TaxTMI 
TaxTMI 
1995 (9) TMI 198
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....edicament classifiable under Heading 3003.20 as claimed by the manufacturer, but the product was classifiable under Heading 3304.00. He, however, extended the benefit of Notification No. 339, dated 22-8-1986 and correspondingly confirmed the demand of duty. 2. The Order of the Collector was passed on 26th October, 1988. Subsequently, the manufacturer, while classifying the goods under Heading 3304.00 claimed the benefit of Notification 27-C.E., dated 20-3-1990. The show cause notice was issued to him by the Assistant Collector of Central Excise proposing denial of the Notification benefit. After considering the manufacturer's claim that the classification under Heading 3304.00 had been claimed under protest and that the product ought to be classifiable under Heading 30.03, the Assistant Collector confirmed the demand for duty. His Order has been upheld by the Collector, Central Excise (Appeals). These two appeals are, therefore, against the Order of the Principal Collector and the Collector of Central Excise (Appeals). 3. We have heard Shri V. Lakshmikumaran, Advocate for the appellant. He said that Lip Salve was a medicament for treatment of sore, inflamed, roughen....
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....ed. 5. There is no doubt/dispute that the product is manufactured in accordance with the Joint Services Specifications for Lip Salve No. 6840-6. This shows ingredients to be white bees-wax, white soft paraffin, liquid paraffin and lanolin-all conforming to I.P. grade; cetyl alcohol C.P. grade. The other ingredients are stabiliser and perfume. Shri Lakshmikumaran has produced an extract from 1923 Edition of a British Pharmaceutical Codex and says that in view of the Note in the Introduction to the British Pharmacopoeia 1988, the monograph in the earlier Edition remains effective. The extract of the 1923 Codex produced by him is for unguentun rosatum, or rose lip salve. The ingredients are Alkana Root bruised, White Bees-wax, Oil of Rose and Prepared Lard. It may no doubt be true as he says that Alkana Root and Prepared Lard have been substituted by other ingredients, taking into use in tropical conditions and abhorrence to use of animal fats in this country. However, it is not possible from this extract alone to conclude that it is used as a medicine and not as a protective cream. Further the Introduction to the B.P. 1988 says that it supersedes B.P. 1980, and only includes ....
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....t. The fact of manufacture of an item under licence under this Act, therefore, is no guarantee that it is a medicament. The Certificate dated 9th February, 1987 of the Deputy Director (General) of the Directorate General of Health Services says that Lip Salve is a protective/preventive against treatment of chapping of lips. It further says that chapping of lips includes sores, inflammation, characteristics, fissures and `similar diseases of mucous membrane of lips'. The thrust of the Certificate, therefore, is that this Lip Salve is used as protective/preventive against what it describes as `diseases' of the mucous membrane of lips but are not in fact disorders, since these are not caused by germs. These statements do not again necessarily lead to the conclusion that this is a medicament. The statements made can as well apply to barrier creams, or sun screen lotion which protect the screen against chemical and ultraviolet rays respectively. Both these are classifiable under Chapter 33. The Certificate does contain a sentence that disorders can be cured by use of Lip Salve. It does not, however, state any published data or other evidence in support of the claim. The Certificate date....
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....ing. The product is used to protect the skin against damage caused by natural factors such as cold and weather conditions. 8. Shri Lakshmikumaran urged strongly that the product did not conform to the requirements of Note 2 of Chapter 33. This Note reads as follows : "Heading 3302 to 3307 apply inter alia to products whether or not mixed suitable for use as goods of these headings and put up in packings with labels, literature or other indications that they are used as cosmetics or toilet preparations or put up in a form clearly specialised for such use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents are held out as having subsidiary curative or prophylactic value." 9. Heading 3304 covers beauty or make-up preparations and preparations for care of the skin. There are, therefore, two categories of goods covered by it, beauty or make-up preparations and preparations for the care of the skin. From the use of the words `cosmetic' occurring in the Note, it is clear that the Note, in so far as it applies to this Heading, only refers to cosmetic preparations. The use of the phrase `inter alia' reinforces this conclu....
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....e orders appealed against. Dated 16-3-1995 Sd/- Gowri Shankar) Member (T) 13. [Order per : S.L. Peeran, Member (J)]. In the above appeals, the Learned Member, Shri Gowri Shankar has heen pleased to reject the appeals, however, has granted relief for abatement of duty under Section 4 of the Act, as well as has held that duty for six months cannot be collected in terms of the judgment of the Hon'ble Supreme Court as rendered in the case of Rainbow Industries (supra). 14. I could not have the benefit of the views of the learned VicePresident in this matter and he has been pleased to call for my views, and hence I am expressing the same. 15. I agree with my Learned Brother that product `lip salve', is required to be classified under sub-heading 3304.00 and the product cannot be considered as a medicament and its classification under sub-heading 3002.20 has been rightly rejected. 16. As regards the claim for abatement of duty under Section 4, the matter is required to be remanded for fresh consideration. 17. As regards duty confirmation for six months, I respectfully differ from my Learned Brother's views, as the Hon'ble Supreme ....
