TaxTMI 
TaxTMI 
2017 (3) TMI 1439
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....sumer Care Products, Indore. The dispute in the present set of appeals relates to categorization of these impugned goods either as Ayurvedic medicine or cosmetic/ toilet preparations and whether or not the processes undertaken by GTM will amount to manufacture. 2. Based on certain intelligence, that M/s Global Tele Mall/GTM have got the said products manufactured from M/s Gurukripa Consumer Care Products and carried out labelling and re-labelling and marketed the same, investigation was initiated. On completion of the enquiry, proceedings were initiated which resulted in the order-in-original dated 25/11/2009 confirming the demand of Central Excise duty and imposing various penalties. The seizure of goods was separately adjudicated by the Jurisdictional Original Authority and on appeal vide order dated 17/05/2010, the Commissioner (Appeals) upheld the confiscation and penalties. On further appeal against these orders, the Tribunal vide final order No. A/153-158/2012 - EX (BR) dated 24/01/2012 remanded the case back to the Original Authority for a fresh decision on all issues including classification. The present impugned order dated 25/04/2012 was in compliance of such direction f....
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....It is clear from the certificate endorsed by the Licensing Authority, office of the Controller of Food and Drugs Administration, Madhya Pradesh, that each one of the ingredients are mentioned in the authoritative text "Bhav Prakash Nighantu". The Ministry of Ayush, Government of India, recognizes Bhav Prakash as main classical text for reference of Ayurvedic principles. The reliance placed by the Original Authority on Chapter Note 1 (d) of Chapter 30 is not appropriate. The learned Counsel further explained the nature of ingredients contained in the herbal hair oil and herbal powder shampoo. He submitted that it is a settled law that when the product manufactured out of ingredients specified in Ayurvedic text, the same should be classified as Ayurvedic medicine. It was further submitted that the appellants marketed these products as intended for herbal hair treatment. The containers of the product clearly mentioned the product as "Ayurvedic medicine". The seller and the buyer of the product understood and identify the product as Ayurvedic medicine for treatment. These are not considered as cosmetic product by the persons who are dealing with the same. The learned Counsel relied on ....
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....dicine labelling of containers to render them marketable to the consumer shall amount to manufacture. 8. We have heard the learned Counsels for the appellants and learned AR for the Revenue. On the first issue regarding correct classification of the product, in question, we note that the claim of the appellant is that these are for treatment of hair fall premature greying, dandruff and split hair. We note that the State Authorities in Madhya Pradesh have approved the products as Ayurvedic medicine. The Original Authority held that the registration by State Authorities is for the purpose of regulation of manufacture of the goods under reference. This cannot be considered as authority for classification under Central Excise Tariff. He referred to CETH 33051090 and 33059019 and to Note 1 (d) of Chapter 30 to hold that even if these products have therapeutic value they will still be classified under chapter 33 only. No other discussion was recorded in the impugned order regarding classification. We have perused the sample of the product with packing, submitted by the learned Counsel during the course of argument. The outer carton packing of the product identifies the same as "Keshyog ....
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....parations, a requirement under Chapter Note 2 of Chapter 33. In fact, all indications are to the contrary, that it is not a cosmetic or toilet preparation but a medicine. It is also important that the products have been made according to the Ayurvedic text 'Bhav Prakash' and all the active ingredients are herbal items like Amla, Bhringraj, Shikakai. The appellant has also been licensed as a drugs manufacturer. There is no merit in the Revenue's contention that sale from grocery shops and (not from pharmacies) should be taken as conclusive proof that in common parlance the product is understood as a cosmetic and not as a drug. Who sells is secondary to what is sold and what is bought. Many non-prescription drugs are sold from places other than pharmacies. That would not make all those non-prescription drugs anything other than what they are. Who sells depends upon what are the requirements under the relevant licensing law and that cannot be determinative of what is sold. 6. Much case law has been cited by both sides. But that only shows that classification of each product is required to be determined based on its facts and that there is no single rule applying into all products. We....
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....on. 11. On the next question relating to whether the process of labelling, packing undertaken by the appellant (M/s GTM/Global) will amount to manufacture or not, we note that Note 6 of Chapter 30, during the relevant period, clearly mentions that : "In relation to products of heading 3003 or 3004, conversion of powder into tablets or capsules, labelling or re-labelling of containers intended for consumers and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to 'manufacture'". 12. We are not able to accept the contention of the appellant to the effect that processes in the said note are not undertaken by them. The facts of the case are that M/s Gurukripa Consumer Care Products manufactured these items and packed them in plastic containers of 120 ml and 60 gms. The shampoo bottle was printed with text "TM Keshyog Herbal Powder Shampoo". The bottles of hair oil and shampoo powder were dispatched in separate corrugated boxes, normally containing 200 numbers of bottles of hair oil, 200 bottles of shampoo, respectively. Thereafter these products are put in combo box containing one bottle of....
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.... Mumbai vs. BOC (I) Ltd. reported in 2008 (226) E.L.T. 323 (S.C.), the Hon'ble Supreme Court held that mere labelling or relabelling in the absence of any activity of repacking from bulk packs to retail packs would not render the product marketable directly to the consumer. 14. As noted earlier in this order, the appellants are undertaking repacking from bulk to retail, labelling and rendering the product fit for retail sale to consumer. As such the processes undertaken will amount to manufacture. 15. Regarding the penalties imposed, we note that Shri Anuj Agarwal is Director of the appellant (GTM). The brand name belongs to the said appellant and they have made arrangement for manufacture and supply of these items and undertaken the labelling and re-packing before marketing. Regarding penalty imposed on Shri Anuj Agarwal, Director of GTM we note that provisions of Rule 26 have been invoked by Original Authority. The classification of the product as ayurvedic medicines, as claimed by appellants, has been upheld by us. The duty liability in this case arises, even after such classification, in view of deemed manufacture in terms of Chapter Note 6. In such situation alleging malafid....