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2018 (2) TMI 1397 - AT - Central ExciseClassification of goods - Aswini Homeo Arnica Hair Oil (AHAHO) - Appellant has classified the said produce as Medicament falling under chapter sub heading No.30039014 and were claiming concessional rate of duty under N/N. 18/2012-CE dt. 17.03.2012 - Held that - In case of CCE Nagpur Vs. Vicco Laboratories 2004 (12) TMI 92 - SUPREME COURT OF INDIA , the Hon ble Apex Court has held that classification cannot be changed without a change in the nature of a product or a fresh interpretation of a tariff heading by such decision - In the present case the goods in question has remained same and there is no change of tariff heading. The goods are classifiable under chapter 30 of the Central Excise Tariff as Homeopathic medicine and liable to duty accordingly. There is no reason to demand the duties and penalties adjudged against the Appellant. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of the product 'Aswini Homeo Arnica Hair Oil' (AHAHO) as either a medicament or a cosmetic. 2. Applicability of concessional duty rates under specific notifications. 3. Imposition of penalties under Section 11AC read with Rule 25 of Central Excise Rules, 2002. Detailed Analysis: 1. Classification of the Product: The primary issue was whether AHAHO should be classified as a medicament under Chapter 30 or as a cosmetic under Chapter 33 of the Central Excise Tariff Act (CETA), 1985. The appellant argued that AHAHO is a mixture of four homeopathic medicines (Arnica, Cantharis, Pilocarpin, and Cinchona in a coconut oil base) used for therapeutic purposes such as treating hair loss, insomnia, and dandruff. The product is manufactured under a Drug Licence issued under Rule 25C of the Drugs & Cosmetics Rules, 1945, and is covered under Schedule K of the same rules, which pertains to drugs and not cosmetics. The adjudicating authority, however, contended that AHAHO is not prescribed by a medical practitioner for curing diseases and is available over the counter, thus classifying it as a cosmetic. The authority also noted that the product label did not indicate mandatory sale conditions or dosage instructions. Upon review, the Tribunal found that the product label mentioned therapeutic uses such as controlling hair fall, preventing dandruff, and inducing good sleep, which are indicative of medicinal properties. The Tribunal emphasized that the absence of specific disease names on the label does not disqualify a product from being a medicament. The Tribunal referenced several Supreme Court judgments, including Commissioner v. CIENS Laboratories and Puma Ayurvedic Herbal (P) Ltd. v. Commissioner of Central Excise, which supported the view that products with therapeutic properties, even if sold over the counter, should be classified as medicaments. 2. Applicability of Concessional Duty Rates: The appellant claimed concessional duty rates under Notification No. 18/2012-CE dated 17.03.2012, applicable to homeopathic medicines. The Tribunal noted that the appellant had consistently classified the product as a medicament under Chapter 30 and had been granted such classification in previous proceedings. The Tribunal found no change in the nature of the product or its usage that would necessitate a reclassification under Chapter 33. 3. Imposition of Penalties: The adjudicating authority had imposed penalties under Section 11AC read with Rule 25 of Central Excise Rules, 2002, based on the classification of AHAHO as a cosmetic. However, since the Tribunal concluded that AHAHO is a medicament, the basis for the penalties was invalid. The Tribunal held that the product should remain classified under Chapter 30, thus nullifying the demand for differential duty and associated penalties. Conclusion: The Tribunal concluded that AHAHO is a homeopathic medicine classifiable under Chapter 30 of the CETA, 1985. The product's therapeutic properties, its manufacturing under a Drug Licence, and its recognition by various authorities as a medicament were decisive factors. Consequently, the Tribunal set aside the impugned orders, annulled the duty demands and penalties, and allowed the appeals with consequential reliefs. (Order pronounced on 31/01/2018 in open court)
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