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TMI Blog1999 (10) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... o on the point of limitation. 3. Arguing on the merits, Shri Bagaria fairly conceded that the classification of Dant Manjan Lal in the context of the Old Central Excise Tariff has already been decided against them by the Hon ble Supreme Court vide their Judgment dated 30-3-1995 reported in 1996 (83) E.L.T. 492. He, however, submitted that the position had since been changed considerably and new relevant facts as well as the position of law had to be taken into account for deciding the correct classification of the product under the new Central Excise Tariff. Drawing attention of the Bench to the earlier Tribunal s decision reported in 1985 (22) E.L.T. 844, he submitted that during the period covered by the Old Central Excise Tariff, Dant Manjan Lal was not being manufactured by the appellants in accordance with any of the authoritative Ayurvedic books mentioned in the First Schedule to the Drugs and Cosmetics Act, 1940 and as such, it was held that the same was not covered by the definition of Ayurvedic medicines given in Section 3(a) of the Drug Act. The same judgment was also followed subsequently by the Tribunal as reported in 1985 (22) E.L.T. 844. 4. Shri Bagaria submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by the earlier judgment of the Supreme Court, was not justified. He submitted that the position was clarified by the Ministry and various Circulars were issued. He drew our attention to the Circular dated 25-9-1991 issued by the Ministry of Finance, Government of India, inter alia, clarifying that the Office of the Drug Controller of India, Directorate General of Health Services has opined that the said product is manufactured in accordance with the formulae given in Ayurved Sara Sangraha , a book that has been incorporated in the First Schedule to the Drug Act and as such the said product may be treated as a classical Ayurvedic Drug and it will merit classification as Ayurvedic Medicine, notwithstanding the earlier decisions. The Central Excise Authorities were directed to clear all pending assessments accordingly. 7. Our attention was also drawn t o the subsequent Circular dated 29-3-1994 and the various Trade Notices issued on the basis thereof. It was clarified in the said Circular that if the goods in question are prepared according to the formulae described in the relevant authoritative books and are sold by the name described in such books, the same will be entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured exclusively in accordance with the formulae described in the authoritative book specified in the First Schedule to the Drug Act and sold under the name as specified in such books covered by sub-heading 3003.30. From this, Shri Bagaria argued that sub-heading 3003.00 specifically covered medicaments used in Ayurvedic System. He submitted that the classification adopted by the Department under Heading 3306.10 is not at all correct inasmuch as Dant Manjan Lal is an Ayurvedic medicine. Drawing attention to the Ayurvedic book, Sara Sangraha , he submitted that Dant Manjan Lal had antiseptic and prophylactic properties as it prevents and cures dental troubles such as bleeding of gums, dental caries, dental neuralgia, pyorrhoea, alveolitis etc. It also prevents and cures cavity formation in the teeth. As such, it is basically and predominantly an Ayurvedic Drug/Medicine. Its therapeutic, prophylactic and medicinal values have also been recognised in the said authoritative Ayurvedic book namely Ayurveda Sara Sangraha. The above position, submits the learned Advocate, has also been accepted by all the concerned authorities during the entire relevant period such as Drug Controlle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1-5-1992 to 31-7-1996 and the show cause notice was issued on 10-6-1997 under the proviso to Section 11A(1). He also submitted that prior to the said period, six different show cause notices seeking demand of duty on their product by classifying the same under 33.06, were issued, the last being 20-6-1991. When a Trade Notice was issued on 4-10-1991 clarifying the classification of Dant Manjan Lal as Ayurvedic Medicine, the Assistant Commissioner vide his Order dated 6-4-1992 dropped all the said six notices. The said Order was accepted by the Department and no appeal was filed there against. He submitted that thereafter, number of Circulars were issued by the Board, which were to the effect that Dant Manjan Lal were to be considered as an Ayurvedic Medicine, in view of the changed position after 28-8-1987, when the Ayurveda Sara Sangraha was included in the First Schedule to the Drug Act. He also submitted that in these circumstances, invocation of larger period of limitation was neither justified nor warranted. He also assailed the observation of the adjudicating authority that the appellants did not file any Classification List in respect of the said product, by submitting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicine. Shri Roychowdhury also referred to the interpretative rules of Chapter Note 1(d) of Chapter 30. He submitted that there is no evidence in terms of chemical analysis or any test report to show that the formula as prescribed in Ayurveda Sara Sangraha has been strictly followed by the appellants. It is just a bald statement by the appellants that they are adhering to the said formula. 17. As regards the Circulars issued by the Board, he submitted that the same were issued to sidetrack the Supreme Court s judgment and have been superseded by Circular dated 10-9-1997. The appellants were required to file Classification List every year under the provisions of Rule 173B and having failed to file Classification List every year, larger period has been rightly invoked by the adjudicating authority. 18. In his rejoinder, Shri Bagaria submitted that show cause notice itself establishes that the product is manufactured as a pharmacopoeial product and there is no allegation that the same is not being manufactured as prescribed in Sara Sangraha. They have taken this plea in their reply to show cause notice, which stands unrebutted by the Department. The Board has also in its various C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as medicament used in Ayurvedic, Unani and Siddha systems. Subsequent Circular issued by the Board on 28-5-1987 is reproduced below for better appreciation:- I am directed to refer to Board s letter of even number dated 31-10-1996 (copy enclosed) and your D.O. letter C. No. V-CN/(60)/19-1/94/CX., dated ..........97 addressed to Members (CX) on the above-mentioned subject. The Board has taken note of the changes in the Central Excise Tariff vide ...........Notification No. 75/94-C.E., dated 29-3-1994 read with instructions contained in Circular No. D 30/1/94-TRU., dated 29-5-1994 and Circular No. 196/60/96/CX., dated 3-4-1996 and creation of a separate sub-heading i.e. 3003.31 in the 1996-97 Budget. After these changes in order to attract classification under sub-heading 3003.31 the product should be a medicament within the Ayurvedic system of medicines and it could be manufactured in accordance with the formula given in the authoritative books and sold under the name given in such books. In view of these changes it is felt that the Supreme Court judgment dated 30-3-1995 in the case of Shree Baidyanath Ayurved Bhawan which is in the context of excisable tariff is not relevant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue s contention that the appellants should have filed the Classification List every year, is not sustainable in absence of any change, either in the product or in the law. The appellants plea that the product is classifitable under Heading 30.03 got further strengthened by the various Circulars of the Board issued from time to time. It has also been brought to our notice that six show cause notices issued on various dates prior to the period involved in the present appeal and all the six were dropped by the Assistant Commissioner vide his Order dated 6-4-1992. As such, it cannot be said that the appellants had suppressed any facts from the Department with intent to evade payment of duty. In fact, the entire factual position including the earlier judgments of the Tribunal and that of the Honourable Supreme Court, were within the knowledge of the Department who probably decided to act on the Circulars issued by the Board. The reasoning of the Commissioner for invoking the larger period on the ground that the appellants did not comply with the requisite procedural formalities in respect of the matters being subjudice before the Honourable Supreme Court, is not appealing to us inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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