Holding

Banphool Oil is an Ayurvedic medicament falling under Tariff Item 3003.30 of the Central Excise Tariff Act, 1985.

Summary

The case concerned the classification of "Banphool Oil" under the Central Excise Tariff Act, 1985. The Revenue argued that the product was a perfumed hair oil (Tariff Item 3305.10) or a toilet preparation, while the assessee contended it was an Ayurvedic medicament (Tariff Item 3003.30). The Customs, Excise and Gold (Control) Appellate Tribunal had classified it as an Ayurvedic medicament, a decision the Revenue appealed. The Supreme Court held that the burden of proving a product falls under a particular tariff entry lies on the Revenue, which had failed to show that the oil was commonly understood as a hair oil. The Court noted that the product contained Ayurvedic ingredients, was manufactured under a drug licence, and had been opined by the Drug Controller as an Ayurvedic preparation; the percentage of medicament in the product was not decisive. Consequently, the Court upheld the Tribunal’s classification of Banphool Oil as an Ayurvedic medicament under Tariff Item 3003.30 and dismissed the appeals.

Issues considered

The correct tariff classification of Banphool Oil – Ayurvedic medicament (3003.30) or perfumed hair oil/toilet preparation (3305.10).
Whether the burden of proof for classification rests on the Revenue.
Whether the low percentage of Ayurvedic ingredients precludes classification as a medicament.
The relevance of the product’s mode of sale, labeling, and common usage in determining its nature.
The effect of the Drug Controller’s opinion and the existence of a drug licence on classification.

Legislation cited

Subjects

classificationcentral exciseAyurvedic medicamenttariffburden of proofdrug licencecosmeticstoilet preparation

Judgment

COMMISSIONER OF CENTRAL EXCISE, CALCUTTA A
v.
MIS. SHARMA CHEMICAL WORKS

APRIL 30, 2003

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

Cemral Excise Tariff Act, 1985; Tariff Item Nos. 3305.10 and 3303.30
and Circular daled 5. I 2. I 991:

Classification-Principles-Producl "Banphool Oil'- 'Medicament' or C
'Perfi1med I-lair Oil'-Tribunal held the product as Ayurvedic Medicament-
On appeal, f-leld: Neither the proportion of medicament present in the product
nor the mode of selling of the product nor selling by prescription necessarily
de/ermines its classification-Product could be classified as medicament when
it contains all the ingredients prescribed in the Medicine Text Books or the D
proprietai:v formula patented or by the use of !he product -Burden to prove
is on Revenue-However, Revenue failed to prove !hat the product is popularly
known by its user as 'hair oil':__lt could be used for treatment of certain
ailments-Manufac/l/ring is done under a drug licence-Revenue referring
the ma//er to the Drug Controller and he had opined the product as 'Ayurvedic
Medicament '-Revenue could have referred the matter further to other E
authorities/or opinion but had not done so-f-lence Tribunal rightly classified
the product as 'Ayurvedic Medicament' falling under Tariff Item 3003.30.

Words and Phrases:

'cosmetic', 'medicament', 'drug' and 'toilet preparation'-Meaning of F
In the order impugned, the Customs Excise and Gold (Control)
Appellate Tribunal, per majority, held the product'Banphool Oil'
classifiable as an Ayurvedic medicament under Tariff Item 3003.30 of the
Central Excise Tariff Act. Hence the present appeal and connected appeals.
G
The question which arose for consideration in these appeals against
the order of the CEGAT was whether the product 'Banphool Oil' was
classifiable as an 'Ayurvedic Medicament' or a 'perfumed hair oil'.

It was contended for the Revenue that the assessee himself had
1027 H
1028 SUPREME COURT REPORTS [2003) 3 S.C.R ..

