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Issues: (i) Whether the department could reopen and reclassify the products as cosmetics or toilet preparations after the earlier classification of the same products had attained finality; (ii) whether the products remained classifiable as Ayurvedic medicaments under sub-heading 3003.31 of the Central Excise Tariff Act, 1985.
Issue (i): Whether the department could reopen and reclassify the products as cosmetics or toilet preparations after the earlier classification of the same products had attained finality.
Analysis: The earlier High Court decision, as affirmed by the Supreme Court, had accepted the products as Ayurvedic medicines and had attained finality. That determination could not be ignored merely because the tariff regime changed or because a later view on similar goods was expressed in another matter. The department was therefore not entitled to reagitate the very question whether the products were cosmetics or toilet preparations.
Conclusion: The attempt to reopen classification on the basis that the products were cosmetics or toilet preparations was impermissible and was rejected.
Issue (ii): Whether the products remained classifiable as Ayurvedic medicaments under sub-heading 3003.31 of the Central Excise Tariff Act, 1985.
Analysis: The products were shown to be manufactured in accordance with authoritative Ayurvedic texts, and the additional ingredients were certified to have no therapeutic value. The relevant circular position also supported the view that the presence of preservatives, inert excipients, or binding agents without therapeutic value would not take the goods out of Ayurvedic classification. On the materials before it, the rival plea for an alternative classification was not available for acceptance at that stage.
Conclusion: The products were correctly classifiable under sub-heading 3003.31 as Ayurvedic medicaments.
Final Conclusion: The impugned appellate order was upheld and the Revenue's challenge to the classification failed, leaving the assessee's classification intact.
Ratio Decidendi: A classification that has attained finality in respect of the same goods cannot be reopened as cosmetics or toilet preparations, and Ayurvedic goods manufactured in accordance with authoritative texts do not cease to be Ayurvedic medicaments merely because inert ingredients without therapeutic value are added.
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