2009 (2) TMI 217 - AT - Central Excise

Classification - This appeal of the Revenue is against classification of certain products of the respondents (assessee) as ayurvedic medicaments under sub-heading 3003.10 of the Schedule to the Central Excise Tariff Act. The appellant-revenue wants them to be classified as cosmetic preparations under heading 33.04 (SH 3304.00) - We find that the lower appellate authority took into account documentary evidence adduced bv the assessee to show that all the products were of medicinal value and that the same were prescribed by ayurvedic physicians. These documents include clinical report on the products, viz. Lexus-International and Lexus-Red Roses used on trial basis on people afflicted by ring worms. - the impugned order is sustained and this revenue s appeal is dismissed.

Summary

Issues:
Classification of products as ayurvedic medicaments or cosmetic preparations under Central Excise Tariff Act; Exemption from payment of duty based on brand name usage.

Classification Issue Analysis:
The appeal concerns the classification of products as ayurvedic medicaments or cosmetic preparations under the Central Excise Tariff Act. The Revenue argues for classification under heading 33.04 as cosmetic preparations, emphasizing that the products were marketed for skin care and did not require a medical prescription. They rely on a chemical test report stating the products were talcum powder for skin care. However, the lower appellate authority considered evidence provided by the assessee, including clinical studies and certificates from medical practitioners, to support the medicinal value of the products. The authority found that the goods were ayurvedic medicaments used against ring worms, supported by documents like clinical reports and certificates. The appellate tribunal upheld this finding, noting that the Revenue failed to successfully classify the goods under heading 33.04 and did not contest the evidentiary value of the documents presented by the respondent. Therefore, the tribunal concluded that the products should be classified as ayurvedic medicaments.

Exemption Issue Analysis:
Regarding the exemption from duty based on brand name usage, the Revenue argued that the brand name 'LEXUS' was sold to another entity during a specific period, making the claim for exemption invalid. However, the tribunal did not delve into this issue as the classification of the products was already determined in favor of the assessee. Therefore, the tribunal sustained the lower appellate authority's decision on the classification issue, leading to the dismissal of the appeal.