AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 7
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..... After completion of follow up investigation, a show cause notice was issued on 13.09.206 covering the period December, 2003 to August, 2004 and demanding duty short paid in respect of product Roop Amrit . Another show cause notice was issued on the same day in respect of activities at Bhopal covering the period September, 2004 to July, 2005 for demanding short paid duty in respect of Roop Amrit and Complete Solution . The show cause notices proposed classification of goods under tariff heading 33.04 upto 28.02.2005 and under heading item 33.04 9910 and 33049990 thereafter. The show cause notice also proposed valuation in terms of Section 4A and sought to deny the SSI exemption availed by the appellant-assessee. The show cause notice relating to Bhopal unit was decided by the Commissioner, Central Excise, Bhopal. Vide the impugned order dated 10.08.2007, he held that the two products were rightly classifiable under heading 3003 as Ayurvedic medicine . He further held that the valuation of the product shall be done under Section 4. He upheld the denial of SSI exemption and confirmed the demand for extended period. Penalties were also imposed on the appellant and partners of the app....
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....ding 3003 as medicaments. 7. We have perused the original order dated 10.08.2007 of Commissioner of Central Excise, Bhopal. He had examined the nature of product, the tariff headings and case laws and arrived at the conclusion that these products are correctly classifiable under Patent and Proprietory Ayurvedic Medicaments falling under main heading 3003. A perusal of the findings indicates that the original authority heavily relied on the fact that the appellant-assessee was registered with Drug Controller, M. P. who issued certificate stating that Roop Amrit has medical properties. Further, he also recorded that the ingredients of these products are specified in the authoritative books of ayurveda specified in First Schedule of the Drugs and Cosmetic Act, 1940. The original authority observed that based on these two grounds that the products are to be called as PP Ayurvedic medicine. He further relied on the Hon'ble Supreme Court decision in CCE, Calcutta vs. Sharma Chemical Works- 2003 (154) ELT 328 (SC) to support his views. A reference was also made to Supreme Court decision in Puma Ayurvedics Herbal (P) Ltd., vs. CCE, Nagpur 2006 (196) ELT 3 (SC). 8. The nature of the produ....
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....le under the Central Excise Tariff Act 1985, for the purpose of classification chapter notes can be taken as aid for understanding their various entries under various Headings of the tariff. What is to be noted from Chapter 30 of the Tariff Act is that under Note No. 1(d) preparations covered by Chapter 33 even if they have therapeutic or prophylactic properties are excluded from Chapter 30. Medicament has been defined in Note No. 2(i) to mean goods which are either products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic use. On a reading of Note No. 1(d) with Note No. 2(I) of Chapter 30 under Heading Pharmaceutical Products , it is clear that preparations which fall under Chapter 33 even if they have therapeutic or prophylactic properties are not covered under Heading 30.03 as medicaments . 9. Note 2 of Chapter 33 and commented upon by Counsel has been brought to our notice for both the parties. It reads thus :- Heading 33.07 apply, Nos. 33.03 to 2. inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings a....
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....ble to persuade us to take a different view from the one taken in the majority opinion of the Tribunal. We confirm that the product Lip Salve is essentially a preparation for protection of lips and skin and is not a medicament . Such preparations which have a subsidiary curative or prophylactic value clearly fall under entry 33.03 to 33.07 as per Note No. 2 under Chapter 33. The product clearly is covered by entry 33.04 read with Note No. 5 of Chapter 33, it essentially being a preparation for protection of lips or skin. We have also gone through the minority opinion expressed by one of the members of the Tribunal and the reasoning therein supported before us on behalf of the appellant. For the reasons aforesaid, we are unable to agree with the minority view. In the result, we find no merit in these appeals and the same are hereby dismissed". 10. The Hon'ble Supreme Court in case of Shree Baidyanath Ayurved Bhavan Ltd. vs. CCE 1996 (83) ELT 492 (SC) upheld the view of the Tribunal to the effect that ordinarily a medicine is prescribed by a medical practitioner and it is used for a limited time and not everyday, unless it is so prescribed to deal with specific decease like diabetis....
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....ct, the appellant- assessee also had a certificate issued by Tehsildar confirming that the factory is located in rural area. As such, we find that denial of SSI exemption to the appellant on this ground is not sustainable. 14. The appellant-assessee contested the demand for extended period, we find that the appellant-assessee were not registered with the department for payment of Central Excise duty. The main plea of the appellant is that they were under bonafide belief regarding their product being ayurvedic medicine. We note that the appellant bonafide belief alone cannot be the ground for not invoking demand for extended period. Even considering this plea, it is not clear how for the product complete solution the appellant can hold a bonafide belief for classification under medicine. There is no ailment for which the said product is prescribed as cure Even in the submissions made by the appellant-assessee, there is no case law or ground to defend their bonafide belief to the effect that the said product can be considered as a medicine in any manner. We find no justification even for the alleged bonafide belief. No verification or enquiry has been made by the appellant with the ....