Holding

"Himtaj oil" is an Ayurvedic medicament and must be classified under sub‑heading 3003.30.

Summary

M/s Pandit D.P. Sharma, the manufacturer of "Himtaj oil", classified the product as an Ayurvedic medicine under tariff sub‑heading 3003.30 of the Central Excise and Salt Act, 1944. The Revenue issued a show‑cause notice seeking re‑classification as a perfumed hair oil under sub‑heading 3305.10, and the Assistant Collector accepted the Ayurvedic classification based on a drug licence, a letter from the Superintendent of Ayurvedic Department, a study report, a market‑inquiry report by the Range Officer, a re‑testing report and an SSI registration certificate. The Revenue appealed; the Commissioner (Appeals) and the Customs Excise and Gold (Control) Appellate Tribunal reversed the decision, holding that there was no proof the product was prescribed by medical practitioners or used by the public as a medicine. On appeal, the Supreme Court examined the evidence, particularly the Range Officer’s report showing that dealers, retailers, chemists and customers regarded the oil as an Ayurvedic medicament, and found the Assistant Collector’s decision well‑founded. Consequently, the Court dismissed the Revenue’s appeal, confirming that "Himtaj oil" is an Ayurvedic medicament for excise classification purposes.

Issues considered

Whether "Himtaj oil" should be classified as an Ayurvedic medicine under tariff sub‑heading 3003.30 or as a perfumed hair oil under sub‑heading 3305.10 of the Central Excise and Salt Act, 1944.

Legislation cited

Central Excise and Salt Act, 1944s. Tariff Item 3003.30, s. Tariff Item 3305.10

Subjects

classificationAyurvedic medicinecentral excisetariffHimtaj oilevidencemarket perception

Judgment

COMMISSIONER OF CENTRAL EXCISE. CALCUTTA-IV A
V.

M/S. PANDIT D.P. SHARMA

APRIL 30, 2003

[S.N. VARIAVA AND BRIJESH KUMAR, JJ.) B

Central Excise and Salt Act, 1944-Tari.lf Item 3003.30-Himtaj oil-
C/assiflcation of whether 'Ayurvedic medicine' or 'perfumed hair oil '-Held,
in the facts of the case the oil is an 'Ayurvedic medicament'.
c
Respondent, the manufacturer of the 'Himtaj oil' filed classification
list classifying the oil as Ayurvedic medicine under sub Heading 3003.30.
Show cause notice was issued as to why the oil should not be classified as
perfumed hair oil under sub-heading 3305.10. Assistant Collector after
considering certain materials which showed that the oil was an Ayurvedic . D
medicine held that the oil fell under sub-heading 3003.30. Commissioner
(Appeals) allowed the appeal of the Revenue holding that there was no
evidence to prove that the product was being ordinarily prescribed by
medical practitioners or that it was used to deal with a specific disease;
and that there was no evidence to show that the common man used the
product as a medicine. l{espondent's appeal to Customs Excise and Gold E
(Control) Appellate Tribunal was allowed. Hence the present appeal.

Dismissing the appeal, the Court

HELD: In the present case, the report of the Range Officer shows F
that dealers, wholesalers, retailers, customer, chemists and druggist all
consider "Himtaj oil" to be an Ayurvedic medicament. Apart from that
the other material relied upon by the Assistant Collector also clearly shows
that "Himtaj oil" is an Ayurvedic medicament. In this view of the matter
there is no infirmity in the impugned judgment. 11043-H; 1044-AI
G
Shree Bail~Fanath Bhavan lid v. The Collector of Ce/1/ral Excise,
Nagpur, 11996183 ELT 492 (SC), distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1512 of2001.

1041 H
1042

-
SUPREME COURT REPORTS 12003] 3 S.C.R.

A From the Judgnient and Order dated 19.5.2000 of the Customs Excise,
and Gold (Control) Appellate Tribunal, Kolkata in A.No. E/R-428/97 in
F.O.No.A/629-Kol/2000.

Raju Ramachandran, Additional Solicitior General, Sanjiv Sen, Ashok
K. Srivastava, K. Swami and B.K. Prasad for the Appellant.
B
Rana Mukherjee, Siddharth Gautam, Goodwill Indeevar and Mrs. Sumita
Mukherjee for the Respondent. ---
The Judgment of the Court was delivered by

C S.N. VARIA VA J. This appeal is against the Judgment dt. 19th May
2000 passed by Customs, Excise and Gold (Control) Appellate Tribunal,
Calcutta.

