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of <h1>Certain products held to be medicaments under Chapter 30 (Headings Note 3003.20/3003.30); three items classified as cosmetics under Chapter 33.04</h1> The SC held that several appellant products qualified as medicaments under Chapter 30 rather than cosmetics under Chapter 33: items at serial nos. 1, 2, ... Classification of products as cosmetics under Chapter 33 or as medicaments under Chapter 30 - common parlance test - Whether the products manufactured by the appellant fall within the category of medicaments or cosmetics? Held that:- On the basis of Note 2 of Chapter 33, it was argued that even if a product had some curative or prophylactic value, it will still be cosmetic. We cannot accept this argument. The learned counsel has overlooked the use of the word 'subsidiary' in the said note from which it follows that a subsidiary curative or prophylactic use will not convert a cosmetic into medicament. We have tried to illustrate this by giving the example of bald man treating his baldness by use of Ayurvedic product. The curative use of the product is primary in that example and not subsidiary. The subsidiary result is improvement in appearance. Therefore, in our view, Note 2 to Chapter 33 does not help the respondent. Rather Note 5 to the said Chapter, makes it clear that the products which fall under Heading 33.04 are primarily beauty or make up preparations. They may incidentally help in protection against skin irritants. They may also help as a skin tonic, yet they are cosmetics because skill protection is subsidiary benefit. The Revenue has failed to make out any case in support of its stand that all the products in question fall under Chapter 33 i.e. under Heading Note 33.04. The products at Serial Nos. 1, 2, 3, 4, 7, 9, 10 & 11 viz. Puma Neem Facial Pack (Neemal), Puma Anti-Pimple Herbal Powder (Pimplex), Puma Herbal Facial Pack (Herbaucare), Puma Herbal remedy for Facial Blemishes, Puma Hair Tonic Powder (Sukeshi), Puma Anti-Dandruff Oil (Dandika), Puma Shishu Rakshan Tel and Puma Neem Tulsi are clearly medicinal products and are intended to treat certain medical conditions of the human body and therefore, in view of the above tests, are liable to be classified as medicaments falling under Chapter 30 and Note 3003.20/3003.30. Items at Serial Nos. 5, 6 and 8 viz. Puma Herbal Massage Oil, Puma Herbal Massage Oil for Women and Puma Scalp Tonic Powder (Scalpton) however do not appear to be of any medicinal property and it is difficult to classify them under the head of medicament. In fact the learned counsel for appellant conceded that these three items do not qualify to be treated as medicaments. Therefore, the same will be liable to be classified as 'cosmetic' under Chapter head 33.04. Regarding these 3 items the matter will have to go to the Assistant Collector for quantification of the duty for the relevant period. Subject to this, the appeals are allowed. Issues Involved:1. Classification of products as medicaments or cosmetics under the Central Excise Tariff Act, 1985.2. Application of the twin test for determining product classification.3. Evaluation of evidence and burden of proof regarding product classification.4. Relevance of authoritative opinions and previous judgments in classification disputes.Detailed Analysis:1. Classification of Products:The core issue was whether the products manufactured by the appellant should be classified as medicaments under Chapter 30 or as cosmetics under Chapter 33 of the Central Excise Tariff Act, 1985. The classification impacts the rate of excise duty, with medicaments attracting nil duty and cosmetics attracting a higher duty.2. Application of the Twin Test:The judgment emphasized the twin test for classification:- Common Parlance Test: Whether the product is commonly understood as a medicament. If a product is used specifically for treating ailments and not for regular use, it is considered a medicament.- Ayurvedic Ingredients Test: Whether the ingredients are mentioned in authoritative Ayurvedic texts.The court noted that both tests are recognized by the Central Board of Excise and Customs and should be applied to determine the classification.3. Evaluation of Evidence and Burden of Proof:The appellant provided substantial evidence, including Ayurvedic texts, certificates from doctors, and opinions from Ayurvedic practitioners, to support the classification of their products as medicaments. The Collector (Appeals) relied on an opinion from the Directorate of Ayurveda, Maharashtra, which confirmed that the ingredients used in the products were described in Ayurvedic texts and were meant for treating skin diseases. The court highlighted that the burden of proving the correct classification lies with the revenue, which failed to provide any evidence to rebut the appellant's claims.4. Relevance of Authoritative Opinions and Previous Judgments:The court referenced several previous judgments where products with Ayurvedic ingredients were classified as medicaments. For instance:- C.C.E. v. Sharma Chemical Works: The burden of proof lies with the revenue to show that a product is not a medicament.- C.C.E. v. Pandit D. P. Sharma: Emphasized the common parlance test for classification.- Naturalle Health Product (P) Ltd. v. C.C.E.: Followed the twin test for classification.- Amrutanjan v. C.C.E.: Held that products with medicinal ingredients, even in small quantities, should be classified as medicaments.- BPL Pharmaceuticals v. C.C.E.: Classified a medicated shampoo as a medicament based on its therapeutic use.- Muller & Phipps (India) Ltd. v. C.C.E.: Classified Johnson Prickly Heat Powder as a medicament.- Dabur (India) Ltd. v. C.C.E.: Classified products with Ayurvedic ingredients as medicaments.Conclusion:The court concluded that most of the appellant's products should be classified as medicaments under Chapter 30, except for Puma Herbal Massage Oil, Puma Herbal Massage Oil for Women, and Puma Scalp Tonic Powder, which were classified as cosmetics under Chapter 33. The appeals were allowed for the products classified as medicaments, and the matter was remanded to the Assistant Collector for quantification of duty for the products classified as cosmetics. The appeals in Civil Appeals No. 1414-1416/2004 were dismissed.Products Classified as Medicaments:- Puma Neem Facial Pack (Neemal)- Puma Anti-Pimple Herbal Powder (Pimplex)- Puma Herbal Facial Pack (Herbaucare)- Puma Herbal remedy for Facial Blemishes- Puma Hair Tonic Powder (Sukeshi)- Puma Anti-Dandruff Oil (Dandika)- Puma Shishu Rakshan Tel- Puma Neem TulsiProducts Classified as Cosmetics:- Puma Herbal Massage Oil- Puma Herbal Massage Oil for Women- Puma Scalp Tonic Powder (Scalpton)
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