2013 (6) TMI 612 - AT - Central Excise

Classification - sensur Rubefacient & Herbyl Skin Ointment - under 3003.39 of CETA 1985 as Ayurvedic Medicine claimed by the appellant or under 3003.10 of the CETA 1985 as P. or P Medicines (other than Ayrvedic Medicines) as claimed by the Revenue. - Held that - The nature of the product and how it is perceived by the buyers is also required to be gone into for proper appreciation of the issue. As these details are required to be gone into at the time of regular hearing, we are of the opinion that appellant has not made out a prima facia case for complete waiver and are required to be put to certain conditions. Appellants directed to deposit an amount of Rs. 25 lakh - stay granted partly.

Summary

Issues involved:
Classification of the product "sensur Rubefacient & Herbyl Skin Ointment" under CETA 1985 as Ayurvedic Medicine or P. or P Medicines.

Analysis:

1. Classification Issue:
The stay application was filed concerning the classification of the product "sensur Rubefacient & Herbyl Skin Ointment" under CETA 1985 as Ayurvedic Medicine or P. or P Medicines. The appellant claimed the product should be classified as Ayurvedic Medicine, citing references from Sanskrit/Indian languages and Ayurvedic literature. They argued that all ingredients, even those alleged to be allopathic, are known in Ayurvedic science. The appellant relied on various case laws to support their classification claim. On the other hand, the Revenue argued for a different classification based on circulars and previous judgments. The issue revolved around whether the ingredients in the product, including synthetic ones, could be considered of Ayurvedic origin and if the product should be classified as Ayurvedic Medicine. The Tribunal noted the importance of understanding how the product is perceived by buyers and directed the appellant to make a deposit while the appeal is pending.

2. Legal Interpretation:
The Tribunal considered the arguments presented by both sides regarding the classification of the product. The appellant emphasized the Ayurvedic nature of the ingredients, while the Revenue highlighted the therapeutic value of synthetic chemicals in the product. Reference was made to previous court judgments to support both positions. The Tribunal examined the issue of synthetic materials naturally found in Ayurvedic preparations and the distinction between extracts derived from herbs and directly purchased synthetics. The relevance of CBEC circulars and the perception of the product by consumers were also taken into account in determining the classification. The Tribunal found that the appellant had not established a prima facie case for complete waiver and imposed conditions, including a deposit, pending the appeal's disposal.

3. Decision and Order:
After thorough consideration of the arguments and legal precedents cited by both parties, the Tribunal concluded that the issue at hand required further examination during regular hearings to determine the proper classification of the product. The appellant was directed to make a deposit within a specified period and report compliance to the Deputy Registrar. The Tribunal ordered that the remaining duties and penalties would be stayed pending the appeal's final resolution. The decision was pronounced in court on a specific date.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, the Tribunal's interpretation of the law, and the final decision and order issued in the case regarding the classification of the product under CETA 1985.