2014 (12) TMI 698 - HC - Central Excise

Classification of shampoo - whether the product is Medicaments - Classification under sub-heading No.3303.10 or under sub-heading No.3305.00 - Held that - Name of the product manufactured by the petitioner is Nizral Shampoo. The very name gives an indication that it is used as a substance that can be applied to hair be it for a healthy growth or for maintenance. - The literature and other material that was placed before the adjudicatory authority, i.e., Central Board of Excise ad Customs disclosed that the component by name Selenium Sulfide contained in it is a product, to cure certain skin diseases and its presence in profound quantity made the product nearer to medicine. After recounting the various values, which the product had, and the factum of the dropping the word shampoo, the Supreme Court agreed with the opinion expressed by the Central Board of Excise and Customs, which classified it as medicine. - continued use of the word shampoo to the product would certainly have made the difference. In the instant case, the product is being sold with the name Nizral Shampoo. Another aspect is that the classification of the product is determined on the basis of the process of manufacture and its proclaimed use and utility. The fact as to how the product is used, after it is manufactured, can not at all be taken into account. For instance, in respect of shampoos themselves, there are instances, where people use them for washing vehicles or cleaning floors, because their chemical impact is relatively less. On that account, the product cannot be treated as a washing medium. The circumstances under which the petitioner is said to have obtained licence for manufacturing shampoo, are not immediately before us. It is only when the relevant conditions are verified, that the proper conclusion can be arrived at. We have already mentioned that the purpose, which a particular enactment serves, are different from those under other enactments, though incidentally the same product may be dealt with by both of them. Further, the predominant object under the Act is to ensure that the products are not manufactured without licence. Unless necessary material is placed before us, we do not intend to deal with the contentions in this regard, in detail. - Writ petition dismissed - Decided against assessee.

Summary

Issues:
Classification of product under Central Excise Tariff Act - Whether product falls under medicament or preparation for use on hair - Maintainability of writ petition challenging order of Deputy Commissioner of Customs and Central Excise - Interpretation of legal provisions and previous judgments.

Analysis:
The writ petition challenges an order passed by the Deputy Commissioner of Customs and Central Excise regarding the classification of a product named Nizral Shampoo for levy of excise duty. The petitioner, a manufacturer, claims the product falls under sub-heading No.3303.10 of the Central Excise Tariff Act, while the 2nd respondent argues it should be classified under sub-heading No.3305.00. The petitioner contends that the product, having medicinal value, should be considered a medicament based on the Drugs and Cosmetics Act, 1940. The petitioner relies on a Supreme Court judgment in a similar case and asserts that the impugned order is contrary to law.

The petitioner argues that the product is used for medicinal purposes and should be classified as a medicament, not a cosmetic preparation for hair. The petitioner also highlights a previous order by the Central Excise and Gold (Control) Appellate Tribunal supporting their classification. On the other hand, the respondents claim that the writ petition is not maintainable as there is an alternative remedy under the Central Excise Act. They argue that technical aspects of classification should be left to the competent authority and cite a Supreme Court judgment in support of this position.

The court analyzes the classification issue by examining the product's name, Nizral Shampoo, and its intended use. It compares this case to a previous Supreme Court judgment involving a similar product named Selsun Shampoo. The court emphasizes the importance of technical expertise in classification matters and cautions against judicial overreach in such technical evaluations. The court also discusses the distinction between drugs and cosmetics under the relevant legal provisions and the need for proper verification of licensing conditions for manufacturing such products.

Ultimately, the court dismisses the writ petition, upholding the 2nd respondent's order. It notes that the 2nd respondent correctly analyzed the facts in comparison to the Supreme Court judgment cited by the petitioner. The court concludes that the writ petition lacks merit and rejects it. The miscellaneous petition filed in the writ petition is also disposed of with no costs awarded.