2014 (6) TMI 342 - AT - Central Excise

Classification of goods - classification of Alovit Cream consisting of Aloe extract 10% w/w, Tocopheryl Acetate I.P. 0.5% w/w and Moisturising cream base, manufactured by the appellant, M/s. Ciens Laboratories i.e. whether under CETH 3003.10 as P or P Medicines or under CETH 3304 as Skin Care Products - Held that - From the technical literature available on the subject matter by way of Martindale - The Complete Drug Reference , U.S. Pharmacopeia, the expert opinion tendered by Shri M.K. Pradhan, it is seen that aloe extracts has therapeutic properties and has been used in various treatments especially in ayurvedic and homeopathic treatments for treatment of skin disorders such as psoriasis, eczema, hyperpigmentation, etc. The product literature and product packing clearly indicates that Alovit Cream is for use in treatment of skin diseases mentioned above and the product has to be used after consultation with the Doctor. The certificates issued by various Skin Specialists also clearly indicates that Alovit Cream is prescribed as a drug for treatment of skin diseases. The licence issued by the Drug Control authorities also shows that the product is a drug. In the light of these evidences submitted by the appellant, it is clear that the product merits classification as P or P medicine under CETH 3003.10. As against these evidences adduced by the appellant, the Revenue has not made any attempt, either to counter these evidences or to canvas their classification under CETH 3304 that the product is predominantly used as skin care product - no evidence was led by the appellants in those cases to establish that the products manufactured by them were medicines. In the case before us, there are specific and compelling evidences by way of technical literature, expert opinion, Doctor s certificates and product literature adduced by the appellant in support of their contention that the product manufactured by them is a medicine - Decided in favour of assessee.

Summary

Issues: Classification of 'Alovit Cream' under CETH 3003.10 as 'P or P Medicines' or under CETH 3304 as 'Skin Care Products'.

Analysis:
1. The appellant argued that 'Alovit Cream' should be classified under CETH 3003.10 as 'P or P Medicines' due to its composition and therapeutic properties, supported by drug license and expert opinions. The Revenue classified it under CETH 3304 as 'skin care preparations' based on the predominant use for skin care, disregarding the medicinal aspects. The lower authorities upheld this classification.

2. The appellant presented technical literature, expert opinions, and certificates from skin specialists to establish the medicinal nature of 'Alovit Cream'. The product was designed for therapeutic action in treating various skin disorders, as confirmed by the Drug Control authorities. Legal precedents like Ishaan Research Lab case were cited to support the classification as a medicine under CETH 3003.10.

3. The Revenue contended that Note (2) to Chapter 33 emphasized the primary use for classification, leading to categorizing 'Alovit Cream' as a skin care product under CETH 3304. Legal references like Ayurchem Products case were used to support this classification.

4. The Tribunal analyzed the evidence provided by both sides and concluded that 'Alovit Cream' qualified as 'P or P medicine' under CETH 3003.10 based on its therapeutic properties, expert opinions, and drug license. The lack of counter-evidence from the Revenue and the specific nature of evidence presented by the appellant led to overturning the lower authorities' classification. The Tribunal allowed the appeal in favor of the appellant.