A initially classified the product 'Banphool Oil' as a toilet preparation but
later sought to revise it as 'Medicament'; that the product contained very
less percentage (2%) of Ayurvedic ingredient; that cartons/labels indicated
the product as hair oil; that the product was being sold across the counter
by the grocers as well; and that no evidence was adduced to prove that it
B was commonly used as medicine; and that the product could appropriately
be classified as 'hair oil' under tariff item 3305. IO.

On behalf of the assessee, it was submitted that the medicament under
Chapter 30 of the Central Excise Tariff Act could either be patented/
proprietary medicament or non-patented/non-proprietary medicament;
C that the medicament could be as per formula prescribed in Pharmacopoeias
or some patented formula; that medieament should necessarily contain only
small quantity of medicines/ingredients else it could be harmful; that in
case of any doubts/disputes regardi'ng classification of the product as
medicament, the matter should be referred to the authorities mentioned
in the Board's Circular dated 5th December, 1991; and that merely because
D a product was available across the counter would not conclude that the
product was not a medicament.

Dismissing the appeals, the Court

HELD: I.I. It is settled law that the onus or burden to show that a
E product fall within a particular Tariff item is always on the Revenue. 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. That merely because the percentage of medicament in a
product is less does not ipso facto mean that the product is not a
F medicament. Generally the percentage or dos'llge of the medicament will
be such as can be absorbed by the human body. The medicament would
necessarily be covered by tillers/vehicles in order to make the product
usable. It could not be denied that all the ingredients used in 'Banphool
Oil' are those which are set out in the Ayurveda text Books. Of course the
G formula may not be as per the text books but a medicament can also be
under a patented or proprietary formula. 11039-E-GI

B.B.l. Pharmaceuticals ltd v. Collector of Central Excise, Vadodara.
11995[ Supp. 3 SCC I and Amrutanjan ltd. v. Collector of Central Excise,
11996[ 9 sec 413, relied on.
H
C.C.E. v. SHARMA CHEMICAL WORKS 1029
Collector of Central Excise v. Pharmasia (P) Ltd., (1990) 47 ELT 658 A
(Tribunal), referred to.

1.2. The main criteria for determining classification is normally the
use it is put to by the customers who use it. The burden of proving that
the product 'Banphool Oil' is understood by the customers as hair oil was B
on the Revenue. This burden is not discharged as no such proof is adduced.
On the contrary, the sajd oil can be used for treatment of headache, eye
problem, night blindness, reeling head, weak memory, hysteria, amnesia,
blood pressure, insomnia etc. The dosages required are also set out on the
label. The product is registered with Drug Controller and is being
manufactured under a drug licence. 11039-G, H; 1040-A)' C

Commissioner of Sales Tax, Madhya Pradesh, Indore v. Shri Sadhna
Aushadhalaya, Sales Ta-c Cases, (1963) Vol. 14 page 813; Alpine Industries,
v. Collector of Central Excise, New Delhi, 1200313 SCC 111 and Hindustan
Ferodo Ltd. v. Collector of Central Excise, Bombay, (1997) 89 ELT 16, D
referred to.

Shree Baidyanath Ayurved Bhavan Ltd. v. Collector of Central Excise,
Nagpur, (1996) 83 ELT 492, relied on.

1.3. The Revenue is bound by the Circulars issued by the Bo.ard which E
stipulates that in case of doubt the matter should be referred to the1>rug
Controller. The matter was referred to the Drug Controller who had opined
that it was an Ayurvedic medicament. If the department was still
entertaining any doubts, they could have referred the matter to the Adviser,
Ayurveda/Sub-Commissioner in the Office of Drug Controller, Director
General of Health Services, New Delhi. This was not done. Thus the F
Tribunal has rightly held that the Banphool Oil is classifiable as an
Ayurvedic medicament under Tariff Item 3003.30. 11040-B, q

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7610of1999.
G
From the Judgment and Order dated 24.6.99 of the Central Excise
Customs and Gold (Control) Appellate Tribunal, K<ilkata in A.No. E/R-184/
97 in F.0.No.A-598/Kol/1999.
WITH

C.A.Nos. 283-284, 2640/2001 and 707-709 of 2003. H
...
).

