2018 (2) TMI 1723 - AT - Central Excise

Classification - KRISHNA THULASI HAIR TONIC - whether the product is ayurvedic medicated hair oil and falls under the chapter 3003.20 or would fall under the sub-heading 3305? - Held that - it appears that the Commissioner (Appeals) has examined and discussed the ingredients and brought the same under Chapter 30 of the Central Excise Tariff Act, 1986. As per the description of the product under consideration, it was meant for the dandruff, premature graying and split ends can be cured. The Drug Controller and Licensing Authority has considered the same as Ayurvedic medicine - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of product under Central Excise Tariff Act, 1986

Analysis:
The appeal was filed against Orders-in-Appeal No. 24 to 26/2008 dated 18/02/2008. The appellant was engaged in manufacturing "KRISHNA THULASI HAIR TONIC" during the period from 01/04/2004 to 31/03/2005. The appellant claimed the product falls under chapter 3003.20 as an ayurvedic medicated hair oil, while the Department contended it falls under sub-heading 3305, demanding duty. The case involved a dispute over the classification of the product under the Central Excise Tariff Act, 1986.

During the hearing, both parties presented their arguments. The Tribunal noted that different companies manufacture hair oil with various flavors and components. Referring to past Supreme Court judgments, it was observed that some cases favored the appellant, considering hair oil as an Ayurvedic product, while others favored the Department. Notably, the Supreme Court in cases like Dabur India Ltd. vs. CCE, Jamshedpur and Puma Ayurvedic Herbal Pvt. Ltd. vs. CCE, Nagpur, had differing opinions on the classification of similar products.

The Commissioner (Appeals) had classified the product under Chapter 30 of the Central Excise Tariff Act, 1986, based on the ingredients and its intended use for treating dandruff, premature graying, and split ends. The Drug Controller and Licensing Authority also recognized the product as an Ayurvedic medicine. Considering these factors and the specific circumstances of the case, the Tribunal found no merit in the impugned order and allowed the appeal filed by the appellant. Consequently, the impugned order was set aside in favor of the appellant.

The judgment was pronounced and dictated in Open Court on 06/02/2018 by the Tribunal comprising Justice (Dr.) Satish Chandra, President, and Mr. V. Padmanabhan, Technical Member.