2003 (1) TMI 103 - SC - Central Excise

Lip salve classification: medicament (30.03) vs skin-care prep (33.04); treated as protective lip care, appeal dismissed

The dominant issue was whether 'lip salve' was classifiable as a medicament under Heading 30.03 or as a skin-care preparation under Heading 33.04 of the ... Classification of product 'Lip Salve' - Whether manufactured product with trade name 'Lip Salve' is classifiable for payment of excise duty under Heading 33.04 of the Central Excise Tariff Act, 1985 as 'a preparation for care of skin' and not as a 'medicament' under Heading 30.03 of the Act? - The minority view expressed by one Member of the Tribunal in favour of the appellant is that its manufactured product 'Lip Salve' is classifiable as 'medicament' under Chapter 30.03 of the Act although the sub-classification is required to be re-determined by remanding the case to the Assistant Collector of Central Excise. Held that:- It is not disputed that the product 'Lip Salve' is used for the care of the lips. It is a product essentially for 'care of skin' and not for 'cure of skin'. It is, therefore, classifiable as a skin care cream and not a medicament. From the nature of the product and the use to which it is put, we do not find that the claim of the appellant is acceptable that it is primarily for therapeutic use. What we find from the material produced before the Tribunal is that essentially the product is a protective/preventive preparation for chapping of lips. It is not a curative product may be that incidentally on cracked and chapped lips, it has some curative effect. It is also not denied that the product 'Lip Salve' is not suitable for use only for soldiers operating in high altitude areas but it is of use for every one as protection from dry, cold weather or sun rays. The product, therefore, essentially is protective of skin of lip. It is lip care product and not a 'medicament'. It is neither prescribed by any doctor nor obtainable from the Chemist or Pharmaceutical shops in the market. We find ourselves in the agreement with the majority opinion of the Tribunal that the product 'Lip Salve' is a kind of 'barrier cream' or a protective cream against skin irritants. It, therefore, clearly falls under entry 33.04 and conforms to the description 'preparation of the care of the skin other than medicaments'. The learned Counsel of the appellant has not been able to persuade us to take a different view from the one taken in the majority opinion of the Tribunal. We confirm that the product 'Lip Salve' is essentially a preparation for protection of lips and skin and is not a 'medicament'. Such preparations which have a subsidiary curative or prophylactic value clearly fall under entry 33.03 to 33.07 as per Note No. 2 under Chapter 33. The product clearly is covered by entry 33.04 read with Note No. 5 of Chapter 33, it essentially being a preparation for protection of lips or skin. Appeal dismissed. Issues:Classification of product 'Lip Salve' for excise duty under Heading 33.04 as 'a preparation for care of skin' or under Heading 30.03 as a 'medicament'.Analysis:The case involved two appeals under Section 35L(b) of the Central Excises & Salt Act, 1944 challenging the Tribunal's judgment classifying 'Lip Salve' for excise duty. The majority opinion held it to be a skin care product under Heading 33.04, while the minority view favored classification as a 'medicament' under Chapter 30.03, subject to re-determination by the Assistant Collector of Central Excise.The appellant argued that 'Lip Salve' is a medicament for treating sore, inflamed, roughened, and cracked lips, supplied exclusively to the Defence Department for military personnel in high altitude areas. The product's chemical composition, marketing, and common parlance meaning were scrutinized. However, the Revenue contended that it is a protective cream for chapping of lips, not limited to high altitude areas, used for skin protection against natural factors like cold and weather conditions.The Court emphasized applying the 'commercial parlance theory' for classification, considering the popular meaning attached to the product. It cited precedents like the Dant Manjan Lal case and the Selsun case to illustrate the distinction between medicinal preparations and cosmetic products. The appellant relied on the B.P.L Pharmaceuticals case to argue for 'Lip Salve' as a medicament, specially prepared for defense personnel in harsh conditions.Examining the pharmaceutical and medical literature, the Court concluded that 'Lip Salve' is a skin care cream, not a medicament, primarily used for skin protection. It noted that the product is not curative but preventive, suitable for everyone, and not exclusively for military personnel in high altitude areas. The appellant's classification request under Chapter 30 as a pharmaceutical product was rejected based on the Schedule's interpretation rules.The Court analyzed Chapter 33 notes, particularly Note No. 5, which lists products like beauty creams and barrier creams, falling under entry 33.04 for skin care preparations. Considering the product's nature as a protective cream against skin irritants, the Court affirmed the Tribunal's majority opinion, dismissing the appeals. The product was classified under entry 33.04 as a preparation for skin care, not a medicament under Chapter 30.03.