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TMI Blog2018 (1) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... atio and finding arrived by the Tribunal, Chennai. The impugned order has erred in classifying the product as Ayurvedic medicine and it should have been correctly classified as food supplement as pleaded by the Revenue - appeal allowed - decided in favor of Revenue. - Customs Appeal No.53498 of 2014 - Final Order No.50102/2018 - Dated:- 10-1-2018 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technical) Shri R.K. Majhi, Authorized Representative (DR) for the Appellant Shri B.B. Sharma, Advocate for the Respondent ORDER Per: B. Ravichandran The Revenue is in appeal against order dated 09/04/2014 of Commissioner (Appeals), New Custom House, New Delhi. The dispute in the present case is regarding correct classification of bulk Reishi Gano Powder, bulk Ganocelium Powder imported by the respondent. The claim of the respondent is to classify the product as Ayurvedic Proprietary Medicine under heading 30039011 claiming the benefit of Notification 53/2011 (Sl. No.363). The Revenue did not agree with the same and intended to classify the product as food supplement under CTH 21069099. The Original Authority held against the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal by the Revenue. He submitted that though the products examined by the Tribunal, Chennai are identical to the one now under dispute, certain crucial supporting evidence have not been submitted/examined before arriving at the said decision. He strongly pleaded that they have the evidences to make the distinction from the findings recorded by the Tribunal, Chennai on the similar product. It is his submission that the product under import are recognised by the State Authorities/ Ayush Authorities and were duly licenced for manufacture and distribution. Further the ingredients of the product under import were indicated in the authoritative text/granth as explained by the Drug Authorities. Further he relied on the HSN Note 16 which he submitted has not been fully reproduced by the Tribunal in Chennai. In other words, it is the submission of the learned Counsel for the respondent that in para 13.2 of the order of the Chennai Tribunal, the full HSN note has not been reproduced. It is submitted that the crucial aspect is that similar preparations, however, intended for prevention or treatment of diseases or ailments are excluded (Heading 30.30 or 30.04) . He submits the products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to appellants, these documents would establish that the products are Ayurvedic medicaments which merit classification under Chapter 3003.39. 10. The twin test laid down by the Hon'ble Apex Court in the Richardson Hindustan case judgment cited by the Ld. Advocate for the appellant has indeed laid down the following tests to justify classification as product under Ayurvedic Medicament under Chapter Heading 3003 : (i) that the product should be known as medicament in the common parlance and, (ii) the ingredients should be mentioned in Ayurvedic text books. We therefore intend to subject the impugned products to these two tests. Whether the product is known as APM, a medicament or for that matter, in any common parlance. 11.1 Though strong arguments and reliance on above discussed documents are advanced by the Learned Counsel to contend that the products are Ayurvedic Proprietary Medicines, on perusal of the label of the product we cannot find anything suggesting so. Bottles of the products GL were placed before us by Ld. Sr. Advocate. For ready reference, a scanned copy of the bottle label is reproduced below: This space is purposely put blan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c claim about what the products can do to the body. Any food may be categorized as a drug, if it is claimed that the product is for treatment, cure prevention and mitigation of a disease. The important word is disease. When a product is offered as a specific treatment for a disease, it becomes a drug.... It is very important to bear in mind that you are recommending a food supplement and that you do not intend to be misconstrued as a recommending a drug. From the investigations conducted with distributors and stockists, it is seen that a number of stockists / distributors from whom statements were taken categorically stated that the RG and GL are not used to prevent any specific diseases but are only used to improve general health; that the company had informed them to promote the product as food supplement only; that these capsules basically are used as food supplement and are non-prescription drugs; that RG and GL capsules which had come as food supplement till December 2001, had started to market as APMs only from 2002; that however there is no change in composition or quality of RG and GL. 11.4 Earlier, while marketing the said products, the accompanying pamphlets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross examined before the adjudicating authority, on which occasion also, he deposed that he did not consider 'Ganoderma' and 'Shiitake' as ayurvedic medicines. It also emerges that in response to a letter from the Director of Drugs Control, Tamil Nadu, the said HOD, Ayurveda had opined as under : These items (Chatraka Buchatra) are basically food supplements may be used to give therapeutic value with some other drug to be given for identified diseases and that these items cannot be used independently to cure any disease 12.10 The Drug Licence by itself cannot be the basis for classification. The classification for the purpose of collection of revenue is to be on the basis of Excise / Customs legislations. The primary object of Excise Act being to raise revenue, the classification of the product so as to determine the rate of duty has to be considered independent from the Drugs and Cosmetics Act, 1940 and like legislations. The Hon'ble Apex Court in the case of Shree Baidyanath Ayurved Bhawan Ltd. (supra) opined in para 41 as under : 41. True it is that Section 3(a) of the Drugs and Cosmetics Act, 1940 defines Ayurvedic, Sidha or Unani D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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