Ayurvedic medicament classification under amended tariff turns on authoritative formula compliance, not the old common parlance test.

The amended Central Excise Tariff Heading 3003.31 required classification of medicaments manufactured exclusively in accordance with formulae in authoritative Ayurvedic books listed in the First Schedule to the Drugs and Cosmetics Act, 1940. Dant Manjan Lal was manufactured according to the formula in Ayurved Sar Sangraha, which was included in that Schedule, so the revised entry governed its classification. The earlier Supreme Court approach under the pre-amendment tariff, based on common trade understanding and therapeutic or prophylactic use, did not control the amended regime. On that basis, the product was classifiable as an ayurvedic medicament under Heading 30.03 and not as a tooth powder for oral hygiene.

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Issues: Whether the product "Dant Manjan Lal" was classifiable as an ayurvedic medicament under Heading 3003.31 of the Central Excise Tariff after the 1996 amendment, or as a tooth powder for oral hygiene.

Analysis: The earlier decision of the Tribunal and the Supreme Court had proceeded on the pre-amendment tariff entry and on the ordinary test whether the product was a medicament in common trade understanding, with therapeutic or prophylactic properties and prescription for a limited period for a specific disease. The amended entry in Heading 3003.31, however, specifically covers medicaments manufactured exclusively in accordance with the formulae described in authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940. The product was manufactured in accordance with the formula in Ayurved Sar Sangraha, which stood included in that Schedule. The amended tariff was intended to operate in harmony with the statutory definition under the Drugs and Cosmetics Act, 1940, and the earlier Supreme Court ruling under the old tariff could not control the classification under the revised entry. The departmental view ignored the significance of the amendment.

Conclusion: The product was classifiable under Heading 30.03 as an ayurvedic medicament and not as a tooth powder for oral hygiene.

Final Conclusion: The impugned classification and consequential duty and penalty were unsustainable, and the assessee succeeded on the tariff classification question.

Ratio Decidendi: Where a tariff entry is amended to classify medicaments manufactured exclusively according to authoritative ayurvedic formulae, the classification must be decided under the amended entry and not solely by the pre-amendment common parlance test applied to the earlier tariff regime.

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