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TMI Blog2018 (5) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... e demands on merits itself, question of penalties on the company as well as on the individuals who are Directors would not arise, accordingly all the penalties are set aside. Appeal allowed - decided in favor of appellant. - E/3435/2012, E/3437/2012, E/3436/2012, E/28564/2013, E/20079/2015, E/22009/2015, E/30736/2017, E/3222/2012 - FINAL ORDER No. A/30495-30502/2018 - Dated:- 25-4-2018 - M V RAVINDRAN, MEMBER (JUDICIAL) And C J MATHEWS, MEMBER(TECHNICAL) S/Shri M.S. Nagaraja, V.S. Sudhir and Venkat Prasad, Advocates for the Appellant Smt. B.V. Siva Naga Kumari, Commissioner and Shri Bhagath Deepak, Asst. Commissioner /ARs for the Respondent ORDER [ Order Per : M. V. Ravindran ] 1. By this common order, we are disposing of the following appeals: Appeal No. Order in Original No. E/3435/2012 47/2012-Adjn (Commr) CE, dated 30.08.2012 E/3437/2012 47/2012-Adjn (Commr) CE, dated 30.08.2012 E/3436/2012 47/2012-Adjn (Commr) CE, dated 30.08.2012 E/28564/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s like Puma Ayurvedic Herbal Pvt. Ltd. The adjudicating authority did not agree with the contentions raised and confirmed the demands so raised alongwith interest and imposed penalty on the company as well as on individuals who were Directors. The adjudicating authority has dropped the proceedings for confiscation of the seized goods NGHHO on the ground that the goods were within the factory premises and hence question of confiscation may not arise. 4. Ld. Counsel submits that the product NGHHO is manufactured by the appellant based upon the drug licence issued by the Drugs Controller Department of Ayush, Government of Andhra Pradesh in Form 25-D under Drugs and Cosmetics Act, 1940 and Rule 154 of Drugs Cosmetics Rules, 1945 which prescribes for issue of licence for manufacturing of Ayurvedic (including Siddha or Unani) Drugs; based on such a certificate and the licence, appellant classified the product NGHHO under chapter 30 and cleared the same on payment of applicable rate of duty under section 4 of Central Excise Act, 1944; Appellant s Director in his statement had stated exact process of manufacture which states specifically that Ayurvedic herbal paste and herbal powder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002(139) ELT 610 (T-LB) (xiii) CCE Delhi Vs. Ishaan Research Lab (P) Ltd 2008(230) ELT 7 (SC) (xiv) CCE, Mumbai IV vs Hamdard (Wakf) Laboratories Ltd 2003(157) ELT 217 (Tri.-Del) (xv) CCE Chennai-I Vs. Impcops 2016(331)ELT 479 (T-Chen) (xvi) CCE Cochin Vs. Arshik Herbal Remedies (India) 2004 (168) ELT 482 (T-Bang). 5. He also refers to the judgment of Hon ble Apex Court in the case of CCE, Chennai vs Hindustan Lever Limited 2015-TIOL-194-SC-CX as to what are the guidelines or the principles need to be followed for classification of the goods and submits that the said guidelines were followed recently by Hon ble High Court of Gujarat in the case of Vasu Pharmaceuticals Pvt. Ltd [2017 (350) ELT 166 (Guj.)] for classification of similar product i.e. Trichup oil and held that the product merits classification under chapter 30. 6. Ld. Commissioner (AR) appearing alongwith Asst. Commissioner (AR), after taking the bench through the entire case records, submits that chapter note 2 of chapter 33 clearly defines that the product is to be considered as cosmetic even if it has subsidiary therapeutic properties; chapter Note 1 (e) of chapter 30 says that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission that as far as common parlance test is concerned, certain users reviews filed are of no consequence as the statements of stockists and distributors indicate that the goods are not sold as an ayurvedic medicament and tries to bring about inconsistency in the statement of the Director as to the product manufactured can be used for treatment of premature baldness but has wrongly stated that baldness is also present in the females which is incorrect as report of studies indicate that premature baldness is mostly of Indian males. 8. We heard both sides and perused the records. 9. The issue that needs to be decided in this case is regarding the classification of the product NGHHO is whether it would fall under chapter 30 as claimed by the appellant or under chapter 33 as claimed by revenue. We have given anxious thought to the detailed submissions made by both sides and perused the records. 10. On perusal of records, the following undisputed facts emerged. (a) That appellant is manufacturing NGHHO based upon the licence granted by Drugs Controller, Department of Ayush, Govt. of Andhra Pradesh for manufacturing and sale of Ayurvedic drugs. (b) The licence is issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 302- 303 in appeal memoranda) which reads as under: This is to certify that the product Nuzen Gold Herbal Hair Oil manufactured by M/s Nuzen Herbal Pvt Ltd. holding License No. T-1910/Ayur situated at D No. 8-60/1, IDA, Bollaram, Bachupally, R R District is an ayurvedic product, and it is manufactured as per Ayurvedic Norms. The ingredients of the said oil are highly concerned with the indications specified there for. And also the ingredients are mentioned in authoritative books of Ayurveda. 