2023 (9) TMI 567 - AT - Central Excise

Tribunal remands case for reclassification of product based on Ayurvedic texts.

LYKA LABS LIMITED Versus C.C.E. & S.T. -SURAT-II

The Tribunal remanded the case to the adjudicating authority for a fresh order, highlighting the necessity for a thorough analysis of the product's ... Classification of goods manufactured - Sensur Rubefacient and Herbyl Skin Ointment - ayurvedic medicament classifiable under 3003.30 or P&P medicament (other than medicament) classifiable under 3003.39 to the first schedule to the Central Excise Tariff 1985? - appellant have used some ingredients such as Boric acid, Lanoline Anhydrous, White Soft Paraffin, Essence of Jasmine, Salicyclic Acid, and Bees wax which are not the Ayurvedic ingredients - HELD THAT:- In the present case some of the ingredients such as Boric acid, Lanoline Anhydrous, White Soft Paraffin, Essence of Jasmine, Salicyclic Acid, and Bees wax have been used were claimed by the department as other than ayurvedic ingredients. The claim of the appellant is that firstly these are not active ingredients, whereas the same are in the nature of preservatives, excipients, binding agent, career or vehicle or filler etc., therefore, even though these product are other than ayurvedic ingredients, if the active ingredient are ayurvedic still the medicament is classifiable as ayurvedic medicament. All the said ingredients whether are active ingredient or otherwise has not been examined properly. Moreover, the appellant’s claim that even these ingredients are also find place in Ayurvedic, this fact is also not examined properly by the adjudicating authority. Since the entire case of the department is based on the contention that some of the ingredients which as per the appellant are non-active ingredient are other than Ayurvedic, the details of ingredients whether they are active or non-active and whether they are also covered under Ayurvedic authoritative books is very important to examine. Matter remanded to the adjudicating authority for passing a fresh order. Issues involved: Classification of product as Ayurvedic medicament under 3003.30 or P&P medicament under 3003.39 in Central Excise Tariff 1985.Detailed Judgment:Issue 1: Classification of productThe appellant claimed that the product, Sensur Rubefacient and Herbyl Skin Ointment, is an Ayurvedic medicine as it is manufactured using Ayurvedic ingredients specified in Ayurveda Grantha and is sold as Ayurvedic medicine with the Drug Authority's license. They argued that the presence of non-active ingredients like preservatives does not change the classification, citing various judgments in support. The Department contended that the use of non-Ayurvedic ingredients like Boric acid and Lanoline Anhydrous makes the product non-Ayurvedic. The Tribunal observed that to classify a product as Ayurvedic medicament, it should be made from Ayurvedic ingredients and sold as Ayurvedic medicine. The Tribunal agreed with the appellant's argument that even if non-active ingredients are present, as long as the active ingredient is Ayurvedic, the product can be classified as Ayurvedic medicament. However, the Tribunal found that a proper examination of the ingredients and their presence in Ayurvedic texts was lacking. Therefore, the matter was remanded to the adjudicating authority for a fresh order, considering the Supreme Court judgments cited by the appellant.Conclusion:The Tribunal remanded the matter to the adjudicating authority for a fresh order, emphasizing the need for a detailed examination of the ingredients used in the product and their presence in Ayurvedic texts to determine the correct classification as Ayurvedic or P&P medicament under the Central Excise Tariff.