1030 SUPREME COURT REPORTS [2003] 3 S.C.R.
A Raju Ramachandran, Additional Solicitor General, Sanjiv Sen, Ashok
K. Srivastava, K. Swami and B.K. Prasad for the Appellant.

V. Lakshmikumaran, A.R. Madhav Rao, Devnath, V. Balachandran,
Rajesh Kumar for the Respondents.

B The Judgment of the Court was delivered by

VARIA VA, J, In all these Appeals facts are common and the question
of law is common. Therefore, all are being disposed of by this common

-
judgment. In all these Appeals the question is whether "Banphool Oil" is
C classifiable as a "perfumed hair oil" or as an "Ayurved_ic Medicament". It
must be mentioned that prior to 28th January, 1986, the question was whether
"Banphool Oil" could be classified under Tariff Item 68 i.e. "Ayurvedic
Medicament" or under Tariff Item 14F(ii) i.e. "Perfumed Hair Oil". After this
date, the question is whether it falls under Tariff Item 3305.10 i.e. "perfumed
hair oil" or 3003.30 i.e. "Ayurvedic Medicament". Civil Appeal No. 7610 of
D 1999 is against the judgment dated 24th June, 1999 passed by the Customs,
Excise and Gold (Control) Appellate Tribunal (CEGA T). In this case ihe
Judicial Member took the view that Banphool Oil was classifiable as an
Ayurvedic medicament whereas the Technical Member took the view that it
was classifiable as a perfumed hair oil. In view of this difference, the matter
E was referred to a third Member who has agreed with the Judicial Member
and held that Banphool Oil is classifiable as an Ayurvedic Medicament. Thus
by majority, CEGAT has held that Banphool Oil is classifiable as an Ayurvedic
Medicament under Tariff Item 3003.30.

Civil Appeals Nos. 283-284 of2001 are against judgment ofCEGAT
F dated 3rd April, 2000. Civil Appeal No. 2640 of2001 is against the judgment
of CEGAT dated 27th July, 2000 and Civil Appeals Nos. 707-709/2003 are
against the judgment of CEGAT dated 26th February, 2003. In all these
matters CEGAT has followed the majority judgment dated 24th June, 1999
and held that Banphool Oil is classifiable as an Ayurvedic Medicament.

G Learned Additional Solicitor General, Mr. Raju Ramachandran pointed
out that the Respondent in Civil Appeal No. 7610 of 1999 had initially
classified Banphool Oil as a toilet preparation. He points out that this initial
classification was sought to be revised as an Ayurvedic Medicament. He
submitted that this showed that even the Respondent considered their product
H to be a toilet preparation. He submitted that it is an admitted position that
C.C.E. v. SHARMA CHEMICAL WORKS [VARJAVA. J.] I 031
98% of Banphool Oil consists of"til oil" and the remaining 2% are ayurvedic A
ingredients like amla, i:handan, camphor etc. He submitted that in order to
suppress the strong smell of til oil, perfumery is added: He further submitted
that the cartons and labels of Banphool oil show that it is a perfumed hair
oil. He submitted that it is an admitted position that Bhanpool Oil is sold
across the counter and stored not just by chemists but even by ordinary B
grocers. He submitted that there is no evidence led in any of the matters to
show that the common man uses this oil as a medicine.

Reliance is placed upon the case of Shree Baidyanath Ayun,ed Bhavan
Ltd. v. Collector of Central Excise, Nagpur reported in 1996 (83) ELT 492
(SC), Where the question was whether "Dant Manjan Lal" was an Ayurvedic C
Medicament or not. This Court approved the findings of the Tribunal that in
interpreting statute like the Excise Act, the primary object of which is to raise
revenu·e for which purpose various products are differently classified, resort
shm1ld not be had to the scientific and technical meanings but to their popular
meaning. It was held that Courts have to see what the persons who use the
product understand that product to be. It was held that generally medicines D
are prescribed by medica.1 practitioners and used for a limited time and not
every day. It was held that as the product was not sold under a medical
prescription it was not an Ayurvedic Medicament.

