2006 (12) TMI 24 - AT - Central Excise

Appellate Tribunal upholds 'Tiger Balm' classification as Ayurvedic medicine, rejecting Revenue's arguments

The Appellate Tribunal CESTAT, Mumbai upheld the classification of 'Tiger Balm' under CET sub-heading 3003.39 as an Ayurvedic medicine, rejecting the ... Classification – Appellant contended that the product(Tiger Balm) manufactured by him classified under CET sub-heading 3003.39 as Ayurvedic medicament but opposed by the commissioner – After considering the fact decision made in favour in of appellant Issues: Classification of 'Tiger Balm' under CET sub-headings 3003.39 and 3003.10.The judgment by the Appellate Tribunal CESTAT, Mumbai dealt with the classification issue of 'Tiger Balm' manufactured by the respondents under CET sub-headings 3003.39 and 3003.10. The dispute revolved around whether the product should be classified as an Ayurvedic medicament under 3003.39 attracting 8% duty, as claimed by the manufacturers and upheld by the Commissioner, or as P or P medicaments under 3003.10 attracting 15% duty for a certain period and 16% thereafter, as contended by the Revenue for the period from December 1996 to February 2000.The Revenue argued that the product should not be considered Ayurvedic as it originated from Chinese traditional medicine, with formulations, brand name, and goodwill licensed from a Singapore company. The Revenue highlighted that the manufacturing agreement showed the technical knowledge was with the Singapore company, and the product was marketed globally in a Chinese herbal medicine manner, not Ayurvedic. However, the Tribunal noted that the ingredients used were mentioned in authoritative texts specified in the Drugs and Cosmetics Act, 1940, and were natural products or extracts. The Tribunal referred to legal precedents, including a Larger Bench decision and an Apex Court decision, to establish that a medicament can be under a patented formula even if not as per Ayurvedic texts. The Tribunal also cited previous judgments to support that a product known in Chinese culture does not disqualify it as Ayurvedic. The burden of proof was on the Revenue to show the product was not popularly known as Ayurvedic, which they failed to do.Consequently, the Tribunal upheld the classification of 'Tiger Balm' under CET sub-heading 3003.39 as an Ayurvedic medicine, rejecting the Revenue's contentions. As the order was upheld based on the classification, the Tribunal did not address the limitation issue raised in the cross-objection. The judgment concluded with the appeal being rejected, and the cross-objection disposed of accordingly.