JUDGEMENT
Arun Kumar, J. -
(1.)THE appellant claims to be a manufacturer of Ayurvedic products which are intended to cure certain ailments of the human body. A question has arisen as to whether the products manufactured by the appellant fall within the category of medicaments or cosmetics. Answer to this question determines as to whether the goods are classifiable under the Central Excise Tariff Act, 1985 as cosmetics under Chapter 33 or as medicaments under Chapter 30. As cosmetics the rate of excise duty is quite high while as medicament the products attract nil duty. THE following products manufactured by the appellant are under consideration:
(1). (xvii) Puma Neem Facial Pack (Neemal) (2). (xviii) Puma Anti-Pimple Herbal Powder (Pimplex) (3). (xix) Puma Herbal Facial Pack (Herbaucare) (4). (xx) Puma Herbal remedy for Facial Blemishes (5). (xxi) Puma Herbal Massage Oil (6). (xxii) Puma Herbal Massage Oil for Women (7). (xxiii) Puma Hair Tonic Powder (Sukeshi) (8). (xxiv) Puma Scalp Tonic Powder (Scalpton) (9). (xxv) Puma Anti-Dandruff Oil (Dandika) (10). (xxvi) Puma Shishu Rakshan Tel (11). (xxvii) Puma Neem Tulsi
(2.)THE appellant has a licence to manufacture these and other products from the Drug Controller under the Drugs and Cosmetics Act. According to the learned counsel for the appellant all the above items are produced from ingredients found in Ayurveda text books. THEy are manufactured as per the Ayurveda pharmacopoeia and have curative, therapeutic or prophylactic value. THEy are basically meant to give relief in body ailments. THEy are not items of cosmetics. 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 approval of this Court also vide Collector v. Richardson Hindustan Ltd.. 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. For this test it will have to be seen whether in common parlance the item is accepted as a medicament. If a product falls in the category of medicament it will not be an item of common use. A user will use it only for treating a particular ailment and will stop its use after the ailment is cured. THE approach of the consumer towards the product is very material? One may buy any of the ordinary soaps available in the market. But if one has a skin problem, he may have to buy a medicated soap. Such a soap will not be an ordinary cosmetic. It will be medicament falling in Chapter 30 of the Tariff Act.
II. Are the ingredients used in the product mentioned in the authoritative text books on Ayurveda?
The two tests are recognized even by the Central Board of Excise and Customs and the Board had vide its letters dated 3rd October 1991 and 5th December, 1991 directed the Assistant Collector to decide the classification of the products in question by applying the aforesaid two tests.
The learned counsel for the appellant has argued that the products of the appellant satisfy both the above tests and, therefore, the CEGAT was wrong in classifying them under Chapter 33 as cosmetics. According to the learned counsel the products in question have a special use. They are not items of common use. Only those who want to treat a particular ailment will go for the particular product of the appellant. The use of a product by the customers i.e. how the consumers take to a product is a very useful method of determining the classification of products. What is to be seen is whether the products are likely to be in common use by normal consumers. Common parlance meaning and understanding is a strong factor in the determination of classification of products. One need not resort to scientific or technical meaning of the terms used.
(3.)SO far as the other test is concerned, the learned counsel for the appellant has placed on record material from the Ayurvedic texts or Pharmacopoeia in support of each product which is subject matter of the present appeal to show that the ingredients of each product are independently mentioned in the Ayurvedic texts. The ingredients are natural Ayurvedic product like shrubs, herbs, leaves, fruits, nuts, flowers, wood and bark of particular trees. In support of his contention the learned counsel for the appellant placed before the departmental authorities lot of material in the shape of certificates and letters from doctors, Ayurvedic practitioners, experts and above all from the users of the products in question.
The Collector (Appeals) who decided the issue in favour of the appellant among other things, relied on the opinion obtained by the Assistant Collector as per Board's Circular from the Directorate of Ayurveda Maharashtra, Bombay vide their letter No. AYURVEDIC-2/Misc/PUMA/1989/10563 dated 1.12.89 which is quoted as under:
"With reference to your letter dated 12.9.89 on the subject opted above, the samples of products of M/s. Puma Ayurvedic Herbals (P) Ltd., Nagpur (i.e. 11 items) were referred to Dravyaguna Department of one of our institution for carrying out tosts. These items were tested by Organoloptic Method. Now the Professor and Incharge of Dravyaguna Department has opined that the raw materials used for preparation of the above items are described in Ayurvedic texts. As such, all ingredients are Ayurvedic raw material. Treatment of certain skin diseases is done by Lep, Pralep and Pradheh. This type of treatment is described in Ayurvedic Texts. In view of the above, the samples of 11 items sent by you vide your letter under reference can be classified as "Proprietary Ayurvedic Medicines".
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