2005 (2) TMI 129 - SC - Central Excise

Classification of goods - LICEL - Classification under tariff sub-heading 3808.10 or under tariff sub-heading 3003.10 - Held that - In this case it has fairly not been denied that the only use of the product is for killing lice in human hair. We are unable to accept the submission that killing lice does not amount to a therapeutic or prophylactic use. Any medicine or substance which treats disease or is a palliative or curative is therapeutic. Licel cures the infection or infestation of lice in human hair. It is thus therapeutic. It is also prophylactic inasmuch as it prevents disease which will follow from infestation of lice. Thus, this is a product which is used for therapeutic and prophylactic purposes. It would thus be a Medicament within the meaning of the term Medicament in Note 2 of Chapter 30. It therefore gets excluded from Chapter 38 - Therefore, such product would fall under Chapter 30 under Tariff Heading 30.03 - Following decision of ICPA Health Products (P) Ltd. v. Commissioner of C. Ex., Vadodara 2004 (4) TMI 77 - SUPREME COURT OF INDIA - Decided against assessee.

Summary

Issues: Classification of a product under tariff sub-heading 3808.10 or 3003.10.

In this judgment, the issue revolves around the classification of a product known as "LICEL" by the Appellants. The Appellants claim that their product should be classified under tariff sub-heading 3808.10, while the Department argues that it should be classified under tariff sub-heading 3003.10. The Tribunal, relying on a previous judgment concerning a similar product, held that the product falls under tariff sub-heading 3003.10. The Appellants contest this classification based on chemical examiners' reports and market perception of the product as an insecticide. However, the Court analyzes the definition of "Medicament" under Chapter 30, emphasizing that even if a product is perceived as an insecticide, if it has therapeutic or prophylactic use, it cannot be classified under Chapter 38. The Court concludes that LICEL, used for killing lice in human hair, serves therapeutic and prophylactic purposes, making it a Medicament under Chapter 30 and excluding it from Chapter 38. This interpretation is consistent with a previous case involving a similar product. Consequently, the Court upholds the Tribunal's judgment, dismissing the Civil Appeal.

This judgment highlights the importance of understanding the specific definitions and criteria outlined in the tariff headings and chapter notes for the proper classification of products. It underscores the significance of the therapeutic and prophylactic use of a product in determining its classification, even if it is commonly perceived as something else, such as an insecticide. The Court's analysis focuses on the legislative intent behind the classification system and the need for a comprehensive assessment of a product's intended use to ensure accurate classification under the relevant tariff sub-headings. The reference to previous judgments and consistency in interpretation further solidify the Court's decision in this case.