2017 (7) TMI 1178 - AT - Central Excise

Classification of manufactured goods - Dhatri Brand Hair Care Herbal Oil - Dhatri Brand Massage Oil - Department sought to classify the Hair Oil and the Massage Oil under Central Excise Tariff Heading 3305 and 3304 respectively as cosmetics - whether the products would be classified as cosmetics or as ayurvedic products? - Held that - There are judgements available on both sides. In the case of Dabur India Ltd. Vs. CCE Jamshedpur 2005 (4) TMI 57 - SUPREME COURT OF INDIA the Hon ble Supreme Court has decided the matter in favour of the appellant and considered the Hair Oil as Ayurvedic product - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Classification of "Dhatri Brand Hair Care Herbal Oil" and "Dhatri Brand Massage Oil" under Central Excise Tariff Heading.
2. Liability to pay duty and penalty on clearances made under specific invoices.
3. Determination of whether the products fall under drugs and cosmetics category.
4. Appeal against the orders issued by the Commissioner (A).

Classification Issue:
The Appellate Tribunal addressed the classification issue of the Hair Oil and Massage Oil under Central Excise Tariff Heading 3305 and 3304 respectively. The Department argued that the products should be classified as cosmetics. The Commissioner (A) remanded the case for re-quantifying duty and penalty, ultimately deciding that the products fall under Chapter 30 of the Tariff as drugs and cosmetics. The Tribunal upheld this classification based on fulfilling conditions laid down by the Supreme Court in previous cases.

Liability Issue:
Regarding the liability to pay duty and penalty on specific clearances, the Tribunal confirmed the duty amount and penalties imposed by the Joint Commissioner. The Commissioner (A) held the respondents accountable for duty on clearances made under specific invoices during a defined period. The Tribunal upheld this decision, emphasizing the duty payment obligations of the respondents.

Drugs and Cosmetics Issue:
The crucial issue revolved around whether the products qualified as drugs and cosmetics under Chapter 30 of the Tariff. The respondents argued that the products were Ayurvedic medicaments supported by various licenses and certificates from regulatory authorities. The Tribunal considered the evidence presented, including drug licenses and certifications, and concluded that the products were rightfully classifiable as Ayurvedic medicaments under Chapter 30 of the Tariff.

Appeal Issue:
The Department filed an appeal against the orders issued by the Commissioner (A). The Tribunal carefully reviewed the arguments presented by both sides and analyzed the previous judgments cited. Ultimately, the Tribunal found that the case was covered by its previous decision and did not find any compelling reasons to interfere with the Commissioner (A)'s order. Consequently, the appeal filed by the Department was rejected.

In conclusion, the Appellate Tribunal upheld the classification of the products as Ayurvedic medicaments under Chapter 30 of the Tariff, confirmed the duty liability on specific clearances, and rejected the Department's appeal against the Commissioner (A)'s orders.