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of <h1>Tribunal Decision Upheld: 'Nizral Shampoo' Classified as Pharmaceutical Product</h1> <h3>Commissioner of Central Excise, Hyderabad Versus M/s Sarvotham Care Ltd.</h3> Commissioner of Central Excise, Hyderabad Versus M/s Sarvotham Care Ltd. - 2015 (322) E.L.T. 575 (SC) Issues Involved:1. Classification of 'Ketoconazole Shampoo' and 'Nizral Shampoo' for central excise duty purposes.2. Determination of whether the product is a pharmaceutical product or a cosmetic/toilet preparation.3. Interpretation of relevant Central Excise Tariff Act provisions and Harmonised System Committee guidelines.4. Examination of the product's predominant use and essential characteristics.5. Consideration of previous judicial precedents and tribunal decisions.Detailed Analysis:1. Classification of 'Ketoconazole Shampoo' and 'Nizral Shampoo':The primary issue is the classification of 'Ketoconazole Shampoo' and 'Nizral Shampoo' for central excise duty purposes. The respondent classified the product under CSH 3003.10, claiming it as a medicine, while the appellant/Revenue classified it under CSH 3305.99, viewing it as a 'preparation for use on hair.'2. Determination of whether the product is a pharmaceutical product or a cosmetic/toilet preparation:Chapter 30 covers pharmaceuticals, including 'patent or proprietary medicaments,' while Chapter 33 includes 'Essential Oils and Resinoids; Perfumery, Cosmetic or Toilet Preparation,' with CSH 3305.99 specifically for 'preparations for use on the hair.' The Revenue argued that the product is primarily a shampoo with ancillary therapeutic properties due to the presence of 2% 'Ketoconazole,' thus classifying it under Chapter 33. The respondent contended that the product is medicinal, used to treat specific scalp disorders, and should be classified under Chapter 30.3. Interpretation of relevant Central Excise Tariff Act provisions and Harmonised System Committee guidelines:The Revenue relied on Chapter Note (6) to Chapter 33, which includes shampoos with therapeutic properties, and HSC guidelines to support their classification. They cited previous judgments emphasizing the importance of HSC criteria in classification disputes.4. Examination of the product's predominant use and essential characteristics:The Tribunal found substantial evidence showing the product's medicinal use, such as treatment of scalp disorders and sale under medical prescription. The product's literature, warnings, and limited use period indicated its primary therapeutic nature. The Tribunal concluded that the product's essential characteristics are medicinal, classifying it under CSH 3003.10.5. Consideration of previous judicial precedents and tribunal decisions:The Tribunal referred to the Supreme Court's judgment in B.P.L. Pharmaceuticals Ltd. v. CCE, Vadodra, which dealt with a similar issue of classifying a product with therapeutic properties. The Court emphasized the product's medicinal use, manufacturing under a drug license, and sale under medical prescription. The Tribunal also considered other relevant judgments and found that the product's primary therapeutic use justified its classification as a pharmaceutical product.Conclusion:The Supreme Court upheld the Tribunal's decision, agreeing that 'Nizral Shampoo' is classifiable under CSH 3003.10 as a pharmaceutical product. The Court emphasized the product's essential medicinal characteristics, therapeutic use, and sale under medical prescription. The appeal by the Revenue was dismissed, and the respondent's classification was affirmed. The Court also quashed the High Court's order in a related appeal, reinforcing the classification as a pharmaceutical product and not a shampoo.
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