Barrier cream exemption under excise notification upheld where product description and licence matched the statutory requirement.

An exemption under Notification No. 393/86-C.E. applied to barrier creams falling under sub-heading 3304.00 only when manufactured under and in accordance with a licence issued under the Drugs and Cosmetics Act, 1940. The product was treated as a barrier cream because it was classified under Heading 3304, described by the appellant in its own materials and licence application as a barrier cream, and licensed as "Oil of Olay (Barrier Cream)". The Court found that the label and product description matched the accepted description of a barrier cream, and that the addition of beauty-cream characteristics did not take it outside the exemption.

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Issues: Whether the product in question was a barrier cream manufactured under a licence issued under the Drugs and Cosmetics Act, 1940 and therefore entitled to exemption under Notification No. 393/86-C.E. dated 22-8-1986.

Analysis: The notification granted exemption to barrier creams falling under sub-heading 3304.00, subject to manufacture under and in accordance with a licence issued for that purpose under the Drugs and Cosmetics Act, 1940. The product was classified under Heading 3304, was described by the appellant itself as a barrier cream in its classification materials and licence application, and the licence issued to it referred to the product as "Oil of Olay (Barrier Cream)". The label and product description were found consistent with the accepted description of barrier creams, and the mere addition of beauty-cream characteristics did not exclude the product from being a barrier cream.

Conclusion: The product was held to be a barrier cream manufactured under the requisite licence, and the appellant was entitled to the exemption under Notification No. 393/86-C.E. dated 22-8-1986.

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