TaxTMI 
TaxTMI 
2007 (7) TMI 89
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....-1982 in favour of the assessees by holding that both products were ayurvedic medicinal preparations and not toothpaste or toothpowder or cosmetics falling under erstwhile Central Excise Tariff Entries 14F arid 14FF. This decision was challenged by the Revenue by filing appeal No. 613/82 before the Hon'ble Bombay High Court which by its judgment dated 27-4-1988 [2000 (123) E.L.T. 431 (Bom.)] upheld the finding that the products cannot be classified as cosmetics. However, the Court held that there were no pleading that the products in question were exclusively ayurvedic medicines. Both the Revenue as well as the assessees filed Special Leave Petitions before the Apex Court; SLP No. 1918/1989 filed by the Revenue was dismissed by the Hon'ble Supreme Court vide order dated 7-9-1990 [2001 (127) E.L.T. A105 (S.C.)] and as regards SLP No. 14082/88 filed by the assessees, the Revenue authorities consented that the products were rightly classified by the High Court as ayurvedic medicines and the Apex Court passed a consent order on 19-4-1993 [1993 (80) E.L.T. A47 (S.C.)] on this basis. 3. With effect from 1-3-1986, there was a change in the Central Excise Tariff, and the new Central Excis....
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....pening paragraph of this order as cosmetics under Chapter 33 of the Schedule to the CETA, 1985; the appellants replied to the show cause notices which were taken up for hearing after the Supreme Court's dismissal of appeals filed by the department against Tribunal's order dated 3-2-2003 and the notices were adjudicated by order dated 30-1-2006 of the Commissioner of Central Excise, Goa, who classified the products as under : Product Chapter Heading prior to the amendment of the CETA, 1985 (up to 28-2- 2005) Chapter Heading after the amendment of the CETA, 1985 (from 1-3-2005) Vicco Vajradanti Paste 3306.10 3306 10 20 Vicco Vajradanti Powder 3306.10 3306 10 10 Vicco Vajradanti SF Paste 3306.10 3306 10 20 Vicco Turmeric Skin Cream 3304.00 3304 99 50 Vicco Turmeric S Skin Cream (Foam base) 3304.00 3304 99 50 Vicco Turmeric Cream (with foam case) 3304.00 3304 99 50 Vicco Turmeric Skin Cream (in oil base) 3304.00 3304 99 50 Vicco Turmeric WSO Cream (with foam base) 3304.00 3304 99 50 A duty demand of Rs. 3,41,81,782/- and education cess of Rs. 12,292/- was confirmed against the assessees together with interest, while penal action proposed against them....
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....authorities under the Drugs and Cosmetics Act as well as by the Joint Commissioner, which material has not been controverted by the Revenue, and submit that the show cause notice does not disclose any material to substantiate the case of the department that the products in dispute are not ayurvedic medicines. As regards the stand of the department that Note 2 to Chapters 30 and 33 has not been considered for the purpose of classification, the assessees submit that Note 1(d) to Chapter 30 only states that preparations of Chapter 33 shall not be covered by Chapter 30 even if they contain therapeutic or prophylactic properties and, therefore, in order to be beyond the purview of Chapter 30, the products must first be cosmetics and if such cosmetics have subsidiary therapeutic or prophylactic use, then merely by such subsidiary use, the cosmetics cannot be classified as medicines. In this connection they rely upon the judgment of the Apex Court in Puma Ayurvedic Herbal (P) Ltd. v. CCE, Nagpur, 2006 (196) E.L.T. 3 (S.C.) = (2006) 3 SCC 266. They submit that the products in question have throughout been held to be medicines and, therefore, Note 1(d) to Chapter 30 is not applicable to the....
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....der dated 7-12-2004 of the Apex Court which, while noting that mere decision of a court of law without anything more, cannot be justification enough for changing classification without change in the nature of a product or a change in the use of the product or a fresh interpretation of the tariff heading by such decision, gave liberty to the Revenue to undertake such tests in respect of the products for the purpose of classification under the appropriate tariff headings. The Commissioner has analysed the application of trade parlance tests as well as the relevance of Chapter Notes 2 and 5 of Chapter 33 and Chapter Note 1(d) to Chapter 30 of the Schedule to the CETA, 1985 in paragraphs 19.9 to 19.13 of the order and admitted the therapeutic as well as cosmetic application of turmeric, which is the sole active ingredient in the turmeric based products in dispute, viz. Vicco Turmeric Skin Cream and Vicco Turmeric Skin Cream (foam base and oil base), Vicco Cream (with foam base) and Vicco Turmeric WSO Skin Cream (non greasy base). Shri Mondal further submits that the products in dispute are known in industry as FMCG products and even the NCERT Textbook, Introductory Macroeconomics, for ....
