1996 (9) TMI 611 - AT - Central Excise

Issues Involved:
1. Classification of Johnson's Prickly Heat Powder under the old and new Central Excise Tariff.
2. Classification of Phipps Processed Talc under the old Central Excise Tariff.
3. Admissibility of additional evidence and documents.
4. Impact of the Harmonized System Committee's recommendations.
5. Interpretation of the term "subsidiary pharmaceutical or antiseptic constituents" under the Central Excise Tariff.
6. Common parlance test for product classification.
7. Validity of directions issued under Section 37B of the Central Excises and Salt Act, 1944.

Detailed Analysis:

1. Classification of Johnson's Prickly Heat Powder:
The primary issue was whether Johnson's Prickly Heat Powder should be classified under T.I. 14E (Patent or Proprietary Medicines) or T.I. 14F (Cosmetics and Toilet Preparations) of the old tariff, and under sub-heading 3003.19 or 3304.00 of the new tariff. The Tribunal considered the composition of the product, which included salicylic acid, boric acid, and zinc oxide, and whether these ingredients provided the product with the essential character of a medicament. The Tribunal noted that the ingredients were present in quantities not significant enough to classify the product as a medicament. The Harmonized System Committee recommended classifying Johnson's Prickly Heat Powder under Heading 33.04, as it was deemed to have the essential character of a toilet preparation rather than a medicament.

2. Classification of Phipps Processed Talc:
The issue was whether Phipps Processed Talc should be classified under T.I. 14E or T.I. 14F(i) of the old Central Excise Tariff. The Tribunal upheld the classification under T.I. 14F(i), agreeing with the lower authorities that the product was more appropriately classified as a cosmetic or toilet preparation rather than a patent or proprietary medicine.

3. Admissibility of Additional Evidence and Documents:
The Tribunal allowed the Misc. Application No. E/296/93C to admit the opinion of CCCN Brussels as additional evidence, finding no objection from the respondents. Similarly, Misc. Application No. E/34/96C was allowed to admit documents including a certificate from the Drugs Controller and correspondence with the Central Excise authorities. However, Misc. Application No. E/Misc./35/96-C was rejected as the affidavit in question was not produced before the lower authorities, and admitting it would create a new ground without an opportunity for rebuttal.

4. Impact of the Harmonized System Committee's Recommendations:
The Harmonized System Committee's recommendations were crucial in determining the classification of the products. The Committee classified Johnson's Prickly Heat Powder under Heading 33.04, noting that the product had the essential character of a toilet preparation. The Tribunal gave significant weight to these recommendations, aligning the classification with international practices.

5. Interpretation of "Subsidiary Pharmaceutical or Antiseptic Constituents":
The Tribunal examined whether the pharmaceutical ingredients in the products were subsidiary or significant. The explanation under T.I. 14F was pivotal, indicating that products with subsidiary curative or prophylactic value should be classified as cosmetics. The Tribunal concluded that the quantities of boric acid, salicylic acid, and zinc oxide in Johnson's Prickly Heat Powder were not significant enough to classify the product as a medicament.

6. Common Parlance Test:
The Tribunal applied the common parlance test, considering how the product was perceived by the general public. It was observed that Johnson's Prickly Heat Powder was available in general stores, did not require a doctor's prescription, and was used primarily as a preventive measure against prickly heat. This supported the classification of the product as a cosmetic or toilet preparation rather than a medicament.

7. Validity of Directions under Section 37B:
The Tribunal upheld the validity of directions issued under Section 37B of the Central Excises and Salt Act, 1944, which classified Johnson's Prickly Heat Powder under Heading 33.04. The Tribunal found no legal infirmity in these directions, affirming the government's competence to issue such orders.

Conclusion:
The Tribunal concluded that Johnson's Prickly Heat Powder and Phipps Processed Talc should be classified under T.I. 14F(i) of the old tariff and Heading 33.04 of the new tariff, respectively. The appeals were disposed of accordingly, with the Tribunal emphasizing the importance of the Harmonized System Committee's recommendations and the subsidiary nature of the pharmaceutical ingredients in the products.

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