- (1.) LEAVE granted.
(2.) CHALLENGE in this appeal is to the order passed by a division Bench of the Bombay High Court allowing the writ petition filed by the respondent. Challenge in the writ petition was to the show cause notice dated 29th April, 2005 issued by the Commissioner of Customs and Central Excise, Nagpur (hereinafter referred to as the 'commissioner') on the ground that the Commissioner was seeking to re-open and re-litigate the issues which have been finally concluded by the decision of the High Court and this Court in favour of the writ petitioner and, therefore, the said show cause notice was without jurisdiction and had been issued in arbitrary exercise of power and that it is an abuse of process of law. The petition was resisted on the ground that at the stage of show cause notice there should not be any inference. In fact the notice was issued pursuant to the liberty given by this court in C. A. Nos. 7896-97/2003 disposed of by a three-Judge bench by order dated December 7, 2004. The High Court accepted the position that normally the High Court should not interfere at the show cause notice stage. But in view of the factual scenario the Court entertained the writ petition and decided in favour of the respondent. Background facts in a nutshell are as follows: the respondent is a manufacturer of various products including Vicco Vajradanti and Vicco Turmeric which are stated to be ayurvedic medicines. A show cause notice dated 8th November, 1976 was issued requiring the respondent to satisfy as to why the said products should not be classified as "cosmetics" and not "ayurvedic medicines". This show cause notice is hereinafter referred to as the "ist SCN". After hearing the respondent, the Commissioner under order, dated 4th june, 1977 classified the said products as "cosmetics". The same was challenged by the respondent by way of Civil Suit no. 143 of 1978 in the Court of Civil Judge, Senior Division, thane, which came to be decreed in favour of the respondent holding that the said products were "ayurvedic medicines", and therefore, cannot be classified as "cosmetics". The appellants carried the matter in an appeal by filing First appeal No. 613 of 1982 before the High Court without any success as the same was dismissed on 27th April, 1988 holding that the products were "ayurvedic medicines". The special Leave Petition preferred by the appellants being SLP no. 1918 of 1989 was dismissed on 6th September, 1990. Simultaneously, the respondent had also filed the Special leave Petition No. 14082 of 1988 which came to be disposed of by an order dated 19th April, 1993, while affirming the judgment of this Court with a rider that the claim for refund of the amounts already paid, would be subject to ascertaining whether the amounts were passed on to the purchasers or not, and that the consequential relief shall be subject to the provisions of section 11b of the Central Excise and Salt Act, 1944 (in short the 'act') as amended by Act 40/1991. On 28th February, 1986, Central Excise Tariff Act, 1985 (in short 'tariff Act') was introduced, to be effective from Ist march, 1986. Under the Old Tariff Act, the ayurvedic medicines fell under the Notification No. 234 of 1982, the products being listed at Sl. No. 21. In term of the Tariff Act, the product was sought to be classified by the respondent under Chapter 30 sub-heading 3003. 30 and the same was approved by Assistant Commissioner, Nagpur, by his order dated 6th October, 1986. Pursuant to the direction by the Commissioner, a show cause notice dated 3rd July, 1987 was issued requiring the respondent to show cause as to why the products should not be classified as cosmetics falling under Chapter 33. This was the second Show Cause Notice in relation to the same products, and hereinafter is referred to as the "2nd SCN". After the reply being filed to the 2nd SCN, the same was recalled under the order dated 21st June, 1989. The matter was, however, carried in appeal before the commissioner of Central Excise (Appeals) but the same was withdrawn on 26th December, 1989. On 31st October, 1996, the Central Board of Excise issued a circular withdrawing its earlier clarification dated 12th may, 1989 in respect of Vicco Products and asked the authorities to reopen and finalise the classification of Vicco products on the basis of the judgment in Shree Baidyanath bhavan Vs. CCE Nagpur, reported in 1996 (83) ELT 492 : 1996 (9) SCC 402. Consequently, fresh show cause notices dated 2nd may, 1997, 18th September, 1997 and 27th October, 1997 came to be issued requiring the respondent to satisfy as to why the products should not be classified as "cosmetic" falling under Chapter 33. These three show cause notices are hereinafter referred to as the "3rd SCNs". Meanwhile, by Telex dated 8. 