Reliance was also placed in the case of Alpine Industries v. Collector E
of Central Excise, New Delhi reported in (2003] 3 SCC 111. In this case the
question was whether "Lip Salve" could be classifiable as a preparation for
care of skin or as a medicament. Admittedly the product was mainly supplied
to the Defence Department for use by military personnel who are posted in
high altitude areas. The Court approved the principle laid down in Shri
F
- Baidyanath Ayurved Bhawan 's case supra that in interpreting provisions of
statute like the Excise Act the popular meaning as understood by the users
should be applied and not the scientific or technical meaning. It was held that
in deciding under which Entry a product would fall, help could be taken from
the Chapter Notes.

Reliance was also placed upon the decision of the Sales Tax Tribunal
G
in the case of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Shri
Sadhna Aushadhalaya reported in Sales Tax Cases 1963 Vol. 14 page 813.
In this case the question was whether Maha Bhringraj hair oil was a toilet
article or a medicinal preparation. The Tribunal held as follows:
H
1032 SUPREME COURT REPORTS 12003] 3 S.C.R.

A "It is a comnion ground that if the hair-oil manufactured and sold by
the assessee does not fall under the above entry, then it is not covered
by any other entry in Schedule I or II. The question, therefore, that
arises for determination is whether Maha Bhringraj Hair-oil is an
article falling under entry No. II. The assessee's argument which
prevailed with the Board of Revenue, is that the hair-oil manufactured
B by them is not a "toilet article" but a "medicinal preparation" inasmuch
as the oil is prepared and manufactured according to a certain formula
given in Ayurvedic medicinal book, that it has a bad odour, and that
it is a specific for headache, burning of eyes, and for preventing
falling hair. In our opinion, there can be little doubt that the oil in
c question is a "toilet article" as well a "cosmetic". The question whether
an oil, which is to be applied to the hair, is or is not a "cosmetic" or
a "toilet article" does not depend on its fragrance or on the formula
.according to which it is manufactured. A hair-oil is clearly not a pure
and simple perfume, and the question whether it has a sweet fragrance
or a disagreeable odour is in no way determinative of its character as
D a hair-oil. Every hair-oil whether it is manufactured scientifically
with ingredients containing some medicinal properties or crudely, is
intended and for beautifying ultimately the hair and the appearance
of the person using it. A hair oil may cool the brain or improve the
system and induce sound sleep, but none the less it does not because
E of these qualities become a medicial preparation. Now the word
"cosmetic" has been defined in Webster's International Dictionary as
meaning "any external application intended to beautify and improve
the complexion, skin or hair." Other dictionaries also give the same
meaning. The meaning of the word "toliet", as given in Webster's
International Dictionary, is ''act or process of dressing, especially,
F formerly of dressing hair, now usually cleansing and grooming of
one's person". A "toilet preparation" is any preparation which is
intended to affect, and conceivably to improve the bodily appearance.
The words "cosmetics" and "toilet", being words of everyday use,
-
must b<: construed not in any technical or scientific sense, but as
G understood in common parlance and in commercial language. A hair-
oil intended to be applied to the hair and supposed to act as a hair-
tonic and to prevent dandruff, failing hair and baldness and to cool
the brain does not cease to be a hair-oil merely because it is
manufactured and sold by a person dealing in medicines and according
to a process more complex than used in the manufacture of ordinary
H hair-oil. The object of all hair-oils is to tidy the hair, to promote
C.C.E. v. SHARMA CHEMICAL WORKS IV ARIA YA. J.) 1033

