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TMI Blog2018 (4) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, excluded from the ambit of examination for the purpose of this ruling. The other products are either already specified under heading 3304 (like talcum powder, sunscreen, moisturising lotion etc.) and, therefore, cannot be considered for inclusion under heading 3004. The remaining products mentioned in the list submitted by them are not offered primarily as medicaments and, therefore, not to be included under heading 3004. Ruling:- Preparations for the care of the skin namely, Rupam (Pimple Pack) and Pailab (Anti-Crack Cream), in the list submitted by the Applicant of the Application are classifiable as Medicament under heading 3004 of the Customs Tariff Act, 1975 - Preparations listed as Swarnajyoti, Sunayana and Tarumitra-60 have not yet come into existence, and, therefore, no rulings are pronounced on their classification - The remaining products mentioned in the list submitted by them are not offered primarily as medicaments and, therefore, not to be included under heading 3004. - Case Number 01 of 2018 - - - Dated:- 9-4-2018 - Vishwanath Membe And Parthasarathi Dey Member Applicant s representative heard Sri Anjan Dasgupta, Advocate Sri P K Mukherj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of freshness, increases lustre of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples. Romancho (Vanilla) Body Talc Soothing agent having anti-bacterial, anti-fungal anti-septic activity. Prevents excessive perspiration. Feeling of freshness, increases lustre of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples. Romancho (Kewra) Body Talc Soothing agent having anti-bacterial, anti-fungal anti-septic activity. Prevents excessive perspiration. Feeling of freshness, increases lustre of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples. Swarnabho Skin Polishing and fairness oil Keeps skin soft, fair, glowing, stops pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discolouration and burning sensation of skin. Also helps growing of your baby. Komal Shree G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kin Toner Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. Twaka Snigdha (Orange) Skin Toner Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. Twaka Snigdha (Neem) Skin Toner Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. Twaka Snigdha (Rose) Skin Toner helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. Sukhparash Face Body Cream Prevents fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue. The first product, namely the toner, does not contain any active ingredient for curing the disease but is used for cleansing the skin as an aid to acne treatment. The petitioner sought an Advance Ruling on commodity Classification. After that, the AAR refers to several decisions of the Apex Court that have laid down common parlance as the appropriate test for determining the meaning or connotation of words or expressions describing an article in a Tariff Schedule. According to the AAR, common parlance test is not a rigid formula capable of being applied in all situations. The test ceases to be applicable if the products referred to are couched in technical/scientific language, or there is a definite indication in the Tariff Schedule negating application of this standard test. 5. The AAR also points out that most of the skin care or toilet preparations containing some recognized medical ingredients and professing to cure or mitigate the skin diseases for which drug licenses have been obtained are held by the apex court as medicaments notwithstanding the fact that they have cosmetic value too (for example, prickly heat powder, anti-dandruff shampoo, anti-pimple herbal powder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished, it cannot be placed under Chapter 30 as a Medicament. 9. The AAR s observations are primarily based on Puma Ayurvedic Herbal Pvt Ltd [2006 (196) ELT 3 (SC)]. In its written submission the Applicant also refers extensively to the above judgment, which has traversed the history of Supreme Court s observations on the related questions and issues while deciding upon the classification of the petitioner s skin care products. It has direct relevance to the Applicant s case and needs to be discussed in some detail for clarity on the legal position regarding classification of goods in the present context. 