TaxTMI 
TaxTMI 
2021 (1) TMI 590
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....on of diseases or disorder in human beings, animals and manufactured exclusively in accordance with the formulae described in authoritative books of ayurvedic/ siddha and Unani Tibb system of medicine, specified in the First Schedule. 3. On going through the HSN specified for the Mosquito Repellent, they have found 30049011 for Ayurvedic Medicaments. However, for Mosquito Repellent, they have also found HSN 38089191. 4. Now, they are not in a position to classify the same under which of the heading same may be classified and, therefore, they have filed this Advance Ruling application to avoid the future litigations and long appeal procedures. Grounds of Application: 5. They are going to start the manufacturing of the above product and as earlier stated that they are classifying the same under the tariff heading 3004 as they are considering it as a 'Ayurvedic product' and classifiable under the tariff sub heading 3004. 6. As they all know that main aim of GST is One Nation, One Tax and One Market and which will create the healthy competition in the market and every seller is selling the same product at same price so that the consumer will get benefit of the same. 7....
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....ut processed extracts. The process is finally ended with a process for binding these molecules into colloids and converting them into Nano particles of 2-50 nano meters for far greater affectivity. This would form a totally natural, non-toxic, biodegradable and a noncarcinogenic, food grade and Ayurved certified (certification attached) mosquito repellent, AAYUDH-MOSX. 9. Relevant Portion of Chapter 3004 reproduced hereunder: 30.04 MEDICAMENTS (EXCLUDING GOODS OF HEADING 30.02, 30.05 OR 30.06): CONSISTING OF TWO OR MORE CONSTITUENTS WHICH HAVE BEEN MIXED TOGETHER FOR THERSPEUTIC OR PROPHYLACTIC USES, PUT UP IN MEASURED DOSES (INCLUDING THOSE IN THE FORM OTTHOSE IN THE FORM OF TRANSDERMSL ADMINISTRATION SYSTEMS) OR IN FORMS OR PACKAGING FOR RETAIL SALE. 3004.90- Other ----of Ayurvedic, Unani, Homeopathic, Siddha or Bio-chemic systems Medicaments-put up for Retail Sale; 30049011- of Ayurvedic System. The heading also excludes: (a)---------------- (b)---------------- (c) --------------- (d)--------------- (e) Insecticides, disinfectants, etc., of heading 38.08, not put for internal or....
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....al repellent that will last up to 6 hours per application it is hoped that mixing lemon grass oil with other herbal oils like neem, eucalyptus, etc.. It is recommended in the said research paper that people should consider the use of lemon grass oil as mosquito repellent apart from using chemical based repellents. 13. Applicant has also got tested the said product with Saurashtra University, Central of Excellence, Government of Gujarat and they have studied Herbal Nano Particles manufactured by applicant and it has been concluded that Herbal Nano Particles manufactured by Applicant based computational docking and simulation studies against mosquito protein shows it can work as Repellent and Larvicide both. (Research study also submitted by them, as Annexure-F). 14. Relevant Portion of Chapter 38.08: 38.08 INSECTICIDES, RODENTICIDES, FUNGICIDES, HERBICIDES, ANTI - SPROUTING PRODUCTS AND PLANT-GROWTH REGULATORS, DISINFECTANTS AND SIMILAR PRODUCTS, PUT UP IN FORMS OR PACKINGS FOR RETAIL SALE OR AS PREPARATIONS OR ARTICLES (FOR EXAMPLE, SULPHUR-TREATED BANDS, WICKS AND CANDLES, AND FLY-PAPERS) (+). 15. They have also referred Chapter heading 3808 91 91 Repell....
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.... (II) Fungicide ----------- (III) Herbicide ------------ (IV) Disinfectants ---------- This heading excludes: (a)--------- (ii) --------- (iii) --------- (iv) --------- (vi) --------- (b)---------------------- (i) --------- (ii) -------- (iii) --------- (c) Disinfectants, insecticides, etc., having the essential character of medicaments, including veterinary medicaments (heading 30.03 or 30.04). (d) --------------." 18. By going through both the Chapters Viz. 3004 and 3808 it is to state that product if having the medicinal properties and having the therapeutic or prophylactic uses, the same may be classifiable under heading 3004. Furthermore, by going through chapter 3004, it has been given that heading covers medicinal preparations for use in internal or external treatment or prevention of human or animal ailments. Product AAYUDH-MOSX is used for the external treatment for prevention of the body from being infected by the bite of the mosquitos. 19. Further, they have taken the report of the laboratory named Accuprec Re....
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....s used as a medicine and is known as a medicine, in my opinion." 19.3 By going through the above, it can be said that AAYUDH-MOSX is also a Medicament used to prevent the body from being infected by the bite of the mosquitoes and, therefore, same is also a medicine merit classification under the heading 3004 as like ODOMOS. 20. Further, they have also taken the certification from the Ayurveda that it is an Ayurvedic product. Furthermore, AAYUDH-MOSX is prepared from Ayurvedic ingredients and having Therapeutic or Prophylactic uses and, therefore, the same is classifiable under heading 3004. 21. Further, by going through the heading and chapter notes 1 (d) of chapter Heading 38.08, it clearly mentioned that heading covers range of products other than those having character of medicaments, deluding veterinary medicaments of heading 30.03 or 30.04. 22. Product AAYUDH-MOSX is having the Character of medicaments and, therefore, they are of the considered opinion that the same is classifiable under heading 30.04. 23. In view of the above, they want to rely on some of the Case Laws in which the product is prepared from Ayurvedic ingredients and having therapeutic or Prophyl....
