed by the Revenue or is a patent medicine of Siddha system falling under CET 3009.39 as held by the lower appellate authority and as claimed by the respondents herein. We observe that in the impugned order the Commissioner (Appeals) has noted the plea taken by the respondents that they have taken licence in Form 25E and this proved that the product is exclusively a siddha drug as defined in Section 3(a) of the Drugs and Cosmetics Act. He has also noted that there was no wilful suppression on the part of the assessee as they were under the bona fide belief that siddha medicines manufactured by them was exempted from levy of excise duty. We find that in the Hon'bl'e High Court of Delhi in the case of Manisha Pharma Plasto Pvt. Ltd. v. U.O.I. reported in 1999 (112) E.L.T. 22 (Del.) held that the product "Nycil Prickly heat powder" was a product normally used for the purpose of prickly heat and as soon as the ailment was treated, the use for the product was discontinued and accordingly it was held that the prickly heat powder is to be treated as a medicament and not as a cosmetic intended for care of skin under Chapter 33.
Shree Baidyanath Ayurved Bhawan Ltd. vs Cce on 29 July, 2002
Referring to the judgment in the case of Shri Baidhyanath Ayurvedic Bhavan (supra) he submitted that the classification has to be decided on the popular meaning and how the product is understood in popular parlance. He submitted that in popular parlance and in the understanding of the common man the product in question is nothing but a medicament and they have also submitted evidence to this effect before the original authority which was taken on file. As regards the ground taken by the Revenue that brand name "Krithika" belongs to another person i.e. M/s. Mothi Pharma Pvt. Ltd. and hence the exemption in terms of Notification No. 140/83-C.E. will not be applicable to the respondents, he submitted that the manufacturer of the impugned product was by M/s. Mothi Pharma Pvt. Ltd. in terms of Section 2(f) of the C.E. Act, 1944 as they were licenced by the Drug authorities to manufacture the product in question. He has also submitted a paper book containing various case laws in support of his plea and prayed for dismissing the appeals of the Revenue.
Rajasthan Excise Act, 1950
The Drugs (Control) Act, 1950
M/S. Himtaj Ayurvedic Udyog Kendra, ... vs Cce, Allahabad on 29 May, 2001
We also find that the CEGAT in the case of Himtaj Ayurvedic Udyog Kendra v. CCE, Allahabad reported in 2002 (139) E.L.T. 610 has held that Himtaj Oil having ingredients exclusively mentioned in authoritative text books on Ayurveda and understood in common parlance as an Ayurvedic medicament, is classifiable under sub-heading 3003.30 of the CET as an ayurvedic medicine even though not manufactured exclusively in accordance with formulae described in such books and sold under name specified therein and not under sub-heading 3305.10 as a perfumed oil. We observe that the Revenue has pleaded that the product in the present case "Krithika Hair Vitalizer" is available in Supermarkets and in all general stores along with hair preparation and it is not promoted with or prescribed by medical practitioners and hence cannot be considered as a medicament. We are not able to countenance this plea of the Revenue that a product just because it is available in general stores and supermarket cannot be considered as a medicament inasmuch as there is no such statutory requirement that a medicament should be sold only in medical shop as prescribed by a medical practitioner. As already noted above, it is common knowledge that prickly heat powder which is held to be a medicament is available in general stores and supermarkets. It is also common knowledge that Medical shops also sell not only medicines, but also general stores such as soap, cosmetics, tooth pastes, milk products, chocolates, toffy, hair oil etc. In short there is no such restriction that a general store or supermarket cannot sell medicament. In view of our discussion above, we are of the considered opinion that having regard to the licence issued by the Director of Drugs Control in Form 25E which is specific for manufacture of drugs, the ingredients of the impugned product including its herbal content, label, literature, character and common commercial parlance understanding and the price which is claimed to be three times more than hair oil, the view taken by the lower appellate authority that it is a medicament falling under sub-heading 3003.39 cannot be found fault with and we uphold the order impugned and reject the Revenue appeals as devoid of merits. Ordered accordingly.
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