TaxTMI 
TaxTMI 
2006 (11) TMI 3
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.... was issued as to why the said product shall not be classified wider SH No.3305.99 being a cosmetic product attracting excise duty at the rate of 30% ad valorem. It was alleged that by wrong classification of its product there had been a short payment of central excise duty amounting to Rs,11,12,129/-. A demand of the said amount in terms of Rule 9(2) of the Central Excise Rules, 1944 (for short, 'the Rules') read with section 11A of the Central Excise Act, 1944 (for short, 'the 1944 Act') was issued. A penal action in terms of rule 173Q of Rules was also proposed. Cause having been shown by Respondent, the matter was heard by the Deputy Commissioner, who opined that the product was classifiable under SH 3305.99 of the 1985 Act. Respondent ....
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.... prepared and concentrated. (b) Coconut oil in hearted with Nagarevel Pan. (c) Concentrated equeous extract is added to coconut oil and boiled. (d) Milk solution is added to hot Coconut oil and boiled. Then kapur kachli powder is added. (e) Bulk is cooled and fragrance is added. It is kept for 7 days and filtered." The assessing authority in its order furthermore noticed: "They further submitted that the Coconut oil is used in the said Product for the purpose of using the same as base to enable application of the above referred Ayurvedic Ingredients. Their product contains, time tested herbs with well known properties. They submitted the various properties of the said Ayurvedic. Ingredients ultimately ensured dandruff free....
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.... No. 3305.10 and not under 3305.99 as alleged in the Show Cause Notice. The Chapter Sub Heading No. 3305.10 is applicable to the perfumed hair oil whereas Chapter Sub Heading No. 3305.99 covers preparation for use on the hair other than perfumed hair oil and hair fixer. They submitted that going by the contents of their product and manufacturing process set out hereinabove, theft product does contain Sugandhi Dravya i.e. perfume and accordingly it merits classification as perfume hair oil under 3305.10. In this context they refer to and rely upon the decision of Honourable Supreme Court of India in the case of Dumlop India Ltd., wherein the court has held as under: "When an article has by all standard reasonable claim to be classified un....
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....the end of the manufacturing process. This is apparent from the manufacturing process detailed in the Adjudication Order. We, therefore, hold that the impugned product is classifiable under sub-heading 3305.10 and the matter is remanded to the jurisdictional Adjudicating Authority to recompute the duty of excise payable by the appellants. We also agree with the learned advocate that the issue involved being classification of a product for which classification declaration was filed by the Appellants, penalty under Rule 173Q of the Central Excise Rules, 1944 is not imposable. We, therefore, set aside the penalty imposed on the Appellants. 10. Respondent, as noticed hereinbefore, not only disclosed the ingredients of its products, but also ....
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....doctor's prescription, does not by itself lead to the conclusion that it is not a medicament. We are also in agreement with the submission of Mr. Lakshmikumaran that merely because the percentage of medicament in a product is less, does riot also ipso facto mean that the product is not a medicament. Generally the percentage or dosage of the medicament will be such as can be absorbed by the human body. The medicament would necessarily be covered by fillers/vehicles in order to make the product usable. It could not be denied that all the ingredients used in Banphool Oil are those which are set out in the Ayurveda textbooks. Of course the formula may not be as per the textbooks but a medicament can also be under a patented or proprietary formu....