2018 (1) TMI 707 - AT - Central Excise

Classification of Ayurvedic products as medicinal under Chapter 30 upheld by Tribunal

The Tribunal ruled in favor of the appellant, setting aside the Commissioner's order and allowing the appeal. The products in question, classified as ... Classification of goods - Ayurvedic medicinal product - whether classified under CETH 30049011 as medicaments of Ayurvedic system or under Chapter 33 as perfumes and toilet waters etc.? - Held that: - the overall manufacturing process product content and the marketing as seen from the product literature make it clear that these products cannot be considered as perfumes and toilet waters. In fact, three of the products contained other than simple hydro distillates in the form of soluble ashes of Ayurvedic origin - even the products which are based on distillates further formulation as per prescribed dosages as per formula in authoritative books as per Indian Drugs & Cosmetic Act, 1940 has been carried out. The ingredients are as per API Standards. - appeal allowed. Issues: Classification of Ayurvedic medicinal products under Central Excise ActAnalysis:1. The appeal challenged the order of the Commissioner of Central Excise, Delhi regarding the classification of Ayurvedic medicinal products under CETH 30049011 as medicaments of Ayurvedic system for retail sale, opposed by the Revenue proposing classification under Chapter 33 as perfumes and toilet waters.2. The appellant argued that the disputed products, made as per approved Ayurvedic formulations, are specifically labeled for cure/relief, not as perfumes or toilet waters. The products are not simple aqueous solutions but are manufactured based on Ayurvedic texts for medicinal use, with clear indications and dosages, distinct from perfumes and toilet waters.3. The Revenue contended that one of the products, ark gulab, is rose water classified under Chapter 33, along with similar products based on their manufacturing source as aqueous solutions excluded from Chapter 33.4. The Tribunal, after reviewing the product literature, found that all products were labeled as Ayurvedic classical medicine or essence of Ayurveda, with specific usage and intended for cure or relief, not as perfumes or toilet waters. The manufacturing process, content, and marketing indicated in the literature supported this classification, with some products containing soluble ashes of Ayurvedic origin.5. The Tribunal noted that the appellant's reliance on a previous Tribunal decision and Supreme Court affirmation was appropriate, emphasizing the formulation of the product and marketing as medicine, leading to a classification under Chapter 30 instead of Chapter 33.6. The products, based on distillates, underwent further formulation as per prescribed dosages in authoritative books under the Indian Drugs & Cosmetic Act, 1940, meeting API Standards.7. Consequently, the Tribunal found no merit in the impugned order, setting it aside and allowing the appeal.