TaxTMI 
TaxTMI 
2018 (3) TMI 1487
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.... impugned goods either as Ayurvedic medicine or cosmetic / toilet preparation and whether or not the processes undertaken by GTM will amount to manufacture. 3. On information by certain intelligence, that M/s. GTM is manufacturing Keshyog Ayurvedic/Herbal Hair Oil and Keshyog Ayurvedic Shampoo by carrying out certain process of supply procured from M/s. Gurukripa Consumer Care Products and have been removing the same without payment of Central Excise Duty searches were carried out at the premises of GTM by the Officers of Directorate General of Central Excise Intelligence Regional Unit, Indore. On completion of enquiry, proceedings were initiated by order dated 25.11.2009, confirming the demand of Central Excise duty and also imposing various penalties. The seizure of goods was separately adjudicated by the Jurisdictional Original Authority and on appeal vide order dated 17.5.2010, the Commissioner (Appeals) upheld the confiscation and penalties. On further appeal, the Tribunal vide order dated 24.1.2012, remanded the case back to the Original Authority for fresh decision on all issues including classification. 4. Para 6 to 8 of the Order dated 24.1.2012, passed by the Customs, E....
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....stablish such legal provision. The adjudicating authority has to examine the relevant facts and law and come to his own finding. Therefore, we find the matter needs reconsideration by the adjudicating authority afresh. The impugned order is set aside in respect of the present applicants, after, waiving the pre-deposit of duty, interest and penalty, and matter is remanded to the adjudicating authority to decide afresh after affording an opportunity of hearing to the appellants." 5. The stand of the appellant was that the products in question, are questionable under Chapter 30 as Ayurvedic medicine and not Chapter 33 as cosmetic or toilet preparation. He further explained the nature of ingredients contained in the herbal hair oil and ayurvedic hair shampoo and submitted that when the product manufactured out of ingredients specified in Ayurvedic text, the same should be classified as Ayurvedic medicine. 6. Regarding process undertaken by the appellant, amounting to manufacture or not, there contention is that the appellant received packed and sealed bottles of hair oil / shampoo powder. One bottle each of the oil and powder is packed together in combi-pack. The activity on the par....
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....mical Works, 2003 (154) ELT 328 (S.C.) , came to the conclusion that the products in question are rightly questionable under Chapter 30 as Ayurvedic medical preparation. Para 10 of the order impugned reads as under :- "10. Having considered the nature of product as per the labels and the literature submitted before us, approval by the State Drug Authorities and the ratio adopted by the Tribunal in Saini Hair Products (supra), we find that product, in question, are rightly classifiable under Chapter 30 as Ayurvedic Medical Preparation." 11. In the case of B.P.L. Pharmaceuticals Ltd. V/s. Collector of Central Excise, Vadodara (supra), the issue involved was the classification of 'Selsun' an antidandruff preparation containing 2.5% selenium sulphide. Having regard to the preparation's lable, literature, expert opinion and commercial parlance understanding the Hon'ble Supreme Court held that the item would fall as a drug and not a cosmetic. 12. In the case of Sharma Chemical Works (supra) the dispute was about the classification of 'Banphool oil'. The Apex court held that the mere fact that a product is sold across the counter and not under a doctor's p....
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....ough the Original Authority discussed Note 5 of Chapter 33, the wordings are similar in Note 6 of Chapter 30. The emphasis made by the appellant on the word "and" before "repacking from bulk packs to retail packs" in the note is of no relevance or help to the appellant as the nature of activies undertaken discussed above are covered by the scope of the chapter note. As stated, the appellant (GTM) are repacking from bulk to retail, labelling and making the product fit for marketing. As such, we find the process undertaken by the appellants amount to manufacture." 14. The learned Tribunal set aside the personal penalty imposed on Shri Anuj Agrawal and Pranay Shukla. In respect of imposition of penalty against M/s GTM Teleshopping Pvt. Ltd, the learned Tribunal has held that the Commissioner (Appeals) reduced the penalty from 11.92 lakh to Rs. 1.5 lakh. Since the main issue has been decided by the Tribunal, they rejected the prayer and held that no further modification is required in the impugned order by Commissioner (Appeals) with reference to the penalties. After considering the aforesaid, the learned Tribunal held that the products are liable to be classified as Ayurvedic medici....
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....and all ingredients are mentioned in the authoritative books on Ayurvedic medicines. It is not necessary that the product was manufactured in accordance with the formulae in the text book. To examine these aspects the matter was remanded. The Revenue took up the matter in appeal before the Supreme Court as Civil Appeal No.2127/88. The appeal was dismissed on 10.1.89. It should, therefore, be taken that the Supreme court has approved the two tests laid down in the decision of the Tribunal. 17. In the judgment of Allahabad High court in 1994 (19) STJ 150, even though Court considered a case which was under the provisions of the Sales Tax Act, the question which directly came up for consideration was whether 'Himtaj Oil' is a cosmetic or a medicinal oil. The Assistant Commissioner (Judicial) took the view that it is a medicinal oil and its main function is to relieve from pain. This view was reversed by the Tribunal. The High Court of Allahabad did not agree. It upheld the view taken by the Assistant Commissioner (Judicial) and observed as follows :- "There are many oil that are medicines used for massaging painful parts of the body. Such oils would naturally fall in the ca....
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....finding that since the Heading 33.05 refers to preparation for use on the hair, and therefore, the product can be brought under the above heading was not accepted by the Supreme Court. It was held that the Tribunal forgot that the product in question was intended as medicine for cuaring the disease Tinea versicolor and as such applied to skin wherever was necessary apart from curing dandruff by applying on the scalp. Therefore, the product cannot be brought under the heading preparation for use on the hair. The Court further noted the fact that the contents of the labels and the literature would show that the assessee had nowhere indicated that the product is to be used as a cosmetic or toilet preparation nor have they held it as a cosmetic product. Another reason given by the Tribunal in support of its conclusion namely that the product is sold with a pleasant odour, was also rejected by the Supreme Court. It was held that the addition of insignificant quantity of perfume to suppress the unpleasant odour of selenium sulfide would not take away the character of the product as a drug or medicine. We find that reasoning of the Supreme Court in the above case would apply on all fours ....