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....cco Turmeric is available in different bases like oil, foam and cream. The show cause notices issued by the Goa Commissionerate are based only on advertisements of the assessees themselves, and the packing materials therefor, and all these issues have been dealt with by the Civil Judge, Thane, the Hon'ble Bombay High Court in its order dated 27-4-1988 and the Tribunal in its order dated 3-2-2003. The assessees have also placed on record affidavits of consumers, ayurvedic experts, wholesalers, dealers, retailers and chemists to emphasize the point that the commercial/trade understanding of the products is that they are medicaments. The relevant extract from the affidavit of one Dr. V.S. Upasani who has his hospital and dispensary at Dombivli and also runs a dispensary on charitable basis, is reproduced below :- "3. I know Vicco Laboratories. A medical representative from Vicco Laboratories approached me. He brought with him Vicco Vajradanti (Paste and Powder), which are products of Vicco Laboratories. He told me that they were exclusively Ayurvedic preparations and also advised me to use and prescribe them in my general practice. He also furnished me with the literature of Viçco V....
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....od oil have therapeutic properties in Ayurveda. In Ayurveda, Turmeric is recommended for a number of skin diseases like Urticaria, inflammation and boils. According to Ayurveda Sandalwood oil has soothing property and it also relieves itching. I would regard a product made out of an extract of Turmeric and Sandalwood oil with base of Vanishing Cream as an exclusively Ayurvedic medicines. Vanishing Cream is prepared out of mixture of Alkalied and Acids. The Alkalies and Acids have been referred to in Ayurveda as Kshar and Amla and the mixture of these two make Vanishing Cream. Such a base is a recognised in Ayurveda. Vicco Turmeric Cream is made from an extract of turmeric and sandalwood oil which is made compatible in the said base. I say that Vicco Turmeric is an exclusively ayurvedic medicine. 4. Ayurveda is a Science which deals with the prevention and cure of the diseases. With this definition of Ayurveda the Ayurvedic products or Ayurvedic preparations are medicines. There would be two types of Ayurvedic medicines namely preventive and curative. An Ayurvedic medicine may have both preventive and curative value. Vicco Vajradanti and Vicco Turmeric have both preventive and cura....
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.... he regards both the products of Vicco as exclusively ayurvedic medicines and not as toothpaste and tooth powder. Affidavits of customers have also been filed to the effect that they were advised by the dentist to use Vicco Vajradanti powder and paste and that they understood the two items as exclusively ayurvedic medicines and not as toothpaste or tooth powder. 14. Dr. Shyam H. Rane of Andheri (East), Mumbai, has averred that a medical representative from Vicco Laboratories came to him and showed him four products, namely Vicco Turmeric skin cream in oil base, Vicco Turmeric-WSO skin cream, Vicco Turmeric-S cream (with foam base) and Vicco Turmeric cream (with foam base) together with literature of the products. He has also averred in his affidavit as follows :- "5. I used Vicco Turmeric Cream in oil base for patients having itching, burning, laceration of skin, abrasion of skin, wounds and other disorders of the skin like dermatitis, inflammatory edema (krimihara) antiseptic and leprosy wounds. I also tried Vicco Turmeric Cream in oil base in cases of infants for inflammation of skin around the anus due to diarrhea and I have found that after use of Vicco Turmeric Cream in oil ....
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....iseptic and cooling properties. I regard Vicco Turmeric-S Cream (with foam base) as an exclusively Ayurvedic Cream. According to me, the Vicco Turmeric-S Cream (with foam base) is an Ayurvedic medicine because its therapeutic ingredients are Ayurvedic and it is manufactured under an Ayurvedic Licence. I consider the Vicco Turmeric-S Cream (with foam base) as an Ayurvedic Medicine because of its antiseptic and cooling properties of both Turmeric and Sandal wood Oil respectively. It is used widely for dermatological conditions like cuts, nicks, allergic rashes, burns and piles. I regard Vicco Turmeric-S Cream (with foam base) as an exclusively Ayurvedic medicine and not a cosmetic or toilet article. 8. I used the Vicco Turmeric Cream (with foam base) on patients for skin infections, healing of wounds, to clear pores and blackheads, for quick healing of skin, to stop bleeding, heals cuts and injuries, to sooth boils, pimples, acne and burns. This medicine is excellent for washing of wounds. Turmeric has, got antiseptic properties. I regard Vicco Turmeric Cream (with foam base) as an exclusively Ayurvedic Cream. According to me, the Vicco Turmeric Cream (with foam base) is an Ayurvedi....