2005 (8) TMI 8 - AT - Central Excise

Appeal success: Items classified as Ayurvedic Medicaments instead of Cosmetics, providing relief to appellants.

The Tribunal allowed the appeal, classifying the items as Ayurvedic Medicaments under Tariff Heading 3003.30 instead of Cosmetics under Tariff Heading ... Classification of Ayurvedic Medicaments - Kaveri fairness milk cream, Pankaja Kasthuri and Amrutha Kasthuri - manufactured in terms of ayurvedic texts using ingredients mentioned therein... Issues: Classification of products as Ayurvedic Medicaments or Cosmetics under Tariff Heading 3304.00In the present case, the main issue revolves around the classification of the items Kaveri Fairness Milk Cream, Pankaja Kasthuri, and Amrutha Kasthuri. The appellants challenged the Order-in-Appeal that classified these items under Tariff Heading 3304.00 as Cosmetics, contending that they should be classified as Ayurvedic Medicaments under Tariff Heading 3003.30. The key question is whether these items are used for treatment of skin diseases or for beautification, determining their classification as either Ayurvedic Medicaments or Cosmetics.Analysis:The Appellate Tribunal, after hearing both sides, considered the evidence presented by the appellants. It was established that the appellants had obtained a Drug Licence from the Drug Controller for manufacturing the items as Ayurvedic Medicaments. The items in question were claimed to be used for the treatment of skin diseases such as Periorbital Melanosis, Melasma, and fungal infections between the thighs. The appellants argued that these items were manufactured in accordance with Ayurvedic texts and had therapeutic, prophylactic, or curative value. The Tribunal noted that the ingredients were mentioned in Ayurvedic texts and the items were meant for treating various skin conditions.The Tribunal referred to previous judgments, including a Supreme Court case (CCE Vs. Sharma Chemical Works), which held that items manufactured in accordance with Ayurvedic texts and having therapeutic value should be treated as Medicaments. The Tribunal also cited another Supreme Court case (Naturalle Health Products (P) Ltd. Vs. CCE, Hyderabad) where it was established that if all ingredients are mentioned in authoritative Ayurvedic texts and the products are manufactured with a drug licence, they should be considered Ayurvedic medicines.Additionally, the Tribunal mentioned a case (Herbal Products Vs. CCE, Calicut) where the ingredients were mentioned in Ayurvedic texts, and the Deputy Drugs Controller accepted the item as a Medicament. The Tribunal upheld the classification of the items as Medicaments rather than Cosmetics. Considering these precedents and the evidence presented by the appellants regarding the therapeutic value of the items in treating various skin conditions, the Tribunal accepted the claim to classify the items as Ayurvedic Medicaments under Tariff Heading 3003.30 of the Central Excise Tariff. As a result, the appeal was allowed, providing consequential relief to the appellants.In conclusion, the Tribunal's decision was based on the evidence of therapeutic value presented by the appellants, compliance with Ayurvedic texts, and the precedents established in previous judgments. The items were classified as Ayurvedic Medicaments rather than Cosmetics, in line with the relevant provisions and legal interpretations.