Ayurvedic medicament classification and limitation require full evidence-based review; matter remanded for fresh adjudication.

The classification of the two products as Ayurvedic medicaments and their eligibility for exemption required a reasoned evaluation of the competing evidence, including the material in the show cause notice and the certificates produced by the assessees. The adjudicating authority failed to discuss that evidence and also omitted to examine the plea of bona fide belief, which was relevant to limitation under Section 11A of the Central Excise Act, 1944. The order was therefore set aside and the matter remanded for fresh adjudication after detailed consideration of both issues.

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Issues: Whether the two products were classifiable as Ayurvedic medicaments eligible for exemption, and whether the demand was hit by limitation under Section 11A of the Central Excise Act, 1944.

Analysis: The adjudicating authority had reached conclusions on the nature of the products without discussing the rival evidence placed by both sides, including the material relied upon in the show cause notice and the certificates produced by the appellants. No finding was recorded on the plea that the appellants acted under a bona fide belief that the products were Ayurvedic medicines, which was relevant to the period of limitation.

Outcome: The impugned order was set aside and the matter was remanded to the adjudicating authority for fresh decision after detailed consideration of the issues.

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