2004 (12) TMI 403 - AT - Central Excise

Summary

Issues Involved:
Classification of 'Alma Lio' manufactured by M/s. Zandu Pharmaceutical Works Ltd. as Ayurvedic Medicament under Heading No. 30.03 or as perfumed hair oil under Heading 33.05 of the Tariff.

Detailed Analysis:

Issue 1: Classification as Ayurvedic Medicament (Heading No. 30.03)
The Appellant argued that 'Alma Lio' is an Ayurvedic medicine due to its ingredients with medicinal properties, supported by certificates from medical practitioners, end-users, and traders. Reference was made to legal precedents where products with Ayurvedic ingredients were classified as Ayurvedic medicines. The Advocate contended that the product's classification as a medicament is not negated by being sold over the counter or by containing Sugandhi Dravya (perfume).

Issue 2: Classification as Perfumed Hair Oil (Heading 33.05)
The Respondent asserted that 'Alma Lio' is a preparation for use on hair, falling under Heading 33.05, based on the product's label description and the properties of its ingredients. Legal precedents were cited to support the classification of similar products as preparations for hair use rather than medicaments. The Respondent argued against the classification of 'Alma Lio' as a perfumed hair oil due to the absence of perfume usage by the Appellants.

Analysis and Conclusion:
The Tribunal analyzed the product's packaging, ingredients, and intended use to determine its classification. The product's description as a "Nutritive Hair Tonic" enriched with herbal ingredients aimed at promoting healthy hair growth, preventing dandruff, and nourishing the scalp. The Tribunal noted that while the product had some curative properties, it was primarily intended for hair care rather than therapeutic or prophylactic purposes.

Legal Interpretation:
The Tribunal emphasized that for a product to be classified as a medicament under Heading No. 30.03, it must primarily serve therapeutic or prophylactic uses. Products with Ayurvedic ingredients do not automatically qualify as medicaments; the main purpose must be curative or preventive. The Tribunal also highlighted the distinction between products for hair care and those for medicinal use, citing relevant legal provisions and precedents.

Final Decision:
The Tribunal classified 'Alma Lio' as a preparation for hair use under Heading 33.05, remanding the matter for duty computation under sub-heading 3305.10. The penalty under Rule 173Q of the Central Excise Rules, 1944 was set aside due to the classification declaration filed by the Appellants. The Appeal was disposed of based on the above findings.