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TMI Blog2000 (5) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Central Excise claiming the classification of the product under sub-heading 3000.30 as an Ayurvedic Medicament. A show-cause notice dated 15th November, 1994 was issued to the appellants calling upon them as to why their Himtaj Oil should not be classified as Perfumed Hair Oil under sub-heading 3305.10 attracting higher rate of duty. The appellants replied to the show-cause notice and put forth various pleas and submissions. The Assistant Commissioner after considering the entire facts on record vide his order dated 2-4-1996 classified the said goods as an Ayurvedic Medicament falling u/s.h. 3000.30 and approved the list accordingly. For holding so, the Assistant Commissioner relied upon a number of factors like drug licence issued by the Drug Controller; letter issued by the Superintendent of Ayurvedic Department, Sir Sundarlal Hospital, Banaras which confirmed the product to be ayurvedic medicine; study report of Institute of Post Graduate Education Research in Ayurved, Calcutta-9 on Himtaj Oil which reveals that it is an Ayurvedic product which is found to have a pain relief effect in headache migrain and also provides relief against dandruff, the Range Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts reference to authoritative Ayurvedic literature in which they find place including the page numbers have been specified. On this factor, it is proved that the oil in question is an ayurvedic preparation. He also submits that the sample of the product was tested by the Chief Chemist who specifically arrived at a report that there are sufficient grounds to consider the product as medicament. Such report, submits the learned Advocate has been wrongly interpreted by the Commissioner (Appeals). He observed that - Thus from the report it can be derived that the product is primarily a perfumed hair oil with subsidiary therapeutic value meriting classification under sub-heading 3305.10. He also submits that not only in common parlance the product is known as medicine inasmuch as the same has to be applied in the case of minor ailments, headache, migrain etc. but he submits, that the said claim of the appellants made before the Assistant Commissioner was got verified by the Department and as per the Range Officer s report obtained by the Department itself based upon the markets survey conducted by them, the product was to be treated as ayurvedic medicine. The Commissioner (Appeals) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dic Medicine if in the common parlance it is known as an Ayurvedic Medicine and all the ingredients are mentioned in the authoritative book(s) on Ayurvedic Medicine. He submits that as the appellants satisfied the above tests for determining the classification of the product to be an Ayurvedic Medicine, the decision of the Commissioner (Appeals) is not sustainable on the face of it. 5. Dr. Samir Chakraborty also draws our attention to the Tribunal s decisions in the case of M/s. Sharma Chemical Works v. C.C.E., Calcutta-I (Order No. M-284 dated 7-11-1997 read with Final Order No. A-598/Cal/99 dated 24-6-1999) wherein the dispute related to the classification of a similar product Ayurvedic Banphool Oil . He submits that originally there was difference of opinion between Members and the matter was referred to Third Member who agreed with the view of Member (Judicial) holding that the product to be an Ayurvedic Medicament . As such he submits that following the ratio of the decision in the case of Sharma Chemical Works, their appeal be allowed and the impugned order be set aside. 6. Countering the arguments, Shri R.K. Roy, learned JDR supports the findings of the Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent in the present case. In the order recorded by the Member (J) in that case, the decisions and judgments of the various High Courts and the Hon ble Supreme Court were taken note of. It was observed that Madhya Pradesh High Court in the case of Panama Chemical Works v. UOI - 1992 (62) E.L.T. 241 (M.P.), while considering the nature of the product `swad observed that in the case of definition of Ayurvedic Preparation in the Central Excise Tariff, resort has to be made to the provisions of the Drug Cosmetics Act, 1940 and the scientific and technical aspects of the product are to be determined with the aid of the definition in that Act. Further the Apex Court decision in the case of M/s Amrutanjan Ltd. v. C.C.E. reported in 1995 (77) E.L.T. 500 held that the ingredients known both in the Western Sciences as also to Ayurvedic and refined for use in the medicines will not take them out of the purview of Ayurvedic medicines. Use of some synthetic ingredients will also not effect the ayruvedic character of the medicine. Similarly the Tribunal in the case of Dabur India Ltd. - 1994 (71) E.L.T. 1069 (T) held that the product Himtaj Candy containing 25% active ingredients as per Ayur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax, Maharasthra State, Bombay v. Gordhandas Tokersey - 1983 (52) STC 381 (Bombay). 9. Now we also will discuss the present case in the light of the ratios laid down by the above decisions. 