1989 (12) TMI 185 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product "Mediker" - whether it is a shampoo, medicated soap, or treatment for lice.
2. Validity of the Assistant Collector's classification under sub-heading 3005.90.
3. Consideration of the product as an insecticide under Heading 38.08.
4. Examination of the principles of natural justice.
5. Determination of whether Mediker is a medicament under Heading 30.03.

Summary:

1. Classification of Mediker:
The primary issue is whether "Mediker" should be classified as a shampoo, medicated soap, or treatment for lice. The Assistant Collector of Central Excise classified it under sub-heading 3005.90 as a preparation for use on the hair. The Collector of Central Excise (Appeals) reclassified it under 3003.10, and the Revenue appealed this decision.

2. Validity of Assistant Collector's Classification:
The Assistant Collector classified Mediker under sub-heading 3005.90, considering it a preparation for use on the hair. The respondents argued that Mediker is an anti-lice treatment, not a shampoo. The learned DR contended that the product label and Chemical Examiner's opinion supported the classification as a shampoo, emphasizing that it contained surface active agents and a small quantity of D-Phenothrin.

3. Consideration as an Insecticide:
The respondents alternatively sought classification under Heading 38.08 as an insecticide. The learned DR argued that insecticides are used on inanimate objects, not humans. The respondents countered that D-Phenothrin is an insecticide effective against lice, and Mediker is used to treat lice infestation, a condition known as pediculosis.

4. Principles of Natural Justice:
The learned DR argued that the respondents could not plead violation of natural justice as they sought a decision on merits before the Collector (Appeals). The respondents contended that the Assistant Collector did not convey the Chemical Examiner's opinion to them.

5. Determination as a Medicament:
The Tribunal examined whether Mediker could be classified as a medicament under Heading 30.03. The respondents provided extensive evidence, including literature and a video film, to show that Mediker is used for treating lice infestation, a recognized disease. The Tribunal noted that Mediker is manufactured under a drug license and contains D-Phenothrin, an insecticide. The product's primary function is to treat lice, not to serve as a shampoo.

Conclusion:
The Tribunal concluded that Mediker is a medicament used for treating lice infestation and not a shampoo. It ruled out classification under Heading 33.05 and confirmed classification under Heading 30.03. Consequently, the appeal and cross-appeal were dismissed.