Supreme Court of India
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IVversusM/S. CIENS LABORATORIES, MUMBAI
- Citation
- 2013 INSC 537
- Decided
- 14 August 2013
- Disposal
- Dismissed
- Bench
- S MUKHOPADHAYA
Holding
A product whose primary function is therapeutic cure and contains pharmaceutical ingredients, even in small quantities, is a medicament and must be classified under Heading 30.03 of the Central Excise Tariff Act, 1985.
Summary
The case concerned the classification of the skin cream ‘Moisturex’ for excise duty purposes. The Central Excise Commissioner argued that the product was a cosmetic under Heading 33.04, attracting 70% duty, while the assessee contended it was a medicament under Heading 30.03, attracting only 15% duty. The Supreme Court examined the product’s composition, which contains pharmaceutical ingredients such as urea, lactic acid and propylene glycol, and its therapeutic use as prescribed by dermatologists for conditions like ichthyosis and fissure feet. The Court held that the presence of curative pharmaceutical constituents, irrespective of their proportion, makes the product a medicament whose primary function is cure, not mere care. Consequently, the appeals were dismissed and the product was classified under Heading 30.03 with the lower duty rate.
Issues considered
- The correct tariff classification of ‘Moisturex’ cream under the Central Excise Tariff Act, 1985 – whether it falls under Heading 30.03 (medicaments) or Heading 33.04 (cosmetics).
- The relevance of the presence and proportion of pharmaceutical ingredients in determining medicament versus cosmetic status.
- The effect of over‑the‑counter sale and lack of prescription on the product’s classification.
Legislation cited
- Central Excise Tariff Act, 1985s. Heading 30.03, s. Heading 30.04, s. Heading 33.04
Subjects
medicamentcosmetic classificationCentral Excise Tariff Actcare vs cureexcise dutypharmaceutical ingredientsproduct classificationover‑the‑counterHeading 30.03Heading 33.04
Judgment
[2013] 14 S.C.R. 38
A COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV
v.
M/S. CIENS LABORATORIES, MUMBAI
(Civil Appeal No.6988 of 2003 etc.)
AUGUST 14, 2013
B
[SUDHANSU JYOTI MUKHOPADHAYA AND
KURIAN JOSEPH, JJ.]
Central Excise Tariff Act, 1985 - Tariff Headings 30. 03
c and 33.04(8) - Classification - Product, whether medicament
or cosmetic product - Held: If the primary function of a
product is 'care' it is a 'cosmetic product' and if primary
function is 'cure' it is a 'medicament' - If a product comprises
of two or more constituents, compounded together for
D therapeutic or prophylactic use, it is to be termed as
'medicament' covered by Heading 30. 03 of the Act - The
product in question is used not for the care of the skin, but
for treating or curing the skin conditions - The presence of
pharmaceutical substances in the product in question, makes
E it medicament covered under Heading 30.03 of the Act - It
is the presence and not the proportion of the pharmaceutical
substances that is relevant.
The question for consideration, in the present
F appeals was whether the product in question 'Moisturex'
c:ream is a 'medicament' under Heading 30.03 of Central
Excise Tariff Act, 1985 attracting 15% duty (as claimed by
the respondent-assessee) or is a 'cosmetic product'
attracting 70% duty under heading 33.04 of the Act.
F
Dismissing the appeals, the Court
_ HELD: 1. The Customs, Excise and Gold (Control)
Appellate Tribunals, having regard to the pharmaceutical
H 38
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 39
CIENS LABORATORIES, MUMBAI
constituents present in the product in question (cream A
'Moisturex') and its use for the cure of certain skin
diseases, have rightly held that the same is a
medicament liable to be classified under the Heading
30.03 (medicament) of Central Excise Tariff Act, 1985.
[Para 21] [57-B-C] B
2. When a product contains pharmaceutical
ingredients that have therapeutic or prophylactic or
curative properties, the proportion of such ingredients is
not invariably decisive. What is of importance is the c
curative attributes of such ingredients that render the
product a medicament and not a cosmetic. Though a
product is sold without a prescription of a medical
practitioner, it does not lead to the immediate conclusion
that all products that are sold over I across the counter D
are cosmetics. There are several products that are sold
over-the-counter and are yet, medicaments. Prior to
adjudicating upon whether ti product is a medicament or
not, Courts have to see what the people who actually use
the product understand the product to be. If a product's E
primary function is "care" and not "cure", it is not a
medicament. Cosmetic products are used in enhancing
or improving a person's appearance or beauty, whereas
medicinal products are used to treat or cure some
medical condition. A product that is used mainly in curing F
or treating ailments or diseases and contains curative
ingredients even in small quantities, is to be branded as
a medicament. [Para 19] [56-B-E]