luxuriant growth of hair-and to prevent dandruff and falling hair and A
it cannot be denied that if a hair-oil produces the effects proclaimed
and claimed in regard to it, then the appearance' of the person using
it is undoubtedly improved. We have no doubt that the hair-oil
manufactured by the assessee is a "toliet article" and falls also within
the meaning of the term "cosmetics."
B
Based on the above decisions, the learned Additional Solicitior General, Mr.
Raju Ramachandran submitted that the product Banphool Oil is clearly
classifiable as a perfumed hair oil under Tariff Item 3305.10 and not as an
Ayurvedic medicament under Tariff Item No. 3003.30. He also referred to
Chapter Note l(d) to chapter 30 which provides that preparation under Chapter C
33 even if they have therapeutic or prophylactic properties would not fall
under pharmaceutical products but would remain as toilet preparations.

On the other hand Mr. Lakshmikumaran submitted that Chapter 30
dealt with all types of medicines. In support of this submission he pointed out
various Tariff Entries under this Chapter. He submitted that medicaments D
could be patented or proprietary medicaments or even medicaments which
are not patented or proprietary. He submitted that medicaments could be as
per the formula set out in various pharmacopoeias or they could be under
some patented formula of a particular party. He submitted that the ingredients
having medicinal properties would necessarily be of a very small percentage E
in the medical preparation. He submitted that if the percentage was large it
could be harmful to the human body. He submitted that as a general rule the
medical ingredients would necessarily have to be mixed with fillers/vehicles
in order to make that medicament palatable and/or usable. By way of an
example, he submitted that Vicks Vaporub contained 98% Parafin Wax
F

- whereas the medicament i.e. menthol is only 2%. He submitted that merely
because the filler/vehicle was of a large percentage did not ipso facto mean
that the product was not a medicament. He submitted that, in any event,
every single ingredient in Banphool Oil was contained in various
pharmacopoeias and text books which deals with Ayurvedic medicines. He
pointed out that in Bhavaprakash '.ii oil is mentioned as an Ayurvedic G
ingredient.

Mr. Lakshmikumaran also referred to Board Circular dated 5th
December, 1991 wherein it has hen directed that if there is any doubt or
dispute regarding classification of a product whether it is an Ayurvedic H
medicament the matter should be referred to the State Drug Licencing
1034 SUPREl'vlE COURT REPORTS 12003 I 3 S.C.R.

A Authority concerned with"Ayurveda and that ifa further reference is necessary
then it should be sent to the Advisor, Ayurveda/Sub Commissioner in the
Office of the Drug Controller India, Director General of Health Services,
New Delhi. Mr. Lakshmikumaran pointed out that in fact a reference had
been made to the Drug Controller. He pointed out that the Drug Controller
B by a letter dated 13th May, 1985 had opined as follows:

"Banphool oil is an Ayurvedic preparation. Therefore I think that
there is sufficient force in the argument of the party to claim its
classification under erstwhile T.I. 68 as Ayurvedic preparation."

C Mr. Lakshm ikumaran further pointed out that for manufacture of
Banphool Oil the respondent had a drug licence issued to them and that the
product was being manufactured under such licence. He submitted that the
burden of proving that the product was not an Ayurvedic medicament and/
or that the common man did not understand this product as a medicament
was on the revenue. In support of his submission he relied upon the case of
D Hindus/an Ferodo Lid. v. Colleclor of Central Excise Bombay reported in
1997 (89) EL T 16 (SC) wherein this Court has held that the onus of
establishing that a product falls within a particular item is on the revenue. It
has been held that if the revenue leads no evidence, then the onus is not
discharged. He submitted that the Department had not made any enquiry in
E order to produce any evidence to show that in common parlance this product
was not a medicament. He submitted that the label of the product lays down
the dosage to be used for purposes of curing an ailment. He submitted that
Chapter Note I(d) could be of no assistance to the revenue as they would
first have to show that the good was classifiable under Chapter 33. He relied
F upon Chapter Note 2 and 6 of Chapter 33 which read as follows:

"2. Heading Nos. 33.03 to 33.07 apply, inler a/ia, the products, whether
or not mixed (other than aqueous distillates and aqueous solutions of
essential oils), suitable for use as goods of these headings and put up
in packings with !ables, literature or other indications that they are for
G use as cosmetics or toilet preparations or put up in a form clearly
specialized to such use and includes products whether or not they
contain subsidiary pharmaceutical or antiseptic constituents, or are
held out as having subsidiary curative or prophylactic value.

