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2023 (5) TMI 191 - SC - Central ExciseClassification of goods - Aswini Homeo Arnica Hair Oil - to be classified as medicament under Tariff Item 3003 90 14 or as Hair oil (cosmetic) under Tariff Item 3305 90 19? - whether because of amendment of the entries in the said Chapters 30 and 33 in the year 2012, classification of the product in question required re-examination, even though the same was classified as medicament under the said Chapter 30 since the year 1994? - demand of differential duty alongwith interest and penalty - HELD THAT - The case of Alpine Industries 2003 (1) TMI 103 - SUPREME COURT essentially related to the question of classification of the product Lip Salve , manufactured in accordance with the defence services specifications and supplied entirely to military personnel, as a medicament under Chapter 30 or as a preparation for care of skin under Chapter 33. This Court, while dealing with common parlance theory, held that the entries are not to be understood in their scientific or technical sense, but by their popular meaning for the purpose of interpretation. In Sunny Industries 2003 (3) TMI 102 - SUPREME COURT , this Court was dealing with the question whether Ad-Vitamin Massage Oil Forte was still classifiable as patent and proprietary medicine even after the change of tariff description after 1985 Budget. This Court dismissed the appeal of the assessee as the product in question was oil, used for massage to take care of the skin, and not to cure the skin and hence, was classifiable under cosmetics and not under medicaments . In Sharma Chemicals 2003 (4) TMI 102 - SUPREME COURT , this Court was concerned with the issue as to whether the product Banphool Oil could be classified under as Ayurvedic medicament or as perfumed hair oil. This Court held that mere fact that a product is sold across the counter and not under a doctor s prescription, does not ipso facto lead to the conclusion that it is not a medicament. In the case Meghdoot 2004 (10) TMI 93 - SUPREME COURT , while dealing with the question of classification of six items namely Bhringraj Tail, Trifla Brahmi Tail, Neem Herbal Sat, Sat Reetha, Meghdoot Herbal Sat, Meghdoot Herbal Powder and following the decision in BPL Pharmaceuticals 1995 (5) TMI 98 - SUPREME COURT , this Court classified the items under the heading of medicaments and held that items which may be sold under names bearing a cosmetic connotation but would remain medicines based on the composition of the items. As regards the question as to whether the product in question, AHAHO, merits classification as medicament under Chapter 30 or as cosmetic or toilet preparations under Chapter 33, the inquiry shall be directed towards a couple of tests taken together, being the common/commercial parlance test i.e., how the product is understood commonly, including by the persons dealing in the same and by the end-users; and the ingredients test i.e., whether the ingredients used in the product are found mentioned in authoritative textbooks. It appears from the facts of the present case and the observations occurring in the said case of Bakson Homeo Pharmacy 2000 (8) TMI 777 - CEGAT, NEW DELHI that all the ingredients of the product involved in the present case (AHAHO) were equally the ingredients of the product under consideration therein, namely, Arnica Montana, Cantharis, Pilocarpine, Cinchona. As noticed from the relevant pages of Materia Medica placed before us, in the Homeopathic terminology, Cinchona Officinalis is also termed as China Officinalis; and Pilocarpine is essentially isolated from Jaborandi. The similar product involved in Bakson Homeo Pharmacy was said to be containing the ingredients Arnica Mont, Jaborandi, Cantharis and China, apart from other ingredients. It is also apparent in the present case that the stand of the Department to classify the product in question as cosmetic under Chapter 33 is essentially based on the distinct entry Hair Oil occurring therein; and it appears that the expression Hair Oil occurring on the label of the product has been taken as decisive by them. For what has been discussed hereinabove, it would also follow as a natural corollary that the expression Hair Oil occurring on the label of the product is only indicating the medium through which Homeopathic medicines comprising the product are to be applied. We are unable to accept the submissions and the efforts on the part of the appellant to take the product in question to Chapter 33 merely because of its label carrying the expression Hair Oil while ignoring the preceding significant expressions Homeo and Arnica . Whether re-look at classification of the product in question justified? - HELD THAT - There had been no justification in the Department seeking to re-open the settled position in relation to the product in question merely with reference to certain changes made in Chapter 30 and Chapter 33, which had essentially broadened their ambit and scope and provided modified marginal notes and tariff entries with detailed specifications. These changes had otherwise no impact, so far as the product of the respondent, AHAHO, is concerned - there had been no justification for making any attempt to re-classify the product in question with reference to the amendments brought about in Chapters 30 and 33 in the year 2012. Thus, AHAHO, merits classification as medicament under Chapter 30 and not as cosmetic or toilet preparations under Chapter 33 of the First Schedule to the Central Excise Tariff Act, 1985; and the change in tariff structure by way of amendment brought about in the year 2012 did not justify any re-look at the classification of the product in question. Appeal dismissed.
Issues Involved:
1. Classification of the product "Aswini Homeo Arnica Hair Oil" (AHAHO) under the Central Excise Tariff Act, 1985. 2. Justification for re-examination of the product's classification due to amendments in the tariff entries in 2012. Summary: 1. Classification of the Product: The primary issue was whether AHAHO should be classified as a "medicament" under Chapter 30 or as a "cosmetic" under Chapter 33 of the First Schedule to the Central Excise Tariff Act, 1985. Adjudicating Authority's Findings: - The product did not meet the criteria for "medicament" as it was not prescribed by medical practitioners, lacked dosage specifications, and had no significant therapeutic claims. - The product was labeled as "Hair Oil" and available over the counter, implying it was a cosmetic necessity. - The product was classified under Tariff Item 3305 90 19 as "cosmetic" (Hair Oil). Tribunal's Findings: - The product was made of four homeopathic medicines (Arnica Montana, Cantharis, Pilocarpine, and Cinchona) and was licensed as a homeopathic medicine. - The product label indicated its therapeutic uses, such as controlling hair fall, preventing dandruff, and inducing sleep. - The product passed the common parlance test as it was understood and marketed as a homeopathic medicine. - The Tribunal held that AHAHO should be classified under Chapter 30 as a "medicament." Supreme Court's Analysis: - The product contains recognized homeopathic medicines and is manufactured under a drug license. - The product's therapeutic and prophylactic uses were evident from its ingredients and label. - The expression "Hair Oil" on the label was indicative of the medium of administration rather than its primary function. - The product passed both the ingredient test and the common parlance test, confirming its classification as a "medicament." 2. Justification for Re-examination of Classification: The secondary issue was whether the amendments in the tariff entries in 2012 justified a re-examination of the product's classification. Adjudicating Authority's Justification: - Substantial changes in the tariff headings, including rewording of Chapter 30 and detailed specifications in Chapter 33, warranted a re-examination of the product's classification. Supreme Court's Analysis: - Changes in tariff structure alone do not justify reclassification without showing a change in the product's nature or use. - The product's composition, character, and uses remained the same despite the amendments. - The product continued to fit the description of a "medicament" under Chapter 30, and there was no justification for reclassification. Conclusion: The Supreme Court upheld the Tribunal's decision, confirming that AHAHO should be classified as a "medicament" under Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985. The amendments in 2012 did not warrant a re-examination of the product's classification. The appeal was dismissed.
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