Ayurvedic medicament classification turns on main therapeutic purpose, while concealment can justify extended limitation and cum-duty recomputation.

Classification under the Central Excise Tariff turned on the product's main purpose: goods with therapeutic or prophylactic use as their primary function were treated as Ayurvedic medicaments under Chapter 30, while preparations meant principally for beauty, skin care or hair care fell under Chapter 33 even if they contained Ayurvedic or subsidiary medicinal ingredients. On that test, products for cracked feet, acne and dandruff were placed in Chapter 30, while skin-care and hair-nourishing products were placed in Chapter 33; two products were remanded for fresh adjudication because their classification had changed from the show-cause notice. The extended period of limitation was applied for non-disclosure of manufacture and clearances, and duty was required to be recomputed on a cum-duty basis with exemption claims and arithmetical computation to be re-examined.

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Issues: (i) Whether the impugned products were classifiable as Ayurvedic medicaments under Chapter 30 or as cosmetics and personal care preparations under Chapter 33 of the Central Excise Tariff Act, 1985; (ii) Whether the extended period of limitation was invocable and the duty had to be worked out on cum-duty price with consequential re-examination of exemptions and penalty.

Issue (i): Whether the impugned products were classifiable as Ayurvedic medicaments under Chapter 30 or as cosmetics and personal care preparations under Chapter 33 of the Central Excise Tariff Act, 1985.

Analysis: Classification depended on whether the products had therapeutic or prophylactic use as their main purpose. Mere use of ingredients mentioned in authoritative Ayurvedic texts was not sufficient. The relevant tariff notes showed that medicaments must be products compounded for therapeutic or prophylactic use, while Chapter 33 covered preparations for beauty, skin care and hair care even if they contained subsidiary pharmaceutical or antiseptic ingredients. Applying the common parlance test and the product descriptions on the labels, the products used for cracked feet, acne and dandruff were treated as medicaments, whereas products meant for skin care and hair nourishment were treated as cosmetic or hair preparations. Two products were not finally classified because their classification had already changed from the show-cause notice and required fresh adjudication.

Conclusion: Comal, Turmeric 'N' Clove and Basil 'N' Neem were held to be Ayurvedic medicaments under Chapter 30. La Faire and Forest Flower were held to fall under Chapter 33. Floral Body Gel and Natural Touch were remanded for fresh adjudication. The remaining unchallenged classifications were upheld.

Issue (ii): Whether the extended period of limitation was invocable and the duty had to be worked out on cum-duty price with consequential re-examination of exemptions and penalty.

Analysis: The appellants had not disclosed the manufacture and clearances of the products to the department, and the existence of earlier circulars showed that the classification issue itself was controversial. On that basis, the extended period was held applicable. At the same time, where duty was demanded, the sale price had to be treated as cum-duty price, with recalculation after permissible deductions. The claimed exemption notifications and any arithmetical errors in duty computation were left to be re-examined by the authority below. Penalty was not finally decided and was left open.

Conclusion: The extended period of limitation was held invocable. Duty was to be recomputed on cum-duty basis with re-examination of exemption benefits and duty calculation. Penalty was left open.

Final Conclusion: The appeal succeeded only in part, with some products classified as medicaments, some as Chapter 33 preparations, two products sent back for reconsideration, and the duty demand to be recomputed accordingly.

Ratio Decidendi: For classification under Chapter 30 of the Central Excise Tariff Act, 1985, a product must have therapeutic or prophylactic use as its main purpose; use of Ayurvedic ingredients alone does not make it a medicament, and preparations meant principally for beauty, skin care or hair care remain classifiable under Chapter 33 notwithstanding subsidiary medicinal properties.

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