2016 (11) TMI 1274 - AT - Central Excise

Tribunal reclassifies 'Cetraben Cream' as medicament, overturning cosmetics classification.

The Tribunal set aside the adjudicating authority's decision to classify 'Cetraben Cream' as cosmetics, ruling in favor of the appellant's classification ... Classification of goods as medicament or cosmetic - Classification governed by treatment under drug regulatory licence - Preclusive effect of earlier appellate order in same proceedings - Use by consumer not determinative where regulatory classification existsClassification of goods as medicament or cosmetic - Classification governed by treatment under drug regulatory licence - Use by consumer not determinative where regulatory classification exists - Preclusive effect of earlier appellate order in same proceedings - Whether the product 'Cetraben Cream' is classifiable as a medicament (chapter 30) or as a cosmetic (chapter 33) for excise purposes - HELD THAT: - The Tribunal held that the product is classifiable as a medicament. The adjudicating authority had classified it as a cosmetic, but the first appellate authority in the assessee's own subsequent proceedings recorded that the ingredients are specified in pharmacopoeia and that medical practitioners treat the product as a medicament; that order dated 22/03/2013 has attained finality. The Tribunal applied the principle recently affirmed by the Supreme Court in Hindustan Lever Ltd. that where a product is manufactured under a licence issued by drug authorities and treated as a medicament by such authorities, classification under the chapter for medicaments is appropriate; mere healing properties or consumer usage as a cosmetic does not override regulatory classification. On these authoritative and fact-linked grounds the impugned order classifying the product as a cosmetic was found unsustainable. [Paras 2, 3, 5, 6, 7]Impugned order set aside; product held classifiable as a medicament and appeal allowed.Final Conclusion: The Tribunal, applying the appellate finding in the assessee's own case and the Supreme Court's ratio in Hindustan Lever Ltd., allowed the appeal, set aside the order classifying the product as a cosmetic and held the product to be classifiable as a medicament. Issues: Classification of product as medicament or cosmetics.In this case, the appellant, engaged in the manufacture of excisable goods, claimed a product, 'Cetraben Cream,' as a medicament, while the Revenue contended it should be classified as cosmetics. The adjudicating authority classified the product as cosmetics, leading to a dispute. The appellant argued that the product was classified as a medicament in a previous case, supported by a letter from the Drug Control of India. The appellant cited various Supreme Court judgments to support their claim. The Departmental Representative argued that the product should be classified based on consumer usage, asserting it was used as a cosmetic preparation. The Tribunal noted that the first appellate authority had previously classified the product as a medicament in the appellant's case, a decision that had been accepted. The Tribunal also referenced a case involving Hindustan Lever Ltd, where the product was classified under chapter 30 as a medicament. The Tribunal held that based on the authoritative judicial pronouncements and the previous classification of the product as a medicament, the impugned order was unsustainable and set it aside, allowing the appeal.This judgment primarily revolves around the classification of the product, 'Cetraben Cream,' as either a medicament or a cosmetic. The appellant claimed it to be a medicament, while the Revenue argued for its classification as cosmetics. The key issue was whether the product should be classified based on its healing properties or consumer usage. The Tribunal considered the previous classification in the appellant's case, supported by the Drug Control of India's letter, and various Supreme Court judgments favoring classification as a medicament. The Departmental Representative's argument based on consumer usage was countered by the Tribunal's reference to a previous case involving Hindustan Lever Ltd, where a similar product was classified as a medicament under chapter 30. The Tribunal ultimately relied on the previous classification and authoritative judicial pronouncements to set aside the impugned order and allow the appeal.