Excise classification of medicated drops turns on exclusive Ayurvedic character, not just a drug licence or some Ayurvedic ingredients.

Medicated cough drops and throat drops were held not to qualify as Ayurvedic medicaments under sub-heading 3003.30 because classification under the Central Excise Tariff depends on the tariff entries, chapter notes and the nature of the product as a whole, not merely on a drug licence. The products were marketed under a brand name, known internationally as allopathic preparations, manufactured by Western methods and not prepared in accordance with Ayurvedic principles and practice. The presence of some Ayurvedic ingredients was insufficient to establish exclusive Ayurvedic character. They were therefore correctly classified as patent or proprietary medicaments under sub-heading 3003.10.

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Issues: Whether medicated cough drops and throat drops manufactured under a drug licence but prepared by Western allopathic methods and containing some Ayurvedic ingredients were classifiable as Ayurvedic medicaments under sub-heading 3003.30 of the Central Excise Tariff Act, 1985 or as patent or proprietary medicaments under sub-heading 3003.10.

Analysis: The classification had to be determined under the Central Excise Tariff by reference to its own headings, Chapter Notes and the nature of the product as a whole. The drug licence under the Drugs and Cosmetics Act, 1940 was relevant but not conclusive for excise classification. The Tariff did not require that an Ayurvedic medicament be manufactured strictly from classical formulas in authoritative Ayurvedic texts, yet the product had to be shown to be exclusively Ayurvedic. The evidence showed that the products were marketed under a brand name, were known internationally as allopathic preparations, were manufactured by Western methods, and were not prepared in accordance with Ayurvedic principles and practice. The presence of some Ayurvedic ingredients by itself was insufficient to establish exclusive Ayurvedic character.

Conclusion: The products were not exclusively Ayurvedic medicaments and were correctly classified as patent or proprietary medicaments under sub-heading 3003.10 against the assessee.

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