9. 1997, the Board further clarified that the circular dated 31. 10. 1996 is general in nature and the Vicco products having been subjected to the specific judgment and order of the High Court affirmed by this Court, the circular would not have overriding effect. The department further sought opinion of the Law and Judiciary Department on 13. 11. 1997. Thereafter, the Union of India moved an application being IA-1 of 1999 in this Court in Civil Appeal No. 2123 of 1993 arising out of the SLP No. 14082 of 1988 which was filed by the respondent for clarification of the order dated 19th April, 1993 with reference, to Shree Baidyanath's judgment (supra ). On 17. 07. 2000 the said application was withdrawn stating that the authorities will act in accordance with the provisions of law, which statement was recorded by this Court while disposing of the said application. On 14. 5. 2001 with reference to the 3rd SCNs, the Deputy commissioner passed orders classifying the respondent's products as "cosmetics" falling under Chapter 33. The respondent preferred appeal before the Commissioner of central Excise (Appeals) which came to be allowed by an order dated 10. 01. 2002. The appellant carried the matter in appeal before CEGAT, which came to be dismissed by an order dated 03. 02. 2003. The appellant filed special leave petition before this Court. The same were converted into the Civil Appeals no. 7896-97 of 2003 and the appeals were dismissed by this court on 07. 12. 2004. Again, on 29. 04. 2005 a fresh show cause notice came to be issued requiring the respondent to satisfy as to why the products should not be held as products under Chapter 33. The same was questioned before the High Court and by the impugned judgment the same was quashed. 6. The stand of the appellants in support of the appeal is that the liberty granted by this Court in the earlier case was on the footing that there was need for factual adjudication on applying correct position. In the earlier round of litigation the foundation of the revenue's case was the decision in Shree baidyanath Ayurved Bhawan's case (supra ). This Court categorically held in the said case as follows: 2. In this connection your kind attention is also invited to the Board's Circular No. 11/91-CX-1 dated 19. 4. 03 (copy enclosed) whereby the Board had circulated order No. 22/91-C, dated 8. 1. 91 of cegat in the case of CCE, Indore Vs. M/s. Shree baidynath Ayurved Bhavan Ltd. to the fluid formations. The Hon'ble Tribunal relying on its earlier orders No. 438-439/85-C, dated 7. 6. 1985 (1985) (11) ELT 175 (tribunal) and No. 714-715/90-C, dated 10. 7. 90 (1991 (51) ELT 502 (tribunal), all in the cases of M/s. Shree Baidyanath Ayurved bhavan is not an Ayurvedic drug or medicine and it is appropriately classificable under heading No. 33. 06 of the. CETA, 1985. Aggrieved by the judgments of the CEGAT the assessee had gone in appeal to Supreme Court. The appeals of M/s. Dabur India Ltd. on the same issue were also tagged with the appeal of Shree Baidyanath Ayurved bhavan Ltd.
(3.) NOW the Hon'ble Supreme Court vide its judgment dated 30. 3. 1995 (1996 (83) ELT 392 (SC) (copy enclosed), has dismissed the appeal of M/s. Shree Baidyanath Ayurved Bhavan Ltd. and M/s. Dabur India Ltd. and upheld the judgments of cegat wherein it had been held that the product "dant Manjan Lal" is a toilet preparation and not a medicinal preparation (Ayurvedic) and therefore not classifiable as a medicine (Ayurvedic) and accordingly not eligible for the benefit of exemption notification. The judgment of Supreme Court is being circulated to all the field formations of CBCE for necessary action in the matter. Therefore, keeping in view the aforesaid judgment of Supreme Court the Board has decided to withdraw its aforesaid instructions contained in letter No. F. No. 1031/14/88-CS. 3 dated 12 5. 1989. You may therefore decide classification of the goods in question in the light of Hon'ble Supreme court's said judgment under intimation to the Board.;