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2021 (9) TMI 207 - AAR - CustomsClassification of goods - Preparation of Essential Oils intended to be imported in retail packs for distribution marketing in India through General Provision Stores and online channel - whether the products fall under Chapter 33 or otherwise? - HELD THAT - The goods covered by the application are clearly intended for cure and not -care ; and they are intended for sale based on their curative attributes. Further, in view of the test laid down by the Hon ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV VERSUS M/S. CIENS LABORATORIES, M/S. TIME PHARMA 2013 (8) TMI 467 - SUPREME COURT , the determining role ascribed by the Principal Commissioner of Customs to the requirement of prescription by medical practitioner for the goods to be classified as medicament under 3004 does not sustain. Therefore, since the goods are proposed to be imported in retail packs, they are classifiable under heading 3004. Going further, relying on the communication of the Ministry of AYUSH, the ingredients of the goods are described in the authoritative bodies of Ayurveda as listed in the Schedule -I of the Drugs and Cosmetics Act, 1940, the goods are classifiable under sub-heading 3004 90 11. The goods are described in the advance ruling application as Preparation of Essential Oils manufactured by Bertram and sold under Siang Pure Brand, which are commonly used for applying on human body/skin without the prescription of medical practitioner. They are claimed to provide relief from headache, motion sickness, dizziness, coughing (throat irritation), stomach ache, inspect bites, joint and muscle pain etc. answer to the description of herbal medicinal products in retail consumer packs, and therefore merit classification under 3004, more specifically sub-heading 3004 90 11 of the First Schedule to the Customs Tariff Act, 1975.
Issues Involved:
1. Determination of the classification of "Preparation of Essential Oils" under the Customs Tariff Act. 2. Examination of whether the products fall under Chapter 33 or Chapter 30 of the Customs Tariff. 3. Consideration of the implications under the Drugs and Cosmetics Act. Issue-wise Detailed Analysis: 1. Determination of the classification of "Preparation of Essential Oils" under the Customs Tariff Act: The application was filed by M/s Inspiration Idea & Innovations & Productions Pvt. Ltd. seeking an advance ruling on the classification of essential oils intended for retail distribution in India. The applicant described the products as containing Mint Oil (Menthol), Peppermint Oil, Cinnamon Oil, Clove Oil, Mineral Oil, and Camphor Oil, and intended for use without a medical prescription. The products are marketed under the brand name "Siang Pure Oil" and are claimed to provide relief from various ailments such as headaches, motion sickness, and joint pain. 2. Examination of whether the products fall under Chapter 33 or Chapter 30 of the Customs Tariff: The primary question was whether these products should be classified under Chapter 33, which covers essential oils and perfumery, or Chapter 30, which covers pharmaceutical products. The Principal Commissioner of Customs commented that the classification depends on whether the products are used with or without a prescription. If they are used without a prescription and have subsidiary therapeutic use, they fall under Chapter 33. However, if they are primarily therapeutic and require a prescription, they would fall under Chapter 30. During the personal hearing, it was discussed that the products have medicinal properties and are sold without a prescription. The applicant mentioned that the products are Ayurvedic and had approached the Ministry of AYUSH for registration. The Ministry of AYUSH indicated that since the products are manufactured outside India, they do not fall under their jurisdiction. 3. Consideration of the implications under the Drugs and Cosmetics Act: The products were described as herbal medicinal products in retail consumer packs. The Customs Tariff Act classifies medicinal preparations under Chapter 30, while cosmetics fall under Chapter 33. The Supreme Court of India has provided guidelines for distinguishing between cosmetics and drugs, emphasizing that the primary function of a product determines its classification. If a product's primary function is "care," it is a cosmetic; if it is "cure," it is a medicament. The applicant's products were found to be intended for "cure" rather than "care," as they are marketed for their curative attributes. Therefore, the products were deemed to be medicaments. The Ministry of AYUSH confirmed that the ingredients are described in authoritative bodies of Ayurveda, supporting their classification as Ayurvedic medicines. Conclusion: Based on the analysis, the products described in the advance ruling application as "Preparation of Essential Oils" manufactured by "Bertram" and sold under the Siang Pure Brand, which are used for applying on the human body/skin without a medical prescription and provide relief from various ailments, are classified under heading 3004 of the Customs Tariff Act. Specifically, they fall under sub-heading 3004 90 11, which pertains to Ayurvedic medicinal products.
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