TaxTMI 
TaxTMI 
2006 (8) TMI 346
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....anufactured exclusively in accordance with the formulae described in "Ayurved Sar Sangraha", which is an authoritative book specified in the First Schedule to the Drugs and Cosmetics Act, 1940. In all their factories situated at other places, goods are being classified by their jurisdictional Central Excise authorities as falling under sub-heading 3003.31. It is their contention that even at their factory at Howrah, the goods were being manufactured in accordance with the formulae described in "Ayurved Sar Sangraha" for which purposes they are maintaining Batch Card, containing details of quantity of "Chyawanprash (Special)" to be manufactured and name of all the ingredients as well as their respective quantities required for manufacture of the Batch concerned. These ingredients and their respective quantities are exactly as per page 544 of "Ayurved Sar Sangraha". These Batch Cards are signed by the Vaid/Chemist at their factory. The goods in question were being cleared by them at nil rate of duty for the last number of years without payment of duty and no objection was ever raised by the Central Excise Department or by the Audit parties. 3.  Explaining further Shri Bagaria....
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....iods, visited the said factory on several occasions and examined the relevant facts relating to manufacture and composition of different products including the said product Chyawanprash (Special). During one such visit in May, 1996, the Superintendent of Central Excise required the Appellant to inform him in writing about the ingredients of the said product as well as the relevant reference book. Accordingly, in a letter dated 10-5-1996 duly received by the Superintendent on 14-5-1996, the appellant mentioned the ingredients of its said product and also mentioned the name of the reference book and its page number that is, page No. 544 of Ayurved Sar Sangraha. The Audit Teams from "Central Excise Revenue Audit" also used to carry out their audits at the factory. During such audits, the Audit Teams examined inter alia all production records, input consumption records, invoices, etc." 4.  On the other hand, the Commissioner has held that the appellants were not manufacturing "Chyawanprash (Special)" according to formulae prescribed at page 544 of authoritative book "Ayurved Sar Sangraha" on the ground that the approval granted by the Director Drug Control, West Bengal, vide....
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....e books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 and sold under the name as specified in such books, they would get classified under sub-heading 3003.31. The appellants have strongly contended that right from the beginning they are manufacturing "Chyawanprash (Special)" in accordance with the formulae prescribed in "Ayurved Sar Sangraha", which is a authoritative book specified in the First Schedule to the Drugs and Cosmetics Act, 1940. It is their contention that not only in their Howrah Factory i.e. the appellants herein, but in all other factories they are manufacturing "Chyawanprash (Special)" in accordance with the said specified formulae and the same is being classified as falling under sub-heading 3003.31, without any objection by Central Excise authorities. The Commissioner, for holding that the appellants was not manufacturing "Chyawanprash (Special)", in accordance with the said formulae, has referred to the fact that the approval dated 15-7-88 by the Director of Drug Control, approving the manufacture of "Chyawanprash (Special)" as per page 544 of "Ayurved Sar Sangraha" was penned through or cancelled by the said authorities under his signatur....
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.... reference to the drug formulae of "Chyawanprash Special" approved by your department on 15-07-88 in accordance with authoritative book "Ayurved Sar Sangrah " Page No. 544. On receipt of the approval we found that some ingredients are missing and some quantities are erroneously mentioned probably due to typographical error. However, since you have approved the formulae as per, "Ayurved Sar Sangrah" which is mentioned in the drug approval formulation as a reference book, we are continuing our production as per the formulation written in the said authoritative book. We are therefore, once again enclosing herewith a photocopy of page No. 544 of "Ayurved Sar Sangrah" for your doing the needful." As is clear from the reading of the above letter, the mistake in the approved list was as regards the quantities of various ingredients, which were mentioned against the said products. The appellants had pointed out that some of the ingredients are missing and the quantities are erroneously mentioned. Accordingly, they made a request to the said authority to take the corrective measures. In the said letter, the appellants had informed the Drug Control that - "We are continuing our p....
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....e Sl. Nos. 3, 5, 8 of the approved list. Admittedly, the appellants were maintaining Batch Cards giving details of the ingredients issued along with quantity and detailed records were being maintained by them. Nothing wrong has been found by the adjudicating authority in respect of the such records. As such, we find no force in the revenue's contention that the appellants was manufacturing the Drug appearing against Sl. No. 4 instead of the product appearing against Sl. Nos. 3, 5, 8 of above list. 9. Reference has also been made by the adjudicating authority to test report No. EXP/1507, dated 5-5-2001 recovered from the appellant's Head Office showing a different formulae. The appellant submits that the said report was not in connection with the "Chyawanprash (Special)" manufactured by them exclusively as per the formulae specified in "Ayurved Sar Sangraha" but related to a product developed by them for export purposes. The expression EXP attached to the said report signifying the same to be the test report of an export samples. They have drawn our attention to enquiry dated 14-2-2001 received from a foreign buyer of Italy requesting the appellants to make a trial sample of....
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....qua-regia which is a mixture of hydrochloric acid and nitric acid in the proportion of 3:1 and nothing else. In this connection, copies of the relevant page of Ayurved Sar Sangraha relating to Makardhwaj, a Certificate dated 11-7-2005 from Dr. Debasish Pahari, M.D. (Ayu) MBA., Ph.D (Fellow), a well known and reputed Ayurvedic Expert and relevant pages from Ayurvedic Formulary of India published by the Government of India were filed before the Commissioner and the entire position was clarified to him. The said submissions of the appellant have been rejected by the Commissioner by holding that these "do not appear to be convincing". It is submitted that the said purported finding is nothing else but a mere surmise and conjecture. There was absolutely no reason or basis or material to reject the said submissions by holding that it "does not appear to be convincing". The Commissioner was not a chemical expert or technical expert. The appellant had produced evidence in support of its submissions as stated above and there was not even an iota of material to reject the aforesaid submissions. Further and in any event the said purported findings regarding use of gold have nothing to d....