2017 (9) TMI 1486 - AT - Central Excise

Classification of goods - Fairplus Herbal Face cream - Fiar plus face lotion - Revenue is seeking their classification under CETA 3304.00 as cosmetic preparation for care of the skin - Claim of the assessee is that these products are Ayurvedic Medicinal preparations classifiable under CETA, 3003 - Reliance placed in the case of Commissioner of Central Excise, Mumbai IV Versus M/s. Ciens Laboratories, M/s. Time Pharma 2013 (8) TMI 467 - SUPREME COURT , where The prescription of the Apex Court is that is used in curing or treating ailments or diseases and contains curative ingredients even in small quantities is to be classified as medicaments - It is fairly well established that the products contain several ingredients which serve the purposes of curing conditions such as, dilated veins (Varicose veins), sun burn, inflammation and rashes etc. Hence, they have been used for therapeutic and prophylactic purposes. Thus, both the products satisfy the test prescribed by the Apex Court - the products in question merit classification under Chapter 30 - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
Classification of products Fairplus Herbal Face cream and Fair plus face lotion under CETA 3304.00 as cosmetic preparation or CETA 3003 as Ayurvedic Medicinal preparations.

Detailed Analysis:

Issue 1: Classification Dispute
The dispute revolves around the classification of two products, Fairplus Herbal Face cream and Fair plus face lotion. The Revenue seeks to classify these products under CETA 3304.00 as cosmetic preparations, while the assessee argues that they should be classified under CETA 3003 as Ayurvedic Medicinal preparations.

Analysis: The Revenue contends that the products should be classified under sub-heading 3304.00 as "Beauty or make-up preparations and preparations for the care of the skin," emphasizing that their primary function is 'care' rather than 'cure.' They rely on a Supreme Court decision to support their argument. On the other hand, the Commissioner (Appeals) classified the products under Chapter 30, considering them as Ayurvedic medicines based on various factors, including the products' ingredients, therapeutic applications, and clinical tests conducted by doctors of Indian Medicine.

Issue 2: Arguments by Revenue
The Revenue argues that the products do not fall under Chapter 30 due to specific notes in Chapter 30 and the products' market perception as beauty creams rather than Ayurvedic medicines. They highlight that the products are applied on the face and are marketed as beauty creams, indicating their cosmetic nature.

Analysis: The Revenue's contentions are based on the technical specifications, end-use, and consumer understanding of the products. They assert that the products should be classified under Chapter 33, charging duty at a different rate. However, the Tribunal notes that the products contain curative ingredients and have therapeutic and prophylactic applications, aligning with the principles set forth by the apex court in a relevant case.

Conclusion: After analyzing the ingredients, therapeutic properties, and intended use of the products, the Tribunal upholds the classification under Chapter 30 as Ayurvedic medicines, as determined by the Commissioner (Appeals). The decision dismisses the appeal filed by the Revenue, emphasizing that the products meet the criteria for classification as medicaments under Chapter 30.

This comprehensive analysis of the legal judgment highlights the key arguments, considerations, and the final decision regarding the classification of the products in question.