TaxTMI 
TaxTMI 
2018 (4) TMI 811
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....l sale and entirely correspond to the description of goods under HSN 3004 [serial no. 63 of Notification No. 1/2017-CT(Rate) dated 28/06/2017], and, therefore, taxable under Schedule II. 3. The Applicant has submitted a list of these 33 manufactured products and their description as per the product label for review in Annexure X of their submission, which is given below: Name of the product Nature of the product Description Baranga Face & Body Grain Brightens the skin all the more without black heads, pimples and scars Tanuruchi Face Pack for Oily Skin Control excessive oil secretion and takes care of scar free face Twakamadhuri Face Pack for Normal & Dry Skin Keeps skin glossy without freckles and spots Subarna Face Wash for Oily Skin Removes dead cells and black heads for oily skin Angarag Black Patch Pack Beautifies the skin of sun-burn and black patches, ensures dazzling liveliness. Enhances glamour and beauty Rupam Pimple Pack Glossy skin without pimples and rashes Tanurima ....
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....he natural protection of the skin. Instantly enhances glow and fairness. Improves the skin texture of skin and body Nabaroop (Neem) Face & Body Wash Properly cleanses, exfoliate and moisturizes the skin. Helps for removing make-ups and sunscreen which, clog pores. Strengthens the natural protection of the skin. Instantly enhances glow and fairness. Improves the skin texture of skin and body Nabaroop (Orange) Face & Body Wash Properly cleanses, exfoliate and moisturizes the skin. Helps for removing make-ups and sunscreen which, clog pores. Strengthens the natural protection of the skin. Instantly enhances glow and fairness. Improves the skin texture of skin and body Swarnali Fairness Cream Improve the skin complexion. Removes acne, pimples, black spot, black heads, hyper pigmentation. Make the skin glossy and shiny Tanujjal Fairness Face and Body Scrubber Gently scrubs away skin scars, white & black heads, dead cells, makes skin smooth, healthy and glowing Twaka Snigdha (Lemon) Skin Toner Helps in the normal firming and toning of skin along ....
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.... puffiness of the skin around the eyes. Softens fine lines and removes wrinkles 4. The Applicant refers to the ruling of the Authority for Advance Ruling, Central Excise, Customs & Service Tax, New Delhi (hereinafter the AAR) [2009 (248) ELT 932 (AAR)] in the matter of M/s Guthy Renker Marketing Pvt Ltd. The petitioner therein was the Indian subsidiary of a Mauritius based company and intended to import revitalising toner, repairing lotion, cleanser, and refining mask of 'Proactive' brand. According to the petitioner, the cleanser and the repairing lotion contain almost 2.5% Benzoyl Peroxide as an ingredient, which has immense potential to cure acne. The fourth product, namely the mask, contains 6% sulphur as an ingredient, which too has therapeutic value. The first product, namely the toner, does not contain any active ingredient for curing the disease but is used for cleansing the skin as an aid to acne treatment. The petitioner sought an Advance Ruling on commodity Classification. After that, the AAR refers to several decisions of the Apex Court that have laid down common parlance as the appropriate test for determining the meaning or connotation of words or express....
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....main cosmetic." The Supreme Court further observes that preparations falling under heading 3304 are primarily beauty or makeup preparations. They may incidentally help in protection against skin irritants. They may help as a skin tonic, yet they are cosmetics because skin protection is a subsidiary benefit. 8. The AAR, therefore, concludes that the test to be applied for determining whether the goods which fall broadly within the description of skin care preparations are to be classified as medicaments is whether they are intended primarily for use in the treatment of skin disorder or diseases and whether the ingredients therein have sufficient therapeutic value. If the potential of a product as a medicament to cure any skin ailments is not clear or is not established, it cannot be placed under Chapter 30 as a Medicament. 9. The AAR's observations are primarily based on Puma Ayurvedic Herbal Pvt Ltd [2006 (196) ELT 3 (SC)]. In its written submission the Applicant also refers extensively to the above judgment, which has traversed the history of Supreme Court's observations on the related questions and issues while deciding upon the classification of the petitioner's skin care ....