Heading No. 33.05 applies, inter a/ia, to the following products
H brilantines perfumed hair oils, hair lotions, pomades and creams, hair
C.C.E. v. SHARMA CHEMICAL WORKS [VARIAVA. J.] I 035
dyes (in whatever form) shampoos, whether or not containing soap or A
organic surface active agents."

He submitted that admittedly Banphool Oil would not fall into any of
the categories set out therein. He further submitted that Tariff Item 33.05 was
in respect of preparations for use on the hair. He submitted that Banphool Oil
was not for use on the hair as it was a preparation for use on the head. B

Mr. Lakshmikumaran relied upon the case of 8.8.l. Pharmaceuticals
Ltd. v. Collector of Central Excise Vadodara reported in [1995] Supp 3 SCC
I. In this case the question was whether the product "Selsun" was a
medicament or a toilet preparation. This Court held as follows:
c
"24. Elaborating the above submissions, the learned counsel for the
respondents invited our attention to chapter notes of_ Chapter 30 and
Chapter 33 and also the rules of interpretation. According to the
learned counsel a careful reading of chapter notes of Chapter 30
would show that preparations of Chapter 33 even if they have D
therapeutic or prophylactic properties would not fall under Chapter
30. However, he fairly admitted that 'medicaments' are those that
have therapeutic or prophylactic uses nevertheless those medicaments,
if they are classifiable under Chapter 33 or Chapter 34 will not fall
under Chapter 30, according to him, if they are more specifically E
preparation falling under Chapter 33 or Chapter 34. In other w.irds,
he wanted to equate the product in question to 'shampoo' enumerated
under Heading No. 33.05. He also invited our attention to the fact
that the appellants before the coming into force of the new Tariff Act
described the product as shampoo and they have omitted the word
'shampoo deliberately only to claim that the product would fall under F
Chapter 30.

25. We do not think we can accept all the contentions of the learned
counsel for the respondents except certain obvious admitted positions.
The submission that the product in question must be equated to
shampoo falling under Chapter 33 is not at all correct. G
26. It is true that the learned counsel for the appellants have placed
reliance on the definition of the words "cosmetic and drug" as defined
in the Drugs and Cosmetics Act, 1940. On a perusal of the definitions,
we can broadly distinguish cosmetic and drug as follows: H
1036 SUPREME COURT REPORTS [2003) 3 S.C.R.

A "A 'cosnietic" means any article intended to be rubbed, poured,
sprinkled or sprayed on, or introduced into, or otherwise applied to
the human body or any part thereof for cleansing, beautifying,
promoting attractiveness, or altering the appearance and includes any
article intended for use as a component of cosmetic."

B and

"A 'drug' includes all medicines for internal or external use of human
beings or animals and all substances intended to be used for or in the
diagnosis, treatment mitigation or prevention of any disease or disorder
in human beings or including preparation applied on human body for
c the purpose of repelling insects."

27. We cannot ignore the above broad classification while considering
the character of the product in question. Certainly the product in
question is not intended for cleansing beautifying promoting
D attractiveness or altering appearances. On the other hand it is intended
to cure certain disease as mentioned supra.