10. There is no dispute that the appellants are holding licence from the Drug Controller permitting them to manufacture Himtaj Oil as Ayurvedic Medicament. We have already observed that this has been held to be one prime factor for considering classification of the product. The fact that the enclosure attached to the licence, gives description of the ingredients along with authoritative Ayurvedic Books in which such ingredients have been mentioned, has not been disputed before us. Commissioner (Appeals) has not discussed that the ingredients of the product in question are not mentioned in the authoritative books. In this connection, we also refer to C.B.E. C. Circular No. 196/30/96-CX dated 3-4-1996 wherein the benefit of Notification No. 75/94-CE has been held to be available to the products if they are manufactured in accordance with the formula prescribed in the authoritative books and sold under generic name. The said Circular for ready reference and better appreciation is reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Ministry of Health and Family Welfare were consulted, who has opined that significant changes have taken place in the process of making of ayurvedic medicines and preservatives, inner excipients like starch, lactose and willing agents like sodium laurerle sulphate are nowadays widely used. They are in favour of allowing use of preservatives by the manufacturers of ayurvedic medicines. 4. Having regard to the above, the Board is of the view the benefit of exemption under S. No. 3 of Notification No. 75/94-C.E. should not be denied to ayurvedic medicines if they are manufactured in accordance with the formulae prescribed in the authoritative text books and sold under the generic name mentioned in the said authoritative text books but contain preservatives, inner excipients, binding agents etc. not having any therapeutic value. In such cases the assessing officers may obtain a certificate to be produced by the manufacturers from the appropriate Drug Authorities that the drug satisfies the following conditions :- (a) The medicament has been prepared in accordance with the formulae prescribed in the authoritative text books; and (b) The ingredients added, other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hief Chemist report to classify the product as claimed by the appellants. 9. Coming to the next finding i.e. how the product is viewed in common parlance, one important factor in deciding the classification, we find that the appellants had taken a categorical stand before the original adjudicating authority that the product is known as a medicine in the common parlance. Apart from the printing on the outer cover of the hair oil to the research conducted by various Ayurvedic institutions, all these have been discussed in the order of the Assistant Commissioner. We have ourselves seen some of the reports which have been placed on record in the shape of a paper book. In one of the said reports appearing at page 14 based upon Clinical Study of Himtaj Oil conducted by Siraswa (General Headache). Ayurvedic (Migraine) and Puya Rakta (Sinusitis) conducted by the various persons of research of Institute of Post Graduate Education Research in Ayurvedic (S.V.S.P. Hospital), Govt. of West Bengal, Department of Health. It has been held as under : Assessment of results was based on the clinical improvement and subjective relief and a sense of well being. Results were classified as excel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold in medical shops. We find that the Appellate Authority has not countered the Supdt. s report which is not depending only on the medical shop bills but is based upon affirmative and positive evidence of result of market survey. Lastly it is observed that to bring the product under Chapter 33 as perfumed hair oil, the oil must be refined to which perfume has been imparted by way of positive and deliberate act. While dealing with the said issue we would like to reproduce below the discussions of the Assistant Commissioner : From the cited case law, I find that the expression perfume oil must connote an oil to which perfume has been imparted by way of positive and deliberate act and not as meaning an article which must happen to have perfumed. Taking into consideration this guideline of the case law the assessee s contention receives relevancy in the case and is considered to be a factor for the purpose of classifying the product Himtaj Oil . Besides, assessee cited another case law 1990 (46) E.L.T. 420 (T). After going through the cited case law, I find that this case law has no direct impact in this case but there is some point which may be taken as guidelines in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hatever conducted shows the result in favour of the appellant and no other evidence has been placed by the Revenue to show that the oil in question is known as hair oil in common parlance. 11. Another factor which weights with us is that Himtaj Oil under dispute has already been treated as Ayurvedic Medicine by Hon ble Allahabad High Court (supra), though the said decision was given in the case of Commissioner of Sales Tax. We find that the ratio of the same would be equally applicable for the purpose of classification of the product under Central Excise Tariff Act inasmuch as considerations for deciding the Ayurvedic medicinal nature of the oil or perfumed hair oil in both the cases are identical. The relevant portion of the Hon ble Allahabad High Court is reproduced below : The only item now left is Himtaj Oil, the assessing officer treated this article as a cosmetic. On appeal, the learned Asstt. Commissioner (Judicial) held it to be a medicine. He has observed that it was a medicinal oil and its main function is to relieve pain. He has mentioned that this oil is used for headache, sambahlbai, Adhakapri etc. The learned Tribunal in its order has observed that this oil was a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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