2006 (1) TMI 309 - AT - Central Excise

Summary

Issues:
Classification of the product SELSUN BLUE under Tariff Heading 3003.10 as a "medicament" or under Tariff Heading 3305.99 as a "preparation for use on the hair."

Analysis:
The issue in the present Appeals revolves around the classification of SELSUN BLUE, a product claimed to have therapeutic value in treating diseases of the scalp. The appellants argue that the presence of Selenium Sulfide in a 1% concentration imparts therapeutic properties to the product, classifying it under Tariff Heading 3003.10 as a "medicament." On the other hand, the department contends that SELSUN BLUE should be classified under Tariff Heading 3305.99 as a "preparation for use on the hair." The appellants also manufacture SELSUN with Selenium Sulfide in a 2.5% concentration, which has been previously classified as a medicament by the Hon'ble Supreme Court.

The Department challenges the classification claimed by the Appellants based on two main grounds. Firstly, they argue that the lower concentration of Selenium Sulfide in SELSUN BLUE compared to SELSUN affects its classification as a medicament. Secondly, they highlight that SELSUN BLUE is sold over the counter without the sole requirement of a prescription from a Registered Medical Practitioner.

In response, the Appellants present various arguments to support their classification claim. They refer to the US Pharmacopoeia, which prescribes therapeutic quantities of Selenium Sulfide ranging from 1% to 2.5%, supporting the classification of SELSUN BLUE as a medicament. The appellants also emphasize that SELSUN BLUE is manufactured under a Drugs License and is prescribed by Registered Medical Practitioners for treating specific scalp conditions.

Moreover, the appellants rely on authoritative texts and judgments to establish that SELSUN BLUE is recognized as a product containing Selenium Sulfide in therapeutic quantities. They argue that the understanding of trade and commerce supports the classification of SELSUN BLUE as a medicinal preparation. Additionally, they cite a judgment of the Hon'ble Supreme Court emphasizing that the main criteria for classification is the product's use by customers, which in this case, supports the classification as a medicament.

After considering arguments from both sides, the Tribunal rules in favor of the Appellants. They hold that SELSUN BLUE, containing Selenium Sulfide in a concentration mentioned in the US Pharmacopoeia, should be classified as a medicament under Tariff Heading 3003.10. The Tribunal cites previous decisions of the Hon'ble Supreme Court and the pharmacological properties of the product as key factors in their classification decision, ultimately setting aside the department's order and granting the appeals in favor of the Appellants.