2005 (7) TMI 148 - AT - Central Excise

Summary

Issues: Classification of product 'Sanjivini Strong Balm' under Central Excise Tariff Act for the period July to November, 1987; Challenge against the demand of duty for the same period.

In Appeal No. E/5251/1993, the issue revolves around the classification of 'Sanjivini Strong Balm' under the Central Excise Tariff Act for the period from July to November 1987. The appellant contended for its classification as an ayurvedic medicine under SH 3003.30, while the lower authorities classified it under SH 3003.19, attracting a 15% duty rate. The appellant also challenged the duty demand in Appeal No. E/1663/1999, which was consequential to the classification under SH 3003.19.

Upon examination of the records and arguments from both sides, it was highlighted that the decision in the case of Amrutanjan Ltd. v. CCE was overruled by the Apex Court in a subsequent ruling. The Supreme Court emphasized that a product with chemical ingredients could still be considered an ayurvedic medicament if those chemicals were mentioned in ayurvedic textbooks. Additionally, the absence of a specific definition of 'ayurvedic medicine' in the Central Excise Act led to the application of the common parlance test to determine the classification. The product in question, 'Sanjivini Strong Balm,' contained methyl salicylate and menthol of pharmaceutical grade derived from natural herbs, which supported its classification as an ayurvedic medicament under SH 3003.30.

The lower authorities had made two key findings: the ingredients in 'Sanjivini Strong Balm' and the absence of its formula in authoritative books. However, it was established that the presence of methyl salicylate and menthol sourced from natural herbs aligned with ayurvedic principles, as per the Supreme Court's precedents. The judgment in the Naturelle Health Products case further clarified that an ayurvedic preparation did not need to adhere to a specific formula but should contain ingredients mentioned in ayurvedic texts. Consequently, the product was deemed classifiable as an ayurvedic medicament under SH 3003.30, attracting a NIL rate of duty for the disputed period.

As the appropriate tariff entry warranted no duty during the relevant period, the demand of excise duty on the appellant was deemed unwarranted. Therefore, the impugned orders were set aside, and both appeals were allowed, granting consequential relief to the appellant.