28. The fact that the appellants have previously described the product
as "Selsun Shampoo" will not conclude the controversy when the
true nature of the product falls for determination. Jn fact,
E notwithstanding the fact that the appellants have described the product
as Selsun Shampoo, the Central Board of Excise and Customs, as
noticed earlier, has classified the same as patent and proprietary
medicine. The respondent have accepted the same. Therefore, there
is no force in the submission of the learned counsel for the respondents

..
that the product must be equated with shampoo.
F
29. The contention based on chapter notes is also not correct. Once
of the reasons given by the authorities below for holding that Selsun
would fall under Chapter 33 was that having regard to the composition,
the product will come within the purview of Note 2 to Chapter 33 of
G the Schedule to Central Excise Tariff Act, 1985 is without substance.
According to the authorities the product contains only subsidiary
pharmaceutical value and, therefore, notwithstanding the product
having a medicinal value will fall under Chapter 33. We have already
set out Note 2 to Chapter 33. In order to attract Note 2 to Chapter 33
th1: product must first be a cosmetic, th~t the product should be suitable
H
C.C.E. v. SHARMA CHEMICAL WORKS [VARIAVA,J.) 1037
for use as goods under Heading Nos. 33.03 to 33.08 and they must A
be put in packing as !ables, literature and other indications showing
that they are for use as cosmetic or toilet preparations. Contrary to
the above in the present case none of the requirements are fulfilled.
Therefore, Notes 2 to Chapter 33 is not attrncted. Again it is without
substance the reason give by the authorities that the product contains B
2.5% w/v of Selenium Sulfide which is only of a subsidiary curative
or prophylatic value. The position is that therapeutic quantity permitted
as per technical reference including US Pharmacopoeia is 2.5%.
Anything in excess is likely to harm or result in adverse effect. Once
the therapeutic quantity of the ingredient used, is accepted, thereafter
it is not possible to hold that the constituent is subsidiary. The C
important factor is that this constituent (Selenium Sulfide) is the main
ingredient and is the only active ingredient.

30. As rightly contended by the learned Senior Counsel for the
appellants that merely because there is some difference in the tariff D
entries, the product will not change its character. Something more is
required for changing the classification especially when the product
remains the same. We have noticed that the Excise authorities have
accepted the decision of the Central Bo«rd of Excise and Customs
treating the product in question as patent and proprietary medicine by
not challenging the same or by allowing the same to become final. E
We have also seen that the Central Board of Excise and Customs has
given numerous points in suppo11 of its conclusion for holding the
product in question as patent and proprietary medicine. Principle
among them at the risk of repetition can be recalled. They are as
follows.
F
"(a) It was used for the treatment of a disease known as Seborthoeic
Dermatitis commonly known as dandruff:

(b) It was manufactured under a Drug licence.

(c) The Food and Drugs Administrative had certified it as a drug.
G

(d) That the Drug Controller had categorically opined that Selenium
Sulfide present in Selsun was in a therapeutic concentration.

(f) It was included as a drug in the National Formulary, US H
1038 SUPREME COURT REPORTS [2003) 3 S.C.R.

A Pharmacopoiea and the Merck Index.

(g) I.I fulfilled the requirements of a drug as understood in common
parlance.

(h) Selenium Sulfide was sold only on medical prescription and used
B as a medicine.

(i) Selsun was not a medicated shampoo, which was recommended as
conditioners with subsidiary medicinal effect. Selsun was on the
contrary being recommended by physicians.

c U) Various standard books and treatises such as (i) The
Pharmacological Basis of Therapeuticus by Goodman and Gilman
(ii) Harry's Cosmeticology referred to Selsun as a drug.

(k) It was being marketed as a patent or proprietary medicine through
registered phamacists who hold valid drug licence, and not by any
D
dealer, like other shampoos.

(I) Abbott's literature referred to it as a drug and such literature was
addressed to physicians, also the label on the container mentioned
that the product was to be used as directed by physicians.
E
(m) Affidavits of leading doctors established that Selsun was being
manufactured for use as a drug.

(n) That the Excise Department had made inquires from the trade and
found that other shampoos like Clinic, Tara, Halo etc. were much
F cheaper and that their advertisement campaigns were to leave the hair
silky, soft and healthy' whereas Selsun was not so advertised. On the
contrary there are precautions in use mentioned."

