TaxTMI 
TaxTMI 
TaxTMI 
The CESTAT, Ahmedabad in LYKA LABS LIMITED VERSUS C.C.E. & S.T. -SURAT-II - 2023 (9) TMI 567 - CESTAT AHMEDABAD set aside the order passed by the Adjudicating Authority and held that, addition of non-active ingredients such as preservatives, would not change the classification of the product, if the active ingredients are ayurvedic in such case, the medicament is classifiable as ayurvedic medicament.
Facts:
M/s. Lyka Labs Limited (“the Appellant”) manufactured Sensur Rubefacient and Herbyl Skin ointment.
The Appellant contended that, the product is manufactured out of Ayurvedic ingredients which are specified in Ayurveda Grantha and the product is sold as Ayurvedic medicine.
The Appellant further contended that, the Drug Authority has given license to these medicines as Ayurvedic medicine that the goods are marketed as Ayurvedic medicine, therefore, the product is clearly an Ayurvedic medicine and the Appellant have correctly classified the product as Medicine under ayurvedic medicament classifiable under heading 3003.30.
Moreover, merely because some of the ingredients which are other than active ingredients like preservatives, excipients, binding agent carriers or vehicle or fillers etc., even not prescribed in Ayurvedic text would not render the product to be classifiable under heading 3003.10 (other than medicament).
Issue:
Whether inclusion of preservatives in ayurvedic medicine result in change in classification to other than medicament?
Held:
The CESTAT, Ahmedabad in LYKA LABS LIMITED VERSUS C.C.E. & S.T. -SURAT-II - 2023 (9) TMI 567 - CESTAT AHMEDABADheld as under:
- Noted that, in order to classify a product as Ayurvedic medicament, there is no criteria or conditions provided under the Central Excise Tariff Act, however the Hon’ble Supreme Court in various judgment has provided tests for classification.
- Stated that, to classify medicament as Ayurvedic medicament, the following criteria to be satisfied.
- The medicament should be manufactured out of Ayurvedic ingredient specified in Ayurvedic Grantha or Ayurveda authoritative books.
- The medicament is sold as ayurvedic medicine in the trade parlance etc.
- Noted that, in the present case some of the ingredients are other than ayurvedic ingredients.
- Further noted that, non-active ingredients are in the nature of preservatives, excipients, binding agent, career or vehicle or filler etc., therefore, even though these product are other than ayurvedic ingredients, if the active ingredient are ayurvedic still the medicament is classifiable as ayurvedic medicament.
- Held that, the matter needs to be reconsidered in the light of the above observation and also by considering the various Supreme Court judgments.
- Set aside the Order and remand the matter to the adjudicating authority for passing a fresh order.
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