2011 (4) TMI 157 - AT - Central Excise

Chapter Sub Heading - Revenue claimed that the products are nothing but sugar confectionery and classifiable under Chapter Sub Heading No. 1704.90. Held that - The products Lakerol strong and Lakerol spearmint classifiable as Ayurvedic medicine under Chapter Sub Heading No. 3003.39 in view ofthe case of Naturalle Health Products (P) Ltd. Vs. CCE, Hyderabad (2003 -TMI - 46703 - SUPREME COURT OF INDIA) - Hence, appeal is allowed in the favour of assessee

Summary

Issues:
Classification of products Lakerol strong and Lakerol spearmint as Ayurvedic medicine under Chapter Sub Heading No. 3003.39 versus classification as sugar confectionery under Chapter Sub Heading No. 1704.90.

Analysis:
The judgment by the Appellate Tribunal CESTAT, CHENNAI involved a dispute over the classification of products Lakerol strong and Lakerol spearmint. The Revenue appealed against the Commissioner (Appeals) order, which accepted the assessees' contention that the products should be classified as Ayurvedic medicine under Chapter Sub Heading No. 3003.39. The Revenue argued that the products were sugar confectionery and should be classified under Chapter Sub Heading No. 1704.90.

Upon hearing both sides, the Tribunal noted that the products were manufactured under license for Ayurvedic products and contained ingredients such as Sugar, Glucose, Pudina Swarasam, and Nilgiri Tailam with prophylactic or therapeutic uses. Referring to the case of Naturalle Health Products (P) Ltd. Vs. CCE, Hyderabad, the Tribunal highlighted a Supreme Court judgment that held similar products as Ayurvedic medicines under Sub Heading 3003.30 when manufactured under license issued under the Drugs and Cosmetics Act, 1940.

The Tribunal also considered a previous order by the Assistant Commissioner, where the same products were classified as Ayurvedic Medicines under Chapter Sub Heading No. 3003.39 for a sister unit of the same assessee. This order had become final with no appeal filed against it by the department. Based on these precedents and discussions, the Tribunal concluded that there was no justification to interfere with the Commissioner (Appeals) order. Consequently, the Tribunal upheld the decision and rejected the appeal filed by the Revenue.

In summary, the judgment emphasized the importance of manufacturing under license for Ayurvedic products, the ingredients and therapeutic uses of the products in question, and the relevance of previous classification decisions for similar products. The Tribunal's decision was based on legal precedents and consistency in classification, ultimately affirming the classification of the products as Ayurvedic medicine under Chapter Sub Heading No. 3003.39.