2003 (7) TMI 606 - AT - Central Excise

Summary

Issues:
Demand of duty after finalization of provisional assessment for the product "FACE-TO-FACE" cream.

Analysis:
The issue in this appeal revolves around the demand of duty post finalization of provisional assessment for the "FACE-TO-FACE" cream. The Assistant Collector, in finalizing the provisional assessments, considered the nature of the product, HSN Notes, and advertising literature emphasizing the product's use for skin care. The Tribunal's decision in a similar case regarding the classification of a product as a cosmetic preparation for skin care was cited to support this view. On the contrary, the Commissioner (Appeals) opined that the product was a medicament based on project literature and extracts from books indicating medicinal uses. However, this finding lacked reasoning and failed to conclusively establish the product's therapeutic nature.

Regarding the classification of the entity under Chapter 30 or Chapter 33 of the CETA 1985, certain principles were laid down. The definition of medicine, prescription by medical practitioners, limited usage period, and common perception were highlighted. The product in question was recommended to medical practitioners, but evidence of prescription and specific usage instructions were not adequately considered. The distinction between therapeutic or prophylactic uses as the main purpose for classification as a medicament was emphasized. Merely mentioning ingredients from Ayurvedic texts did not automatically categorize the product as a medicament, as per the relevant Chapter notes.

Consequently, the Tribunal remitted the proceedings back to the original authority for reevaluation based on additional evidence presented by the appellants regarding doctor prescriptions. It was emphasized that the correct classification should be determined following the prescribed tests by the Apex Court and the facts of the case. The issue of provisional assessment, not related to classification, was clarified to be of no assistance to the respondents. The orders were set aside, the Revenue appeal was allowed, and the matter was remanded for a reevaluation of classification and any consequential duties.

In conclusion, the judgment focused on the proper classification of the "FACE-TO-FACE" cream as either a cosmetic preparation for skin care or a medicament based on therapeutic or prophylactic uses. The decision highlighted the importance of evidence of medical prescriptions, specific usage instructions, and the main purpose of the product in determining its classification under the relevant Chapters of the CETA 1985.