2003 (4) TMI 101 - SC - Central Excise

Classification of goods - Himtaj Oil - Classification under sub-heading 3003.30 or under sub-heading 3305.10 - Held that - it must be mentioned that in this Civil Appeal the question of classification relates to Himtaj oil . On board along with this Appeal were a number of other Appeals which related to classification of Bhanphool oil - by a separate judgment, Court negatived the submissions of the Revenue in respect of Bhanphool oil . Thus for reasons set out in that separate judgment the arguments of the Revenue even in respect of Himtaj oil cannot be accepted. The authority relied upon is also of no assistance. In that case there was no evidence to show that the common man considered that product as a medicine. In this case the report of the Range Officer shows that dealers, wholesalers, retailers, customers, chemists and druggist all consider Himtaj oil to be an Ayurvedic medicament. Apart from that the other material relied upon by the Assistant Collector (which has been set out hereinabove) also clearly shows that Himtaj oil is an Ayurvedic medicament - Decided against Revenue.

Summary

Issues: Classification of "Himtaj oil" as Ayurvedic medicine or perfumed hair oil.

Classification of "Himtaj oil" as Ayurvedic medicine:
The Respondents classified "Himtaj oil" as Ayurvedic medicine under sub-heading 3003.30. The Assistant Collector accepted this classification based on various materials, including a drug license, a letter from the Ayurvedic Department, a study report from an Ayurvedic institute, a market inquiry report, a re-testing report from the Chief Chemist, and an SSI registration certificate. The Commissioner (Appeals) overturned this decision, stating lack of evidence that the product was prescribed by medical practitioners or used as medicine by the common man. However, CEGAT allowed the Respondents' appeal, affirming that "Himtaj oil" was indeed an Ayurvedic medicament. The Supreme Court upheld this decision, emphasizing that the material evidence supported the classification as an Ayurvedic product, contrary to the Revenue's arguments.

Relevance of arguments regarding "Bhanphool oil":
The Additional Solicitor General argued that the decision on "Bhanphool oil" classification should apply to "Himtaj oil" as well. Referring to a previous case, it was highlighted that the popular understanding of a product should prevail over scientific or technical meanings. The Court had ruled in a separate judgment regarding "Bhanphool oil," which influenced the decision on "Himtaj oil." The Court emphasized that the common perception of a product as a medicine was crucial, supported by evidence from the Range Officer and other materials. The Court rejected the Revenue's arguments and upheld the classification of "Himtaj oil" as an Ayurvedic medicament based on the available evidence.

Final Decision:
The Supreme Court dismissed the Revenue's appeal, upholding the classification of "Himtaj oil" as an Ayurvedic medicament. The Court found no fault in CEGAT's decision, as the material evidence and common perception supported the classification. No costs were awarded in this matter.