9911796707
TMI Blog1999 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise was required to be paid by them and no Central Excise formalities are required to be observed. In support of their above claim, the appellant relied upon the printed cover of the cream where it was stated that the said product contained alcohol to the extent of 2% v/w. 3. To verify the appellants claim a sample was drawn on 11-11-1982 for analytical test whether the subject goods contains Alcohol or not. Under the cover of his letter dated 13-1-1983, the appellant s jurisdictional Superintendent communicated the test report to the appellant and confirmed that as the goods in question contained Ethyl Alcohol as per the Test report, no Central Excise duty was leviable on the same. Thereafter, as per the appellants, there was no production in Calcutta factory during the period 4-4-1983 to 17-2-1985 and the goods were stock-transferred from their Patna factory to Calcutta. 4. Another sample was drawn by the Officers on 13-11-1985 and 2-1-1986. Test report of sample drawn on 2-1-1986 was communicated to the appellant by the Assistant Collector vide his letter dated 28-1-1986 intimating that as per the test result, the sample is free from ethyl alcohol. The appellant disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consistencies in the Test Report as regards the presence or absence of Ethyl Alcohol was attributable to the fact that no attempt was made in the Laboratory either at Calcutta or New Delhi to look for determination of presence of Calendula off IX and Hydrastis Cam IX. He argued that Analytical Chemist, Customs House, Calcutta had disclosed that macro identification Test as per Thorpe s Dictionary of Applied Chemistry was conducted and Cerric Ammonium Nitrate Test and/or X antihate test was not done. As disclosed by the Chemist the Customs House, Calcutta Laboratory was not equipped for testing the presence or absence of Calendula off IX and Hydrasis Cam IX. He argued that the micro identification test as per authority Fritz Feigl should have been undertaken for identification test for the presence of Ethyl Alcohol. Elaborating on his arguments he submitted that Calendula off IX and Hydrastis Cam IX is added to the medicinal preparation only through the medium of alcohol. He also drew the attention of the Bench to the test report by Homoeopathic Pharmacopoeia Laboratory, Ghaziabad to whom by the department had sent the product for retest. As per the test result of Ghaziabad Laborato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Dabur India Ltd. The disputed product before their Lordships was toothpaste called Homeodent which admittedly contained mother tincture . The dispute was whether the same is to be considered as containing alcohol. It was observed that alcohol may be a part of the preparation either because it is directly added to the solution or it came to be included in it because one of the components of that preparation contained alcohol. Our attention was also drawn to the Board s Circular No. 379/12/98-CX, dated 16-3-1998 wherein expressing opinion on the classification of the products claimed to be medicines within the Yunani, Siddha and Homoeopathic Systems of medicines, it was concluded as In this connection, it is needless to point out that such preparations which contain alcohol whether self generated or otherwise are outside the purview of Central Excise Tariff Act, 1985 in terms of Chapter Notification (sic) 4 to Chapter 30 and Chapter Note 1(c) to Chapter 33". 8. Countering the arguments ld. Adv. Shri P.K. Dutta along with Shri B. Mookerjee, argued that the admitted position is that the cream having a lamolin and paraffin base containing mild antiseptic is used as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir rejoinder placed on record in the form of written submissions submitted that the final product may be in a paste form, but alcohol is present in the same in the liquid from. Referring to Dabur India s case they contended that the presence of alcohol in the form of mother tincture at the time of production was good enough to take the product out of Central Excise Tariff. 11. As no arguments were advanced at the time of hearing in respect of any other issues involved, we are not dealing with the same. 12. From the history of the case as recorded above, we find that number of verification test results have been coming on record from different laboratories with different samples. The result of the very first sample drawn on 11-11-1982 supported the appellant s case that the Borocalendula contained alcohol and as such was not dutiable under Central Excise Law. The second test report of the sample drawn on 2-1-1986 was against the appellant. The appellants have pointed out certain defects and the lack of equipment in the laboratory to conduct micro test to find out the presence of alcohol as also the calendula off (IX) Hydrestis Cam (IX). On these short comings being pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - With due respect to the Hon ble Member (J), my views and orders are as follows : 15. In the present case, the ld. Counsel for the appellants wanted to refer and to rely upon letter dated 21-5-1991 obtained from Homoeopathic Pharmacopeia Laboratory, Ghaziabad after adjudication order had been passed and issued, and was admittedly a post-adjudication document on the ground that they could come to know the Collector s observations with reference to the test report only after perusal of adjudication order and therefore, could seek clarification only after receipt of the order. Ld. DR objected to it on the ground that it was new or fresh evidence which was not before adjudicating authority and moreover, it only indicates what was claimed by the appellants as per label claim and emphasised that no cognizance should be taken thereof and in any case not without affording an opportunity to the Commissioner, Central Excise to consider it as the adjudicating authority never had the opportunity to deal with it. I will deal with this point as we proceed. 