1985 (7) TMI 356 - AT - Central Excise

Issues Involved:
1. Classification of Dant Manjan, Surma, and Kajal under the Central Excise Tariff.
2. Applicability of Notification No. 62/78 for exemption from excise duty.
3. Validity of the show cause notice.
4. Limitation period for the demand of duty.
5. Imposition of penalty.

Detailed Analysis:

1. Classification of Dant Manjan:
The appellants argued that Dant Manjan is an Ayurvedic medicine, citing its ingredients and certifications from Ayurvedic experts. However, the Tribunal held that Dant Manjan is not an Ayurvedic drug or medicine but a toilet requisite classifiable under item 68 CET, referencing the Supreme Court's decision in Sarin Chemical Laboratory v. Commissioner of Sales Tax, U.P. The Tribunal confirmed that Dant Manjan is used for dental cleanliness, an act of daily toilet, and thus not entitled to the exemption under Notification No. 62/78.

2. Classification of Surma:
The Tribunal previously held in related appeals that Surma is a patent or proprietary medicine falling under Tariff Item 14E CET but excluded from duty as an exclusively Ayurvedic drug. The Tribunal reiterated that the product is sold in the market as an Ayurvedic medicine, bearing the name Baidyanath and the symbol of 'Shivling'. The Tribunal set aside the Collector's order regarding Surma, confirming it as an Ayurvedic drug and thus exempt from duty under Notification No. 62/78.

3. Classification of Kajal:
The appellants claimed Kajal as an Ayurvedic medicine, but the Tribunal found no material evidence to support this. Kajal, commonly used for beautification, does not fit the definition of a drug or medicine under the Drugs and Cosmetics Act, 1940. The Tribunal held that Kajal is not manufactured according to any Ayurvedic formula and is not recognized as a treatment for eye ailments. Consequently, Kajal was classified under item 68 CET and not entitled to the exemption under Notification No. 62/78.

4. Validity of the Show Cause Notice:
The appellants contended that the show cause notice lacked material evidence and was based on assumptions. However, the Tribunal did not address this issue in detail, focusing instead on the classification and exemption eligibility of the products.

5. Limitation Period for Demand of Duty:
The Collector of Central Excise restricted the demand for duty to six months prior to the issuance of the show cause notice, adhering to the limitation period under section 11A of the Central Excises and Salt Act, 1944. The Tribunal upheld this limitation period.

6. Imposition of Penalty:
The appellants argued against the imposition of penalties, but the Tribunal did not specifically address this issue in the judgment, focusing on the classification and exemption aspects.

Conclusion:
The Tribunal concluded that Dant Manjan and Kajal are classifiable under item 68 CET and are not entitled to the exemption under Notification No. 62/78, as they are neither drugs nor medicines. However, the Tribunal set aside the Collector's findings regarding Surma, classifying it under item 14E CET and confirming it as an Ayurvedic medicine eligible for exemption. The appeal was disposed of accordingly.

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