Ayurvedic medicine classification turns on exclusive manufacture by authoritative formula and contemporaneous records, not equivocal departmental inference.

Manufacture of Chyawanprash (Special) was treated as the decisive test for classification under the Ayurvedic medicine heading, which applies only where the product is made exclusively according to formulae in an authoritative book and sold under the specified name. Contemporaneous records such as batch cards, production records, invoices, labels, input ledgers, and employee statements supported manufacture in accordance with Ayurved Sar Sangraha. The alleged correction in the drug approval list, the alternative approved entry, and a test report relating to an export sample did not displace that evidence. On that basis, the product remained classifiable as an Ayurvedic medicine and not as a proprietary drug.

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Issues: Whether the product "Chyawanprash (Special)" was classifiable under sub-heading 3003.31 as an Ayurvedic medicine manufactured exclusively in accordance with the formulae described in an authoritative book specified in the First Schedule to the Drugs and Cosmetics Act, 1940, or under sub-heading 3003.39 as a proprietary drug.

Analysis: The decisive test was whether the product was manufactured exclusively in accordance with the formulae in the authoritative book and sold under the name specified therein. The records maintained by the manufacturer, including batch cards, production records, invoices, labels, and input ledgers, consistently showed manufacture of "Chyawanprash (Special)" as per the formula in Ayurved Sar Sangraha. The alleged cancellation or correction in the drug approval list did not displace the substantive evidence, especially when the drug authorities had been informed of the formulation, no objection had been raised over the years, and the licence stood renewed. The reliance on another approved entry in the list was held insufficient to show manufacture of a different product, and the test report relied upon by the department was found to relate to an export sample, not to the impugned domestic product. The statements of employees and the contemporaneous records supported the claim of manufacture according to the prescribed Ayurvedic formula.

Conclusion: The product was held to be classifiable under sub-heading 3003.31 and not under sub-heading 3003.39.

Final Conclusion: The demand, interest, and penalty could not survive, and the appeal was allowed with consequential relief.

Ratio Decidendi: Where contemporaneous records and supporting evidence establish that a medicinal preparation is manufactured exclusively according to the formulae in an authoritative book specified in the First Schedule to the Drugs and Cosmetics Act, 1940, it remains classifiable under the corresponding Ayurvedic heading and cannot be denied that classification on the basis of equivocal departmental inferences or an unconnected sample test.

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