2004 (2) TMI 641 - AT - Central Excise

Summary

Issues Involved:
Classification of "Shankha Pushpi" and "Janam Ghunti" under Central Excise Tariff Act - Sub-heading No. 3003.31 or 3003.39.

Detailed Analysis:

Issue 1: Classification of "Shankha Pushpi" and "Janam Ghunti"
The main issue in the appeal was whether the products "Shankha Pushpi" and "Janam Ghunti" manufactured by M/s. Shree Baidyanath Ayurved Bhawan Ltd. should be classified under sub-heading No. 3003.31 of the Central Excise Tariff Act, as claimed by the appellant, or under sub-heading No. 3003.39, as confirmed by the Commissioner (Appeals) in the impugned order.

Analysis: The appellant argued that both products were in accordance with the formulae described in authoritative textbooks on Ayurveda specified in the First Schedule to the Drugs Act. They provided evidence such as licenses, certificates from relevant authorities, and expert opinions to support their claim. They contended that the products were classical Ayurvedic medicines manufactured as per the authoritative textbooks, satisfying all conditions prescribed in the Tariff Act for classification under sub-heading No. 3003.31. The appellant emphasized that the impugned products were manufactured exclusively according to the formulas in the authoritative textbooks.

Issue 2: Contention by the Department
The Department, represented by the Senior Departmental Representative, argued that the impugned products were not manufactured according to the formulas in the authoritative textbooks. They claimed that jaggery was added only as "quantity sufficient," and the ingredients were not mixed in equal quantity, thus asserting that both products were generic Ayurvedic medicines and not exclusively manufactured as per the authoritative texts.

Analysis: The Department's contention was based on the alleged discrepancies in the manufacturing process of the products, particularly regarding the quantity and mixing of ingredients. They argued that the appellant failed to establish that the products were manufactured exclusively according to the formulas in the authoritative textbooks, leading to the classification under sub-heading No. 3003.39.

Issue 3: Interpretation of Central Excise Tariff Sub-headings
The Appellate Tribunal examined the rival sub-headings of the Central Excise Tariff Act, specifically sub-heading No. 3003.31 and sub-heading No. 3003.39, concerning the classification of medicaments used in Ayurvedic systems.

Analysis: The Tribunal reviewed the requirements under sub-heading No. 3003.31, emphasizing that medicaments must be manufactured exclusively in accordance with the formulas described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act. The Tribunal highlighted the importance of selling the medicaments under the specified names in the authoritative books to meet the classification criteria.

Conclusion:
After considering the submissions from both sides, the Tribunal found that the impugned products, "Shankha Pushpi" and "Janam Ghunti," were classifiable under sub-heading No. 3003.31 of the Central Excise Tariff Act. The Tribunal concluded that the products were manufactured exclusively in accordance with the formulas described in the authoritative textbooks on Ayurveda, as supported by the evidence provided by the appellant. The Tribunal set aside the impugned order and ruled in favor of the appellant's classification under sub-heading No. 3003.31.