2005 (2) TMI 638 - AT - Central Excise

Summary

Issues:
1. Classification of products 'Skinelle Cream,' 'Skinelle Tablet,' and Gum Tone Powder under Chapter Heading 3003.39 of CET as Ayurvedic Medicines or under Chapter Heading 3306.90 as Cosmetics or Toilet Preparations.
2. Applicability of previous judgments regarding classification of similar products as Ayurvedic Medicines.

Analysis:

Issue 1: Classification of products under specific headings
The appeal challenged the correctness of the order classifying the products as Cosmetics or Toilet Preparations under Chapter Heading 3306.90 instead of Ayurvedic Medicines under Chapter Heading 3003.39 of CET. The Assistant Commissioner found the items to be Ayurvedic Medicines based on evidence like certificates from dealers and pharmaceutical industries. He noted the therapeutic effects of the products for skin and gum disorders, emphasizing their medicinal nature. Referring to relevant judgments, including the Supreme Court's decision in M/s. B.P.L. Pharmaceuticals Ltd. v. CCE, the Assistant Commissioner concluded that the products should be classified as Medicines under Chapter 30, not as Cosmetics under Chapter 33.

Issue 2: Applicability of previous judgments
The Commissioner (Appeals) set aside the Assistant Commissioner's order, citing a different judgment. However, the appellate tribunal analyzed the ingredients, manufacturing process, and therapeutic use of the products in question. Drawing parallels with previous cases like CCE v. Vicco Laboratories and Meghdoot Gramodyog Sewa Sansthan v. CCE, the tribunal found that the products were similar to those previously classified as Ayurvedic Medicines by the Supreme Court. By aligning with the precedent set in these cases, the tribunal held that the order of the Assistant Commissioner was legally sound and allowed the appeal, directing consequential relief.

In conclusion, the tribunal upheld the classification of 'Skinelle Cream,' 'Skinelle Tablet,' and Gum Tone Powder as Ayurvedic Medicines under Chapter Heading 3003.39 of CET, based on their therapeutic nature, ingredients, and manufacturing process. The decision was supported by previous judgments establishing similar products as Medicines rather than Cosmetics.