16. I also observe that the test report of the sample drawn on 11-11-1992 indicated that the product contains alcohol but thereafter, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re bound to know what equipment, facilities or expertise was available and what test(s) they were capable of undertaking. If they were incapable of finding out the required facts as per prescribed standard and techniques, they were duty bound to indicate it and return the samples for being tested elsewhere. Similarly the challenge on this ground at the right time by the assessee could be understood but raising it belatedly after so many years was not understandable. Even more surprising was the Department responses to this challenge during adjudication. 23. Be that as it may, if the Commissioner still allowed one more test to be conducted and obtained test report from Homoeopathic Lab., Ghaziabad, it was open to the appellants to show how it substantiated their claim and it was equally open to the Commissioner to evaluate the report and come to an appropriate conclusion. In other words, it was open to the assessee to show its evidentiary value and to the adjudicating officer to adjudge the same. It is well-known that a test report or opinion cannot be accepted in a mechanical or routine way and must pass the test laid down by the Courts and the Tribunal for evaluating or assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tincture. The Collector, in fact, has emphasised that paraffin is not soluble in alcohol, hence harmonious mixing of Calendula Off and Hydrestis Cam with paraffin was not possible if the former contained alcohol. He had on this premise concluded that the appellants had undertaken mechanical incorporation process involving trituration by reducing the dry drug powder and sugar of milk to the finest possible powder, without the use of alcohol, and adding this powder to paraffin and other ingredients to prepare Boro Calendula Antiseptic Cream. 27(i). He found his conclusion buttressed by the fact that one of the seized documents was the manufacturing register and on verification therefrom, it was found that in no case the appellants had used either alcohol or Mother Tincture for producing this product during the period 31-3-1984 to 24-2-1986 and that is why the Department considered that it was excisable. 28. The Collector has further held that the product cannot be treated as homoeopathic medicine; and it is a cosmetic preparation for the care of the skin with limited prophylactic properties and therefore, classifiable under T.I. 14F of the erstwhile Tariff. 29. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge conditions, there was every possibility of chemical change leading to decrease/disappearance of ingredients specially evaporation of ethyl alcohol and re-emphasised that ethyl alcohol would have evaporated and that is why the sample was found free of alcohol on retest. 32. In fact, one of their grievances was that Department s test report was silent as to whether the product was Calendula Off 1x Hydrastis Can 1x which contain alcohol as per HPI. They had also emphasised that the properties of the ethyl alcohol have been ignored whereas it was important to note that it was volatile and was inter alia, susceptible to polar and ionic reagents. and reacts with inorganic and organic acid etc. 33. That their product contained four active ingredients out of which two were in the powder form and the other two in liquid form (Mother Tinctures) . In these Mother Tinctures, alcohol was present as a vehicle, they did not add alcohol as it is , but the alcohol was contained in and derived from Mother Tincture. 34. They had also emphasised that both Calendula Off 1x and Hydrastis Can 1x are both Mother Tinctures as per HPI. 35. They prepare these Mother Tinctures and denote the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, is by itself, not sufficient. If there was no warning on label or it was sold in a shop without medical prescription or by a person other than pharmacist, this was essentially for the drug administration to take care of. For us, this was by itself, not conclusive of the fact that the product was a cosmetic. Again the fact that the product also took care of the skin was by itself not sufficient because it is recognised by the Tariff that some cosmetics can have subsidiary medicinal properties. Conversely, some medicines not only treat but very well take care of the skin as well and may indeed, be meant for such a purpose and for judging whether the product is cosmetic or medicine, one has to go by the well established principles of interpretation of the Tariff for pre 1986 period and the statutory principles of interpretation and Chapter Notes for pre 1986. Therefore, depending upon the decision on excisability, the classification and dutiability issue will also be required to be re-examined. 42. I therefore, set aside the order and remand the same to the Collector for de novo consideration in the light of the above observations and the law. - - TaxTMI - TMITax - Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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