13. The above reproduced text of the communication from the competent authority puts to rest all the doubts as to whether the ingredients in the product manufactured by the appellant were included in the authoritative books of ayurveda or otherwise. It is also to be noted, as demonstrated by Ld. Counsel, that all the ingredients which are going in the manufacturing of the said product NGHHO are mentioned in Bhava Prakasha and Ayurvedic Pharmacopoeia of India which are accepted and listed as authoritative books under section 3 (a) and (h) of the Drugs Cosmetics Act, 1940. 14. The perusal of the label affixed on the product NGHHO indicates that it is clearly mentioned as Ayurv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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. 15) After straitening the position in law, we now proceed to apply this principles to the present case. 16) As pointed out above, the product in question, Vaseline Intensive Care Heel Guard, is marketed as a solution for cracked heels and it is claimed that this solution is specially developed by the scientists at Vaseline Research. The composition of this product includes salicylic acid I.P. 1.5% w/w. lactic acid 8.0% w/w. Triclosan 0.1% w/w. Cream base q.s. Salicylic acid is described as keratolytic substance having bacteriostalic and fungicidal properties used in the treatment of fungus infection of the skin. The Tribunal, while deciding that the aforesaid product is a medicament, pointed out that the product was formulated and essentially used for treatment of 'cracked heels', protection from further cracks in the human heels due to extreme climatic conditions and low humidity, constant exposure of feet to water and due to absence of shoe or other protection while walking. It also found that this pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by itself lead to the conclusion that it is not a medicament. (iii) The main criteria for determining classification are normally the use it is put to by the customers who use it. The burden of proving that the product is understood by the customers as hair oil is on the Revenue. (iv) The Board circular dated 5th December, 1991 clearly stipulates that in case of doubt the matter should be referred to the Drug Controller. If the Drug Controller opines that it is an Ayurvedic medicament and the department still entertains any doubts, they could have referred the matter to the Adviser, Ayurveda/Sub-Commissioner. (v) 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 appearance of the person concerned may improve. What is to be seen is the primary use of the product. (vi) The extent or the quantity of medicament used in a particular product will also not be a relevant factor. Normally, the extent of use of medicinal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edicinal element in a product is minimal does not detract from it being classified as a medicament. Another ground for holding against the petitioner is that it is not the case of the petitioner that the product is being sold only at chemists and that the product is available across the counter. In this regard the Apex Court has held that the mere fact that a product is sold across the counters and not under a Doctor s prescription, does not by itself lead to the conclusion that it is not a medicament. According to the Tribunal the product is supposed to contain of 80% til oil and 20% Trangraj oil, made siddhi with various other ingredients. The meaning of term made siddhi was not clearly explained. It however, appears that these are ingredients that give the product its medical properties. With the exception of dhatura (15%), other ingredients contained therein are 1% or 0.5%. There is no material to show that in these proportions, each of the ingredients or all the ingredients acting in combination confer on the other oils any therapeutic or prophylactic properties. In this regard, it may be pertinent to refer to the certificate issued by the Food and Drugs Control Administr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here Alma Lio Hair Oil was classified under Chapter 33 of the Central Excise Tariff Act 1986. Lastly, she submits that the hair oil is manufactured under the Drugs Act but it falls under the category of Cosmetic and it will have to be classified under Chapter 33 of the Central Excise Tariff Act. (3) On the other hand Shri Shivadass, the learned counsel for the respondent justified the order of the Commissioner (Appeals). He submits that the Commissioner (Appeals) has already relied upon the CBEC Circular No. 333/49/97/CX dated 10.09.1997. He also submits that the Commissioner (Appeals) has also examined the Drug License as well as the ingredients of the product before granting the relief. (4). After hearing both sides and perusal of record, it appears that the Hair Oil with the different flavor and different components is manufactured by different companies. The matter has reached to the Supreme Court where the Hon ble Supreme Court has decided in some cases in favour of the appellant and in some cases in favour of the Department. In the case of Dabur India Ltd. Vs. CCE, Jamshedpur 2005 (182) E.L.T. 290, the Hon ble Supreme Court has decided the matter in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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