A.R.LAKSHMANAN, J. - (1.) . The points involved in both the appeals are one and the same and, therefore, they were heard together by consent of parties. The issue involved in Civil Appeal No. 2072 of 1996 is:
(2.) WHETHER or not medicated cough drops and throat drops manufactured by the appellants in accordance with and under the licence issued under the Drugs and Cosmetics Act, 1940 for the manufacture of "Ayurvedic drugs" are classifiable as Ayurvedic medicaments for the purpose of levy of central excise duty. The issue for determination in Civil Appeal No. 10744 of 1996 is: Whether the products "Sloan's Balm" and "Sloan's Rub" are Ayurvedic medicines and are classifiable under Chapter Heading 3003-30 as contended by the appellants attracting nil rate duty OR classified under Chapter sub-heading 3003.10 chargeable to duty at 15% ad valorem. The facts briefly stated in civil appeal no. 2072 of 1996 leading to the filing of this appeal are as under:- 4.1 The appellants - M/s Naturalle Health Products (P) Limited, Hyderabad filed the classification list as required under Rule 173-B of the Central Excise Rules, 1944 with the assistant collector of central excise claiming classification of their goods under sub-heading 3003.30 read with erstwhile notification no. 32/89-CE dated 01.03.1989. The appellants were issued a loan licence to manufacture for sale of Ayurvedic drugs under the Drugs and Cosmetics Act, 1940 and the said loan licence was renewed from time to time. A show- cause notice was issued by the assistant collector of central excise calling upon the appellants to show cause why the said goods should not be classified as patent or proprietary medicaments under sub-heading 3003.10 of Central Excise Tariff attracting excise duty at the rate of 15% ad valorem. The appellants replied to the show-cause notice and denied that the said goods are not Ayurvedic medicaments and submitted that the grounds raised in the show-cause notice were not relevant for determining the classification of the goods. The assistant collector, after giving a personal hearing, vide Order dated 14.03.1991 held that the said goods are classifiable as patent or proprietary medicaments under sub-heading 3003.10 of the Central Excise Tariff and accordingly is assessable to duty thereon. The appeal filed by the appellants before the collector of central excise was dismissed on 21.02.1992 upholding the Order dated 14.03.1991 of the assistant collector. The appellants challenged the said Order by filing writ petition no. 4030 of 1992 in the High Court of Andhra Pradesh which was dismissed on 12.03.1993 on the ground of alternative remedy. The appellants filed an appeal to the CEGAT on the grounds set out in their memorandum of appeal. The CEGAT, New Delhi by its final Order dated 17.10.1995 by a majority of 2:1 dismissed the appeal and upheld the classification of the said goods as patent or proprietary medicaments under subheading 3003.10 instead of appellant's claim as Ayurvedic medicine under subheading 3003.30. The Vice-President opined that the matter needs to be referred to a larger bench keeping in view the importance of the issue involved in the industry as a whole. However, he agreed with the member (technical) on many points. Aggrieved by the said Order, the appellants preferred the present appeal under section 35 L(B) of the Central Excise and Salt Act, 1944. Civil Appeal No. 10744 of 1996
(3.) THE short facts are: 5.1 THE appellants manufactured two medicaments known as "Sloan's Balm" and "Sloan's Rub" out of the ingredients which are mentioned in the texts on the Ayurvedic system of medicine and in accordance with the principles therein. According to the appellants, the issues in their appeal stand covered by the decisions in the case of Richardson Hindustan Limited v. Collector of Central Excise, as confirmed by this Court reported in 1989 (42) ELT A100 and the decision in the case of Shri Baidyanath Ayurved Bhawan Private Limited v. Collector of Central Excise, which decisions have been confirmed by this Court in 1996 (83) ELT 492. The appellants filed exhibit B1-B3 list of 'authoritative texts' in English, Hindi and Telugu on the Ayurvedic system of medicament in which the ingredients of the two products are mentioned. They also filed exhibits C1 and C2 licences issued by the Director, Indian Medicines and Homeopathy, Hyderabad for the manufacture of Ayurvedic medicine, namely, "Sloan's Balm and "Sloan's Rub". The appellants filed classification list in respect of the said products classifying the same under Chapter sub-heading 3003.30 as Ayurvedic medicine attracting nil rate of duty. Two show- cause notices were issued upon the appellants to show cause as to why the said products should not be classified under Chapter sub-heading 3003.10 as patent or proprietary medicine attracting duty at 15 % ad valorem. The appellants replied to the show-cause notice relying upon the tribunal's decision in the case of Richardson Hindustan Limited (supra) The assistant collector, however, classified both the products under Chapter sub-heading 3003.10 chargeable to duty at 15% ad valorem. The appellants filed two appeals to the collector of central excise (appeals) and also filed before the collector (appeals), a report in respect of clinical trials conducted in respect of the said two products. The collector of central excise remanded the case to the assistant collector for de novo adjudication. The assistant collector issued two revised show-cause notices. The appellants sent a reply to the show- cause notices. The assistant collector by two separate orders rejected the contentions of the appellants. Two appeals were filed before the collector central excise (appeals). The collector of central excise allowed the appeals and set aside both the orders of the assistant collector and upheld that the products are Ayurvedic medicines and are classifiable under Chapter heading 3003.30. Aggrieved by the said Order, the collector of central excise filed an appeal to the CEGAT, which by its order allowed the appeal. Aggrieved by the said decision of the tribunal, the present appeal has been preferred by the appellants - Akin Laboratories Ltd. We heard Mr. V. Lakshmikumaran, learned counsel and Mr. Joseph Vellapally, learned senior counsel for the respective appellants and Mr. Raju Ramachandran, learned additional solicitor general for the respondent in both the appeals.;