31. The above conclusions of the Central Board of Excise and Customs
were reached on the basis of materials produced before it. The same
G materials are also placed before us and we have gone through them.
We find no good reason to differ from the above conclusion of the
Central Board of Excise and Customs especially in the absence of
any other materials produced by the respondents to persuade us to
take a different view. Certain contrary findings of the authorities
H below such as that 'Selsun' is only a medicated shampoo without any
C.C.E. v. SHARMA CHEMICAL WORKS [VAR!AVA, J.] 1039
accepted supporting niaterials cannot be sustained." A
Mr. Lakshmikumaran submitted that all the above criteria are fulfilled
in respect of Banphool Oil also. He submitted that merely because a product
was available across the counter did not mean that it is not a medicament. He
pointed out that various products like Vicks, Strepsils, Mediker are available
across the counters and even available in grocers shops. He submitted that a B
medicament may be prescribed by a Doctor but could also be available without
a Doctor's prescription. He submitted that dosage would be indicated on the
label only in respect of medicaments. In support of his submission, he relied
upon the case of Collector of Central Excise v. Pharmasia (P.) Ltd. reported
in 1990 (47) ELT 658 (Tribunal), wherein it has been held that mediker is C
classifiable under Tariff Item 33.03 as an Ayurvedic medicament. He also
relies upon the case of Amrutanjan ltd. v. Collector ofCentral Excise reported
in [1996] 9 SCC 413, wherein the question was whether Amrutanjan Pain
Balm was an Ayurvedic medicament. It was held that merely because the
ingredients were known not only to Ayurveda but to the western science,
would not make the balm non-Ayurvedic. D

We have heard the parties and considered the submissions made by
them. We have also read the opinion of the majority Bench and the minority
opinion of the Technical Member. It is a settled law that the onus or burden
to show that a product fall within a particular Tariff Item is always on the E
revenue. Mere fact that a product is sold across the counters and not under
a Doctors prescription does not by itself lead to the conclusion that it is not
a medicament. We are also in agreement with the submission of Mr.
Lakshmikumaran that merely because the percentage of medicament in a
product is less does not ipso facto mean that the product is not a medicament.
Generally the percentage or dosage of the medicament will be such as can be F
absorbed by the human body. The medicament would necessarily be covered
by fillers/vehicles in order to make the product usable. It could not be denied
that all the ingredients used in Banphool Oil are those which are set out in
the Ayurveda text Books. Of course the formula may not be as per the text
books but a medicament can also be under a patented or proprietary formula. G
The main criteria for determining classification is normally the use it is put
to by the customers who use it. The burden of proving that Banphool Oil is
understood by the customers as an hair oil was on the revenue. This burden
is not discharged as no such proof is adduced. On the contrary we find that
the oil can be used for treatment of headache, eye problem, night blindness
reeling head weak memory, hysteria amnesia blood pressure, insomnia etc. H
1040 SUPREME COURT REPORTS [2003J 3 S.C.R.

A The dosages required are also set out on the label. The product is registered
with Drug Controller and is being manufactured under a drug licence.

Another aspect to be kept in mind is that the revenue is bound by the
circulars issue by the Board. The Board circular dated 5th December, 1991
clearly stipulates that in case of doubt the matter should be referred to the "
B Drug Controller. The matter was referred to the Drug controller who, as
stated above, has opined that it is an Ayurvedic medicament. If the department
was still entertaining any doubts they could have referred the matter to the
Adviser, Ayurveda/Sub-Commissioner in the Office of Drug Controller,
Director General of Health Services New Delhi. This was not done.
c For the above reasons, we are in agreement with the majority opinion
of the Tribunal that the Banphool Oil is classifiable as an Ayurvedic
medicament under Tariff Item 3003.30. In this view of the matter, we see no
infirmity in the impugned judgments. The Appeals accordingly stand
dismissed. There shall be no order as to costs.
D
S.K.S. Appeals dismissed.