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.... At the time of personal hearing held through Video Conferencing on 17.08.2020, the Authorised Representative of the applicant, Rushi Ashokbhai Upadhyay, reiterated the facts as stated in the Application. 27.1 Further, the applicant has furnished an additional submission dated 19.08.2020 wherein they stated that during the course of PH, they have relied upon the decision of State of UP v. Malik Zarid Khalid (AIR 1988 SC 132) which has been referred in case of Shree Baidyanath Ayurved Vhavan Ltd. V. Commissioner-2003 (157) E.L.T. A260 (S.C.) and it has been asked to submit the same. In this regard, the applicant stated that Shree Baidyanath case has been finally decided by the Supreme Court reported at 2009 (237) E.L.T. 225 (S.C.) and same has been distinguished vide decision in the case of Commissioner of Central Excise V. Wockardt Life Science Ltd., reported at 2012 (277) E.L.T. 299 (S.C.), while deciding the issue Supreme Court had held as under: "HELD : Purpose of use was primarily prophylactic and to prevent infection or disease - In that view, it was classifiable as medicament under Heading 3003 of Central Excise Tariff, a specific entry and not under sub-heading 3....
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....fore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 29. In the instant case, the applicant has sought advance ruling in respect of following question: 30. On going through the submission given by the applicant, we find that the applicant is engaged in the manufacturing of Mosquito Repellent, named as "AAYUDH-MOSX". 31. The applicant has submitted that: (i) the product, AAYUDH-MOSX is a certified Ayurvedic mosquito repellent. Unlike other mosquito repellents available in the market, AAYUDH-MOSX is made from all-natural plant extracts and does not contain DEET (N, N-Diethyl-meta-toluamide); (ii) the said product is manufactured from natural extracts, viz. Coconut extracts, Sugar Cane extracts, Corn extracts, Lemongrass oil, Citronella oil, EDTA & Water, which is also certified by the Food and Drug Control Department, Gandhinagar; (iii) the manufacturing process of said product is as below: The Corn, Sugarcane and Coconut Extracts are blended in a sequence at varied temperatures and pressures to ensure an even mix. Palm ....
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....hat the product in question i.e. 'AAYUDH-MOSX' is a Ayurvedic mosquito repellent made from all-natural plant extracts and does not contain DEET (N, N-Diethyl-meta-toluamide). Said product is used for prevention of the body from being infected by the bite of the mosquitos. The applicant refers Section 3(a) of the Drugs and Cosmetics Act, 1940 defines "Ayurvedic, Siddha or Unani drug". 33. The definitions of terms in statutes having different objectives, purposes and schemes cannot be applied mechanically to fiscal statutes. The Hon'ble Supreme Court in the case of Commissioner of Central Excise, Nagpur v. Shree Baidyanath Ayurved Bhavan Limited, reported at (2009) 12 SCC 419 held thus: "55. True it is that Section 3(a) of the Drugs and Cosmetics Act, 1940 defines "Ayurvedic, siddha or unani drug" but that definition is not necessary to be imported in the new Tariff Act. The definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute. As stated above, the object of the Excise Act is to raise revenue for which various products are differently classified in the new Tariff Act." 34. By drawing inference from ....
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....) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 41. The relevant entries under Heading 3808 of the Customs Tariff Act are as under: Tariff Item Description of goods 3808 Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products 3808 91 91 Repellents for insects such as flies and- mosquitoes 42. The tariff heading, being favoured by the applicant is reproduced hereunder: Tariff Item Description of goods 3004 Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration sys....
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....oduct in question is a neat fit into the description of products laid down therein. No laboured process of reasoning is required since the heading No. 38089191, is clear as day light. 47. The invocation of the general entry called "others" by the applicant is clearly misconceived, since the product in question is covered by a specific description in the heading under which the product has been classified. 48. The preceding discussion establishes that all attributes of mosquito repellents relevant for a judicial enquiry of this nature are found in the product in question. 49. The reliance placed by the applicant on the judgment of the High Court rendered in the case of Commissioner of Sales Tax Vs. M/s S.S. Balsara Hygiene Products Limited, reported at 1986 UPTC 367 (All.), wherein Odomos has been held as a medicine, is misplaced. The entry which was under consideration before said Court in M/s Balsara Hygiene Product Limited (supra) issued under Section 3 of the Uttar Pradesh Sales Tax, 1948 and reads as "Medicines and pharmaceutical preparations including insecticides and pesticides. The said entry included insecticides and pesticides within the broader category of medici....
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....53. We further note that the product, 'AAYUDH-MOSX' is not known in the market as an 'Ayurvedic medicine' and the same is also not ordinarily prescribed by a Physician as a medicine for prevention of the body from being infected by the bite of the mosquitos. 54. It is pertinent that mosquito repellents are classified at Heading No. 3808 91 91 of the Customs Tariff as a subcategory of insecticides. Thus, this again indicates that Heading No. 3808 91 91 is most specific for the classification of the subject product. 55.1 We have also perused the case laws cited by the applicant. In the case of M/s Global Tele Mall Vs Union of India, reported at 2018 (18) G.S.T.L. 227 (M.P.), the dispute before High Court of MP was related to categorization of the goods, viz. "Kashyog Oil and Keshyog Herbal Powder Hair Wash/Shampoo" either as Ayurvedic medicine or cosmetic/toilet preparation and whether or not the processes undertaken by the vendor will amount to manufacture. Hence, ratio of this case is not applicable to the case before us being facts are distinguishable. 55.2 In the case of Commissioner of Central Excise Pondicherry Vs Vale Exports (P) Ltd. reported at 2018 (359) E.L.T. 211....