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TMI Blog2013 (8) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... uents present in the cream ‘Moisturex’ and its use for the cure of certain skin diseases, have been classified as medicament liable to be classified under the Heading 30.03 (medicament) – Reliance is placed upon the judgment in the case of Alpine Industries vs. Collector of Central Excise, New Delhi [2003 (1) TMI 103 - SUPREME COURT OF INDIA] – Decided in favor of Assessee. - Civil Appeal No. 6988 of 2003, Civil Appeal No. 4434 of 2004 - - - Dated:- 14-8-2013 - Sudhansu Jyoti Mukhopadhaya And Kurian Joseph,JJ. JUDGMENT Kurian, J. 1. Care or cure , is the clue for the resolution of the lis arising in these cases. If the product by name Moisturex is held to be a medicament for cure, the decision goes in favour of the assessee and if the product is held to be one for care of the skin, the decision benefits the Central Excise. The Tribunal has held in favour of the assessee and, thus, the Central Excise is in appeals. 2. The Central Excise Tariff Act, 1985 (hereinafter referred to as CETA ) under Chapter 30 of the Schedule (2) deals with pharmaceutical products for the purposes of tariff. At the relevant time, if a product is held to be medicament, then, the rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person. 5. The Chapter Note has explained Heading No.30.03 as under: This heading covers medicinal preparations for use in the internal or external treatment or prevention of human or animal ailments. These preparations are obtained by mixing together two or more substances. However, of put up in measures doses or in forms or packings for retail sale, they fall in heading 30.04. The heading includes : (1) Mixed medicinal preparations such as those listed in an official pharmacopoeia, proprietary medicines, etc., including those in the form of gargles, eye drops, ointments, liniments, injections, counter-irritant and other preparations not falling in heading 30.02, 30.05 or 30.06. Entry 33.04 dealing with cosmetics reads as follows:- Heading No. Subheading No. Description of goods Rate of duty (1) (2) (3) (4) 33.04 3304.00 Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen and suntan preparations; manicure or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) 30.04 3004.00 Wadding, gauze, bandages and similar articles (for example, dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for medical, surgical, dental or veterinary purpose. 15% 7. The pharmaceutical contents of the product Moisturex are as follows: Urea I.P. -10% Propylene Glycol I.P. -10% Lactic Acid I.P. -10% Liquid Paraffin I.P. -10% Cream Base. 8. It is the contention of the learned counsel for the Central Excise-appellants herein that the product Moisturex is mainly used for care of the skin and thus, they are to be classified as cosmetic or toilet preparations and are to be treated under Heading 33.04. It is further contended that even if such cosmetic products contain certain subsidiary pharmaceutical contents or even if they have certain subsidiary curative or prophylactic value, still, they are to be treated as cosmetics only. It is also contended that the product is sold across or under the counter and the same can be purchased without prescription of a medical practitioner and hence it is not medicament. 9. On the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preparations are the ones covered by the Heading 33.04 for the care of the skin. The Note has specifically excluded medicaments. Still further, in the Chapter Note under Heading 33.04(B) also, it is clarified that medicinal preparations used to treat certain skin complaints are to be covered under the Heading 30.03 (medicaments) or Heading 30.04 (products containing pharmaceutical substances used for medical, surgical, dental or veterinary purposes). 12. Thus, if a product comprises of two or more constituents which have been mixed or compounded together for therapeutic or prophylactic use, the same is to be covered by Heading 30.03. Urea, lactic acid, propylene glycol are pharmaceutical constituents as per as Indian Pharmacopoeia. 13. The contention that Moisturex is a moisturizing cream used for softening the skin cannot be appreciated. As we have already discussed, the use of the cream is not for the care of the skin. Moisturex is also not primarily intended to protect the skin from sun, tan or dryness, etc. On the other hand, it is intended for treating or curing the dry skin conditions of the human skin and for a few other skin complaints like fissure feet, dry scaly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formula may not be as per the text books but a medicament can also be under a patented or proprietary formula. The main criteria for determining classification is normally the use it is put to by the customers who use it. ... (Emphasis supplied) 15. In Puma Ayurvedic Herbal (P) Ltd. vs. Commissioner of Central Excise, Nagpur 2006 (196) E.L.T. 3 (S.C.), it was held that the purpose of cosmetic product is to improve the appearance of a person and for enhancing the beauty whereas a medicinal product or medicament is meant to treat some medical condition. It was also held that merely because a product is sold not under a doctor s prescription, the same does not cease to be a medicament. In both these cases, it was held that minimal presence of medicinal element does not detract the product from being classified as a medicament. To quote: 20. It will be seen from the above definition of cosmetic that the cosmetic products are meant to improve appearance of a person, that is, they enhance beauty. Whereas a medicinal product or a medicament is meant to treat some medical condition. It may happen that while treating a particular medical problem, after the problem is cured, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include the same in the category of medicament. It has been found that the product is meant for the care of the lips and not for the cure of the skin, being a protective/preventive preparation for chapping of lips though it has an incidental use on cracked and chapped lips. To quote: 7. We have gone through the pharmaceutical and medical literature produced before us in the course of hearing and which has been duly dealt with by the Tribunal in its minority and majority opinion. The certificate issued by the Army Authorities and the chemical ingredients of the product are not decisive on the question of classification of the product for levy of excise duty. It is firmly established that on the question of classification of product under Central Excise Tariff Act, "commercial parlance theory" has to be applied. It is true that the entire supply by the appellant of its product 'Lip Salve' has been to the Defence Department for use of military personnel but that would also not be determinative of the nature of the product for classifying it. It is not disputed that the product 'Lip Salve' is used for the care of the lips. It is a product essentially for "care of skin" and not for " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh a product is sold without a prescription of a medical practitioner, it does not lead to the immediate conclusion that all products that are sold over / across the counter are cosmetics. There are several products that are sold over-thecounter and are yet, medicaments. Thirdly, prior to adjudicating upon whether a product is a medicament or not, Courts have to see what the people who actually use the product understand the product to be. If a product s primary function is care and not cure , it is not a medicament. Cosmetic products are used in enhancing or improving a person s appearance or beauty, whereas medicinal products are used to treat or cure some medical condition. A product that is used mainly in curing or treating ailments or diseases and contains curative ingredients even in small quantities, is to be branded as a medicament. 20. In the case of Moisturex , there is no dispute that the said cream is prescribed by the dermatologist for treating the dry skin conditions and that the same is also available in chemist or pharmaceutical shops in the market. The cream is not primarily intended for protection of skin. The ingredients in the cream, the pharmaceutical su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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