9911796707
TMI Blog2007 (5) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... and recorded statements of various persons. Show cause notice was issued to the appellants directing them to show cause as to why the classification of the product manufactured by them should not be considered under Chapter Heading 3305 instead of 3003.20 as claimed by the appellants and why the duty for the extended period should not be demanded from them and penalty be not imposed on them. The appellants contested the show cause notice on the ground that the products, which are manufactured by them, are not hair oil and are ayurvedic medicines manufactured under the drug licence given by the FDA, Gujarat and they have produced affidavits of ayurvedic doctors to indicate that their product is not hair oil, but ayurvedic medicine. The Adjudicating Authority did not accept the contentions of the appellants and confirmed the demand, confiscated the stocks lying in the factory with an option to redeem the same on payment of fine and also imposed penalties on the appellant company as well as on the directors of the company. Hence, these appeals. 3. The ld. Advocate appearing on behalf of the appellant takes us through the show cause notice and the replies filed by them. He specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellants would indicate that they are very very negligent. She submits that note to Chapter 33 clearly indicate that even if products have therapeutic or prophylactic properties, they would be covered under Chapter 33. It is her submission that mere look at the carton of the products as manufactured by the appellants would indicate that these products are for the purpose of growth of the hair and nothing more than that. It is her submission that these products would at the most be called perfumed hair oils and cannot be at any stretch of imagination called as ayurvedic medicines. She submits that the drug license as taken out by the appellants would in any case not be of much help to the appellants, as the drug authorities have not categorically mentioned that these products are ayurvedic medicines. It is her submission that the appellants had, during the relevant period, never declared the process of manufacture or filed the cartons with the authorities and hence now, cannot claim that the show cause notice is time based. She relies upon the judgments of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Surat v. M/s. Zandu Pharmaceutical Works Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndan Oil made from Chandan Wood (Sandal Wood) has medicinal properties and is very useful and effective for external use Cahndan is a wood which has ingredients of many medicated oil and therefore is used as Medicine Other ingredients in this oil have also various medicinal properties I therefore recommend the usage of aforesaid medicines to may patients." Sd/- II "I Dr Sudan D Chaudhari aged about 44 year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the Revenue's claim that the said products are nothing but hair oil. It is also on record that the Revenue had drawn the samples of the appellants' product in 1996 and in 1999, but Revenue has not been able to produce the Deputy Chief Chemist's report of the samples drawn by them. In the absence of any evidence to indicate that these products are hair oil, the Revenue's case is on a weak footing. Without any evidence, a mere assertion that, on reading the carton would indicate that the products would fall under Chapter 33, as hair oil, is not a correct legal proposition. 8. Hon'ble Supreme Court in the case of M/s. Sharma Chemical Works (supra) has held as under: "12. We have heard the parties and considered the submissions made by them. We have also read the opinion of the majority Bench and the minority opinion of the Technical Member. It is a settled law that the onus or burden to show that a product fall within a particular Tariff Item is always on the revenue. Mere fact that a product is sold across the counters and not under a Doctors prescription, does not by itself lead to the conclusion that is not a medicament. We are also in agreement with the submission Mr. Laks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in 1996 (9) SCC 402 and the tests allegedly laid down in that decision for determining whether a product should be classified under Chapter 33 or Chapter 30. 3. The two tests according to the show cause notice for determining whether a product was classifiable as a pharmaceutical product under Chapter 30 of the Central Excise Tariff were (1) whether the products are being used daily and are sold without prescription by a medical practitioner; and (2) whether the products are available in General Store Department/Grocery shops. The department's case in the show cause notice is that as these two tests were not fulfilled the product failed to come within the prescription of pharmaceutical products in Chapter 30. 4. The mere decision of a court of law without more cannot be justification enough for changing the classification without a change in the nature of a product or a change in the use of the product or a fresh interpretation of the tariff heading by such decision. It is not the appellant's case that any of these circumstances were present in this case, besides the decision in Shree Baidyanath's case (supra) does not lay down, the test of classification as concluded by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that it is not a medicament. The court reaffirmed the test as categorically laid down in Shree Baidyanath, namely, that the burden of proof that a product is classifiable under a particular tariff head is on the revenue and must be discharged by proving that it is so understood by consumers of the product or in common parlance.. (See also Meghdoot v. Commissioner of Central Excise, 2004 (174) E.L.T. 14 (S.C.)] 9. From the above mentioned authorities, it is clear that in classifying a product the scientific and technical meaning is not be resorted to. The product must be classifiable according to the popular meaning attached to it by those using the product. As state above, in this case the appellants have shown that all the ingredients in the product are those which are mentioned in Ayurvedic Text Books. This by itself may not be sufficient but the appellants have shown that they have a Drug Controller's Licence for the product and they have also produced evidence by way of prescriptions of Ayurvedic Doctors, who have prescribed these for treatment of rickets. As against this, the Revenue has not made any effort and not produced any evidence that in common parlance the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