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....nts." Heading No. 33.04 reads as follows : 33.04 "Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen and suntan preparations; manicure or pedicure preparations". 19. Chapter Note 1 (c) refers to Medicinal and Toilet Preparations (Excise Duties) Act, 1955. This Act contains the definition of Toilet Preparations as follows : "2(k) "toilet preparation" means any preparation which is intended for use in the toilet of the human body or in perfuming apparel of any description or any substance intended to cleanse, improve or alter the complexion, skin, hair or teeth, and includes deodorants and perfumes." 20. Insofar as the common understanding of the word `cosmetics' is concerned we find that Webster' s New Dictionary and Thesaurus mentions as follows : "cosmetic [koz-met'ik] adj beautifying or correcting faults in the face, hair etc.; done or made to enhance the appearance of anything in a preparation to enhance beauty." The word `cosmetic' has been defined in Webster's Ninth New Collegiate Dictionary is as follows : Cosmetic 1 : of, relating to, or making for beauty esp. of the co....
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....ith these products has to be established before their provisions could be invoked. The department has, however, failed to do so. 26. As per Martindale Extra Pharmacopoeia, Typically Barrier Creams (which vary in composition) are used to prevent damage to the skin by mechanical, chemical or bacteriological action. Such preparations normally contains suitable powders such Zinc Oxide, Kaolin, Fuller's earth and talc and silicon may be included for the water repellant and protective properties. They are, therefore, normally used for protection against acid and neutral irritants, alkalis and soaps, explosives and photographic chemicals, paraffin oils, paints dusts and tars etc. whereas the lips salve has different composition and different use and purposes. It is mainly for protection and curing of lips during cold weather. 27. The product also does not appear to be similar to any of the type of other products mentioned in Heading 33.04 Chapter Note 5 as, inter alia, no evidence has been produced in this respect. 28. Hence, in my opinion, the Heading 33.04 was out of reckoning. 29. This still leaves the question as to whether the product can be considered....
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.... in one form or another. 33. It is immaterial in this context that the ingredients do not exactly tally, because on one hand there is variation in composition of the product as indicated in different Pharmacopoeia, on the other hand it is well known that some of the ingredients may be modified or substituted depending upon the advances in research or requirement. 34. In this context, while, it is true, as mentioned by my learned colleague, that the later edition of Pharmacopoeia supercedes earlier one and some items become obsolete when more effective ones are discovered, yet, this cannot be the determining factor for deciding whether a product was a medicament or not. This is because of the fact that while advances in science and technology may result in development of more effective products and therefore, may replace the old ones which may go out of use; but this does not mean that the old ones ceased to be medicaments as such. It is also to be remembered that degree of advances or use of latest medicines may be different in different countries and also different in various regions of the same country or even in the same region from time to time. For example, whi....
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....gnificant that the emphasis here is not on the property of the constituents but on the properties of the mixture or the product as it emerges after the constituents have been compounded together i.e. it is the final product which must be shown to have therapeutic or prophylactic use. 39. Even the Principal Collector has also stated that lips salve has not got prophylactic and therapeutic properties but treated them as subsidiary properties and compared it with barrier cream. But in my opinion, the Department has not been able to show that it was mainly a cosmetic preparation for beautifying or for better appearance and the prophylactic therapeutic properties were only subsidiary and that it was used like a barrier cream. Further, in view of the certificate of the Director General of Health Services, New Delhi that the lips salve has a medicinal use, I would like to put it the other way that it was primarily a medicament which may have subsidiary uses as well. 40. What we are required to essentially see is whether the product really serves the purpose of a drug or pharmaceutical product and since it has been certified that it is used for treatment for curing and prot....
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.... have gone into this aspect in view of the irrespective findings; The learned Members have also not dealt with this subheading. The learned counsel has, of course, shown that the lips salve is mentioned in Swiss Pharmacopeia and Polish Pharmacopeia and the older British Pharmaceutical Codex; but he has not been able to show that the composition of the product in question is exactly the same as in these pharmacopeias and has argued that some of the ingredients could be substituted for a variety of reasons. While this may be so the reasons advanced namely tropical conditions, does not appeal to me and is not apparently correct because if the product was meant for use in high altitudes in Himalayan regions, then certainly the climate of such regions cannot be described as `tropical' by any stretch of imagination. In fact, as we go higher and higher in the Himalayan regions, the climate becomes similar to the European climate. That of course, does not mean that the argument that substitutes could be permitted in certain circumstances for specific reasons is incorrect. (Only example regarding tropical region is incorrect). 45. Since admittedly, the composition is not exactly the....