2014 (12) TMI 1028 - AT - Central Excise

Waiver of pre deposit - Classification of product - Classification of Aswini Homeo Arnica Hair Oil - Classification as oil or medicament - Held that - Product manufactured by the appellants is a medicament and they have a drug licence issued by the appropriate statutory authority who has recognized it as a drug. Further he also submits that no evidence has been brought out by the Revenue to take the stand that it is not recognized as a medicament but used as hair oil - product manufactured by assesse contains 4 homeopathic medicaments as ingredients namely Arnica Mount, Cantharis, Pilocarpin and Cinchona. Drugs help in preventing hair fall and dandruff. He also produced a sample bottle of the drug. On going through the label we find that it has been stated that the oil prevents hair fall and dandruff. Further it also states that it has to be applied to the scalp and left overnight. Learned counsel also submitted that it does not have any perfume added. - two facts mentioned namely, absence of perfume and the advice that it should be used for massaging the scalp and left overnight. And the fact that there is no advice that it can be used as hair oil would go in favour of the appellant. The common understanding of the hair oil is somewhat different. In our opinion this is what makes the item before us as distinct product. Therefore the claim of the appellant that it is only a medicament and is not meant to be hair oil has substance - appellant has made out a prima facie case for waiver - Stay granted.

Summary

Issues: Classification of product as cosmetic or medicament, waiver of pre-deposit

Classification Issue Analysis:
The appellant, engaged in manufacturing homeopathy medicines, faced proceedings regarding the classification of 'Aswini Homeo Arnica Hair Oil' as either a cosmetic or a medicament under CETH 33. The appellant argued that the product should be classified as a medicament, supported by the presence of homeopathic medicaments like Arnica Mount, Cantharis, Pilocarpin, and Cinchona, which aid in preventing hair fall and dandruff. The product label indicated usage for preventing hair fall and dandruff, without mentioning it as a hair oil. The absence of perfume and the recommendation to apply it to the scalp and leave it overnight supported the appellant's claim. The Tribunal found these distinctions significant, making the product a distinct medicament rather than a conventional hair oil. The appellant also presented evidence of financial difficulties, further strengthening their case for classification as a medicament.

Waiver of Pre-Deposit Analysis:
The appellant contended that previous final decisions had accepted the classification as a medicament, and the current reopening of the issue was unjustified. The Tribunal acknowledged the need for a detailed examination of past cases and records, which was not feasible at that stage. Considering the unique factors of the case and the distinctions from cited precedents, the Tribunal found that the appellant had established a prima facie case for waiver of pre-deposit. Consequently, the requirement for pre-deposit was waived, and a stay against recovery was granted for 180 days from the date of the order, providing relief to the appellant during the ongoing proceedings.

This judgment from the Appellate Tribunal CESTAT Bangalore delves into the intricate classification issue of a product manufactured by the appellant, emphasizing the presence of homeopathic medicaments and usage indications to differentiate it from a cosmetic product. Additionally, the decision to waive pre-deposit showcases the Tribunal's consideration of the unique circumstances and the appellant's prima facie case, ensuring a fair approach to the ongoing dispute.