Briefly stated the facts are as follows :

D The Respondents are manufacturing a product known as "Himtaj oil".
The Respondents filed a classification list classifying "Himtaj oil" as Ayurvedic
medicine under subheading 3003.30. A show cause notice was issued to them
as to why their oil should not be classified as "perfumed hair oil" under
subheading 3305.10. The Respondents replied to the show cause notice., The
Assistant Collector accepted the Respondents' case that their oil fell under
E subheading 3003.30. For so holding the Assistant Collector inter a/ia relied
on the following material:

(a} Drug licence issued by the Drug Controller.
(b) A letter issued by the Superintendent of Ayurvedic Department,
F Benaras which stated that the product was an Ayurvedic medicine.
(c) A study report of the Institute of Postgraduate Education and
Research in Ayurved, Calcutta on "Himtaj oil" which classified
this oil as an Ayurvedic product which relieved pain in headaches -·
and migraine and also provided relief against dandruff.
G (d) A report prepared by the Range Officer, based on market inquires
conducted by him with dealers, wholesalers retailers, customers
chemists and druggist, which showed that all treated "Himtaj oil"
as an Ayurvedic Medicament.
(e) A re-testing Report of the Chief Chemist, New Delhi which stated
H that no Ayurvedic perfumery could be detected in "Himtaj oil"
,...
l

C.C.E. v. PANDIT D.P. SHARMA lS.N. VARIAVA. J.] I043
(f) SSI Registration Certificate obtained by the Respondents for A
manufacturing Ayurvedic oil under a drug licence.

Against the decision of the Assistant Collector the Revenue filed an
appeal to the Commissioner (Appeals). By his order dated 10th July, 1997
the Commissioner (Appeals) allowed the appeal of the Revenue. The
Commissioner (Appeals) he j that there was no evidence to prove that the B
product was being ordinari:: prescribed by medical practitioners or that it
was used to deal with a specific disease. The Commissioner (Appeals) held
that there was no evidence to show that the common man used the product
as a medicine.

Against the Order dated I0th July 1997 the Respondents filed an Appeal C
to CEGA T. By the impugned order CEGA T has allowed the Appeal. Hence
th is appeal by the Revenue.

At the stage it must be mentioned that in this Civil Appeal the question
of classification relates to "Himtaj oil". On board along with this Appeal D
were a number of other Appeals which related to classification of"Bhanphool
oil". The arguments of learned Additional Solicitior General, Mr. Raju
Ramachandran, in this Appeal were based upon the submissions made in
respect of "Bhan pool oil". It was submitted that if the submissions regarding
"Bhanphool oil" are accepted by this Court then on the same reasoning it
would have to be held that "Himtaj oil" was not an Ayurvedic medicament. E
Reliance was also placed upon the authority of this Court in the case of Shree
Baidyanath Ayurvedic Bhavan Ltd. v. The Collector ofCentral Excise Nagpur,
reported in (1996) 83 ELT 492 (SC). In this case it is held that resort to
scientific and technical not meanings should no be had but that the expression
must be understood in its popular meaning. It was held that ordinarily a F
medicine would be prescribed by medical practitioner and would be used for
a limited time and not every day unless it was so prescribed to deal with a
specific disease like diabetes. On this basis it was held that the product in
question namely "Dant Manjan Lal" (tooth powder) was not a medicine.

We have today, by a separate judgment, negatived the submissions of G
the Revenue in respect of "Bhanphool oil". Thus for reasons set out in that
separate judgment the arguments of the Revenue even in respect of "Himtaj
oil" cannot be accepted. The authority relied upon is also of no assistance.
In that case there was no evidence to show that the common man considered
that product as a medicine. In this case the report of the Range Officer shows
the dealers, wholesalers, retailers, customers, chemists and druggist all consider H
I 044 SUPREME COURT REPORTS
, 12003] 3 S.C.R.

A "Himtaj oil" to be an Aytirvedic medicament. Apart from that the other
material relied upon by the Assistant Collector (which has been set out
hertinabove) also clearly shows that "Himtaj oil" is an Ayurvedic medicament.
In this view of the matter we see no infirmity in the impugned judgment.

Accordingly the Appeal stands dismissed. There will however be no
B order as to costs.

K.K.T. Appeal dismissed.