2005 (2) TMI 344 - AT - Central Excise

Summary

Issues:
Classification of 'Kesini Hair Oil' under Chapter sub-heading 3003.39 as proprietary Ayurvedic medicine or under 3305.99 as a preparation for hair.

Detailed Analysis:
The judgment involves applications for condonation of delay and stay applications filed by the Revenue. The issue in question pertains to the classification of 'Kesini Hair Oil' manufactured by the Respondents M/s. Kerala Ayurveda Pharmacy Ltd. The Commissioner (Appeals) classified the product under Chapter sub-heading 3003.39 as a proprietary Ayurvedic medicine, while the Revenue contended that it should be classified under 3305.99 as a preparation for hair. The Commissioner's observation that the product should be classified as an Ayurvedic medicine based on the ingredients mentioned in authoritative texts on Ayurveda was deemed unacceptable by the Tribunal. The Tribunal emphasized that while authoritative texts may help determine if a product is Ayurvedic or Alopathic, they cannot solely dictate the classification under rival entries Chapter 30 and Chapter 33.

Furthermore, it was noted that no one disputed that the product is a preparation for hair. The Respondents argued that the product should be classified under Chapter 30 due to its therapeutic values. However, the Tribunal referenced the Supreme Court's decision in Alpine Industries v. Collector of Central Excise, which outlined principles for classification. The Court highlighted that even if a product has curative effects, it does not automatically qualify as a medicament. The Tribunal also referred to the case of Arya Vaidya Pharmacy (CBE) Ltd v. CCE, Cochin, where a similar product was classified under Chapter 33 as a preparation for hair.

The Tribunal rejected the Respondent's claim that the product is not a preparation for hair because it is applied to the scalp and not directly to the hair. It was emphasized that products like soaps, creams, and hair oils claiming therapeutic value cannot be classified as medicaments under Chapter 30 solely based on their curative properties. The Tribunal followed the Supreme Court's principles and concluded that the Respondent's product 'Kesini oil' is indeed a preparation for use on hair, falling under chapter heading 33.05. The appeals of the Revenue were allowed, setting aside the orders of the Commissioner (Appeals).

Additionally, Appeal Nos. E/315 - 317/2003, which were also Revenue's appeals, were allowed for the same reasons, and the orders of the Commissioner (Appeals) were set aside. The operative portion of the order was pronounced in Court on the conclusion of the hearing.