Tribunal Classifies Products as Ayurvedic Medicine, Emphasizes Importance of Clear Labeling

The Tribunal ruled in favor of the appellant, classifying the products as Ayurvedic Medicine based on the labels, ingredients, and usage instructions indicating their medicinal nature. The decision overturned the lower authorities' classification as Cosmetics, emphasizing the importance of clear labeling and authenticity in determining product classification. The Tribunal found the products aligned with the definition of Ayurvedic Medicine, following a precedent that favored similar classifications in previous cases.

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Issues involved: Classification of product as Ayurvedic Medicine or Cosmetics

Analysis:
- The issue in this case revolves around the classification of the product manufactured by the appellant. The appellant classified the goods as P&P Ayurvedic Medicine, while the Revenue argued that they should be classified as Cosmetics under Chapter 33. Lower authorities deemed the products as Cosmetics due to their usage for various cosmetic purposes like scalp irritation, hair loss, lice treatment, hair washing, facial spots, and skin complexion improvement. The labels on the products did not provide clear usage instructions, leading to the classification as cosmetics by the lower authorities.

- Upon reviewing the labels attached to the appeal memorandum, it was found that the products were labeled as ayurvedic medicine as per the manufacturing license issued by the Food and Drug Authorities. The ingredients and content of the products contained ayurvedic substances mentioned in authentic ayurvedic books, with specific instructions for usage indicating their medicinal nature. The labels clearly indicated that the products were intended for medicinal use in ayurveda.

- The Tribunal noted that the issue at hand was similar to a decision by the apex court in CCE vs. Ishaan Research Lab (P) Ltd. 2008, which favored the appellant's classification as ayurvedic medicine. The Revenue attempted to rely on the decision in CCE vs. Ciens Laboratories 2013 and CCE vs. Shree Baidyanath Ayurved Bhawan Ltd. 2009, arguing that the primary function of the items was care rather than cure and that the common parlance test should determine classification. However, the Tribunal found that the products were indeed ayurvedic medicine based on the labels and the absence of contrary evidence from the Revenue.

- Consequently, the Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal in favor of the appellant. The decision was based on the clear indication on the labels, the nature of the products as ayurvedic medicine, and the lack of evidence contradicting the appellant's classification.

- The judgment highlights the importance of proper labeling, ingredients, and usage instructions in determining the classification of products as either Ayurvedic Medicine or Cosmetics, emphasizing the need for clarity and authenticity in such cases.

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