10. In Puma Ayurvedic Herbal Pvt Ltd (supra) the Court observes, In order to determine whether a product is a cosmetic or a medicament a twin test has found favour with the Courts. The test has the approval of this Court also vide Collector Vs. Richardson Hindustan Ltd [1989(42) ELT A100 (SC)/2004 (9) SCC 156]. There is no dispute about this as even the Revenue accepts that the test is determinative for the issue involved. The tests are I. Whether the item is commonly understood as a medicament which is called the common parlance test (emphasis added). For this test, it wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the practitioners in Ayurvedic medicine, the dealers and the licensing officials treat the products in question as Ayurvedic medicines that fact gives an indication that they are exclusively Ayurvedic medicines or that they are used in the Ayurvedic system of medicine. This is especially so when all the ingredients used are mentioned in the authoritative books on Ayurveda. From the above and other judgments, the Apex Court observes that the law is settled on the applicability of the twin test for determination of the classification of a product (emphasis added). 12. In its judgment dated 13/04/2009 in Baidynath Ayurved Bhawan Ltd (CA No. 4048 of 2001), the Apex Court revisited the question of the twin test for determining whether the product is an Ayurvedic Medicament or not. It observes that the twin test noticed in Puma Ayurvedic Herbal (P) Ltd continue to be relevant. The court holds that classification should be based on the popular meaning and understanding attached to such products by those using them and not the scientific and technical meaning of the terms and expressions used (emphasis added). The approach of the consumer or user towards the product, thus, assumes s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic skin disease or skin disorder. 15. Note 1 (e) to Chapter 30 states that the Chapter does not cover preparations of headings 3303 to 3307, even if they have therapeutic or prophylactic properties. In the present context, it means a skin care preparations, if it otherwise falls under heading 3304, shall be excluded from Chapter 30, even if it has therapeutic or prophylactic properties. But what should be the yardstick to determine whether a product qualifies to be included under heading 3304? 16. The discussion in Puma Ayurvedic Herbal Pvt Ltd (supra) is relevant. The apex court says, The learned counsel for the respondent drew our attention to Note 2 of Chapter 33 of the Central Excise Tariff which is as under: Note 2. Heading Nos.33.03 to 33.07 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable for use as goods of these headings and put up in packings with labels literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialized to such use and includes products whether or not they contain subsidiary pharmaceutical or antise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of the GST Act. 18. Conclusions reached in Puma Ayurvedic Herbal Pvt Ltd (supra) and followed by the AAR in M/s Guthy Renker Marketing Pvt Ltd [2009 (248) ELT 932 (AAR)], based on earlier constructions of Notes 2 and 5 to Chapter 33 in the Excise Tariff Act, 1985 are, therefore, need to be revisited in the context of the GST Act. In the absence of the restrictive phrases attributed to Notes 2 and 5 to Chapter 33, heading 3304 should now include all preparations for the care of skin, whether cosmetics or not or having therapeutic or prophylactic properties of whatever degree, excluding the ones that are medicaments covered by Chapter 30. A preparation for care of skin, unless already specified under heading 3304, should, therefore, first be examined concerning its suitability for inclusion as a medicament in heading 3004 by applying the twin tests set out in Puma Ayurvedic Herbal Pvt Ltd (supra) and Baidynath Ayurved Bhawan Ltd (supra). If it fails the test, it should be classified under heading 3304. On the other hand, if the skincare preparation is specifically included under heading 3304 (for example sunscreen or suntan preparations, talcum powder, face powder, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are uniformly endorsing the Applicant s products as showing good results. It is not clear whether the good results relate to enhancing appearance of the skin or treatment of a disease. We are not to involve ourselves in examining efficacy of the Applicant s products. Our focus will be to ascertain from available materials what the Applicant is offering and consumer is using. A more objective way to examine it is to analyse the information contained in the labels attached to the product when offered in retail set up. The information provided on the labels may be considered as written communication from the manufacturer to the consumer as to what is being offered. If a customer purchases the product it may be presumed that he or she accepts the offer and believes in the information contained in the label. 22. In response to an enquiry made regarding the products in communication dated 03.04.2018 the Applicant has stated that three (03) of the products in the list submitted by the Applicant, namely, Swarnajyoti, Sunayana and Tarumitra-60, are yet to be manufactured by them and are presently not in existence. This was also admitted by the Applicant during Personal Hearing on 04. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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