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....textbooks. They are manufactured as per the Ayurveda pharmacopoeia and had curative, therapeutic or prophylactic value. They were meant to give relief from body ailments. As such, all ingredients were Ayurvedic raw material. Besides this, the evidence produced by the appellant before the authorities in the shape of letters from consumers, from doctors and from Ayurvedic physicians, according to the Apex Court, satisfied the common parlance test. The Court refers to Richardson Hindustan Ltd. [1989 (42) ELT A100], where the court has held that the articles enumerated in the tariff schedules must be construed as far as possible in their ordinary or popular sense, that is, how the common man and persons dealing with it understand it (emphasis added). If the customers and the practitioners in Ayurvedic medicine, the dealers and the licensing officials treat the products in question as Ayurvedic medicines that fact gives an indication that they are exclusively Ayurvedic medicines or that they are used in the Ayurvedic system of medicine. This is especially so when all the ingredients used are mentioned in the authoritative books on Ayurveda. From the above and other judgments, the Apex C....
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....arlance in the commercial world. 14. In subhead 3004 the emphasis is on therapeutic or prophylactic uses. Even if a product is manufactured using ingredients and according to the formula prescribed in the authoritative textbooks of Ayurveda, it should not be classified as a medicament under heading 3004 unless it is meant for therapeutic or prophylactic uses. In other words, it is not sufficient that a skin care preparation, manufactured following a formula in an authoritative textbook of Ayurveda, helps in controlling skin disease. Its curative or preventive value must be substantial, and the product must be manufactured primarily to control or cure a skin-related disease, and the consumers use it primarily for treatment, mitigation, cure or prevention of specific skin disease or skin disorder. 15. Note 1 (e) to Chapter 30 states that the Chapter does not cover preparations of headings 3303 to 3307, even if they have therapeutic or prophylactic properties. In the present context, it means a skin care preparations, if it otherwise falls under heading 3304, shall be excluded from Chapter 30, even if it has therapeutic or prophylactic properties. But what should be the yardstic....
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....ed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings of a kind sold by retail for such use." Note 5 to Chapter 33 of the Tariff Act does not exist anymore. It, therefore, appears that the phrase 'suitable for use as goods of these headings and put up in packings with labels literature or other indications that they are for use as cosmetics or toilet preparations (emphasis added) or put up in a form clearly specialized to such use and includes products whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary (emphasis added) curative or prophylactic value' in Note 2 to Chapter 33 and also the Note 5 do not exist for the purpose of the GST Act. 18. Conclusions reached in Puma Ayurvedic Herbal Pvt Ltd (supra) and followed by the AAR in M/s Guthy Renker Marketing Pvt Ltd [2009 (248) ELT 932 (AAR)], based on earlier constructions of Notes 2 and 5 to Chapter 33 in the Excise Tariff Act, 1985 are, therefore, need to be revisited in the context of the GST Act. In the absence of the restrictive phrases attributed to Notes 2 and 5 to Chap....
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....ptions indicating that several products are being prescribed by the medical practitioners. A CD containing video and also the English transcript of a popular TV programme where consumers are describing their experience in using a few of the products, is also submitted. Finally, the Applicant has submitted the labels containing a description and use of the products and physical samples. 21. The label contains indication and method of use for each of the products. They are compared with the indication as per the list provided in the application. The prescriptions and also information available in the English Transcript are taken into account wherever relevant, subject to the limitation that the CD contains only snippets of different episodes of a TV show where the users are uniformly endorsing the Applicant's products as showing good results. It is not clear whether the 'good results' relate to enhancing appearance of the skin or treatment of a disease. We are not to involve ourselves in examining efficacy of the Applicant's products. Our focus will be to ascertain from available materials what the Applicant is offering and consumer is using. A more objective way to examine it is ....