1988 (10) TMI 151 - AT - Central Excise

Issues Involved:
1. Classification of "AD Vitamin Massage Oil Forte" under Tariff Item (TI) 14E or TI 14F.
2. Validity of reclassification post-amendment of TI 14F.
3. Consideration of the product as a drug or cosmetic.
4. Impact of the product's licensing and marketing on its classification.
5. Evaluation of evidence and expert testimonies.

Detailed Analysis:

1. Classification of "AD Vitamin Massage Oil Forte" under TI 14E or TI 14F:
The primary issue in the appeal is whether "AD Vitamin Massage Oil Forte" should be classified under TI 14E (Patent and Proprietary Medicines) or TI 14F (Cosmetics and Toilet Preparations). Initially, the product was classified under TI 14E until the amendment of TI 14F on 17-3-1985, which included Explanation II. The Department argued that post-amendment, the product should be classified under TI 14F, while the appellants contended it should remain under TI 14E.

2. Validity of Reclassification Post-Amendment of TI 14F:
The Finance Bill 1985, which became the Finance Act 1985, introduced changes to TI 14F, including Explanation II, which states that "cosmetics and toilet preparations whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value" are included under TI 14F. The Department issued a show cause notice for reclassification under TI 14F(1), which was upheld by the Assistant Collector and the Collector of Central Excise (Appeals).

3. Consideration of the Product as a Drug or Cosmetic:
The appellants argued that the product is primarily a drug because it contains medicinal preparations in oil form, is used for massage, prevents and treats rickets, and has a trade mark indicating it is proprietary. They emphasized that the product was recognized as a medicine from 1961 and continued to be so even after 1985. The Department countered that the product is a preparation for the care of skin, which falls under TI 14F, especially after the inclusion of Explanation II.

4. Impact of the Product's Licensing and Marketing on its Classification:
The appellants highlighted that the product is manufactured under a drug license, contains an expiry date, and is marketed as a drug. They submitted various certificates from doctors and sales receipts to support their claim. The Department argued that the mere grant of a drug license does not make the product a drug for Central Excise purposes, citing the Tribunal's judgment in Shree Baidyanath Ayurved Bhawan Ltd. v. Collector of Central Excise, Patna.

5. Evaluation of Evidence and Expert Testimonies:
The appellants presented affidavits and certificates from doctors stating the product's medicinal use. However, the Department maintained that the product is a massage oil with marginal medicinal properties, as evidenced by the Chemical Examiner's report. The Tribunal noted that the product's virtues are attributed to the vitamins it contains, but its primary function is for skin care. The Product Manual and promotional materials also emphasized its use for massage and skin care.

Conclusion:
After thorough examination, the Tribunal concluded that the product "AD Vitamin Massage Oil Forte" is primarily a massage oil intended for skin care, with some marginal medicinal properties. The classification under TI 14F was deemed correct, and the appeal was dismissed. The Tribunal upheld the lower authorities' decision, emphasizing that the product should be judged based on the Central Excise Tariff and not merely on its licensing or marketing as a drug.

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