3. In the case of 'Moisturex', there is no dispute that G
the said cream is prescribed by the dermatologist for
treating the dry skin conditions and that the same is also
available in chemist or pharmaceutical shops in the
market. The cream is not primarily intended for protection
H
40 SUPREME COURT REPORTS [2013] 14 S.C.R.
A of skin. The ingredients in the cream, the pharmaceutical
substances do show that it is used for prophylactic and
therapeutic purposes. The Central Excise Tariff Act has
unambiguously clarified as to what is a medicament for
curing an ailment relating to skin. Heading 33.04 dealing
B with beauty or make-up preparations and preparations
for the care of the skin has specifically excluded
medicaments. There is also an indication under the same
entry that medicinal preparations used to treat certain
complaints are to be provided under the Heading 30.03
C (medicaments) or 30.04 (products containing
pharmaceutical substances used for medical, surgical,
dental or veterinary purpose). [Para 20] (56-F-H; 57-A]
4. It is not correct to say that 'Moisturex' is a
D moisturizing cream used for softening the skin. The use
of the cream is not for the care of the skin. 'Moisturex' is
also not primarily intended to protect the skin from sun,
tan or dryness, etc. On the other hand, it is intended for
treating or curing the dry skin conditions of the human
E skin and for a few other skin complaints like fissure feet,
dry scaly skin conditions, ichthyosis, etc. The plea of the
Central Excise that use of urea or lactic acid or propylene
glycol, etc., is only as subsidiary pharmaceutical
constituents and, hence, they cannot be held out as
F having curative, therapeutic or prophylactic value, cannot
also be appreciated. It is the presence of the ingredients
of the pharmaceutical constituents which makes the
difference and not the percentage of the ingredients.
(Para 13] (50-G-H; 51-A-C]
G
5. In the Chapter Note dealing with cosmetics, it is
clearly provided that the preparations for the care of skin,
beauty or make-up preparations are the ones covered by
the Heading 33.04 for the care of the skin. The Note has
H
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 41
CIENS LABORATORIES, MUMBAI
specifically excluded medicaments. Still further, in the A
Chapter Note under Heading 33.04(8) also, it is clarified
that medicinal preparations used to treat certain skin
complaints are to be covered under the Heading 30.03
(medicaments) or Heading 30.04 (products containing
pharmaceutical substances used for medical, surgical, B
dental or veterinary purposes). Thus, if a product
comprises of two or more constituents which have been
mixed or compounded together for therapeutic or
prophylactic use, the same is to be covered by Heading
30.03. Urea, lactic acid, propylene glycol are C
pharmaceutical constituents as per as Indian
Pharmacopoeia. [Paras 11 and 12] [50-D-G]
Meghdoot Gramodyog Sewa Sansthan vs.
Commissioner of Central Excise, Lucknow (2004) 174 E.L.T. o
14 (S.C.) Commissioner of Central Excise, Calcutta vs.
Sharma Chemical Works 2003 (154) E.L.T. 328 (S.C.) Puma
Ayurvedic Herbal (P) Ltd. vs. Commissioner of Central
Excise, Nagpur 2006 (196) E.L.T. 3 (S.C.); Alpine Industries
vs. Collector of Central Excise, New Delhi 2003 (152) E.L.T. E
16 (S.C.); Sunny Industries Private Limited vs. Collector of
Central Excise, Calcutta 2003 (153) E.L.T. 259 (S.C.)- relied
on.
Time Pharma vs. Commissioner of Central Excise,
F
Mumbai-111998 (99) E.L.T. 643 (Tri. Mumbai); Union of India
vs. G. D. Pharmaceutical Limited 1998 (100) E.L.T. 24 (Cal.)
- referred to.
Case Law Reference:
G
1998 (99) E.L.T. 643 (Tri. Mumbai) referred to Para 10
(2004) 174 E.L.T. 14 (S.C.) relied on Para 13
2003 (154) E.L.T. 328 (S.C.) relied on Para 14
H
42 SUPREME COURT REPORTS [2013] 14 S.C.R.
A 2006 (196) E.L.T. 3 (S.C.) relied on Para 15
1998 (100) E.L.T. 24 (Cal.) referred to Para 16
2003 (152) E.L.T. 16 (S.C.) relied on Para 17
B 2003 (153) E.L.T. 259 (S.C.) relied on Para 18
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6988 of 2003.
From the Judgment and dated 18.11.2002 of the CEGAT
C Mumbai, in Final Order No. C-111/174/WZB/2002 in Appeal No.
E/1517/R/97-Mum.
WITH
C.A.No. 4434 of 2004.
D
Rupesh Kumar, Ravindera Kr. Verma (for ·s:· Krishna
Prasad), for the Appell~nt.
M. H. Patil, Sandeep Narain,Shri Narain (from S. Narain
E & Co.), Alok Yadav, Amar Pratap Singh. (for Rajesh Kumar),
for the Respondent.
The Judgment of Court was delivered by
KURIAN, J. 1. 'Care or cure', is the clue for the resolution
F of the /is arising in these cases. If the product by name
'Moisturex' is held to be a medicament for cure, the decision
goes in favour of the assessee and if the product is held to
be one for care of the skin, the decision benefits the Central
Excise. The Tribunal has held in favour of the assessee and,
G thus, the Central Excise is in appeals.
2. The Central Excise Tariff Act, 1985 (hereinafter referred
to as 'CETA') under Chapter 30 of the Schedule (2) deals with
pharmaceutical products for the purposes of tariff. At the
H relevant time, if a product is held to be medicament, then, the
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 43
CIENS LABORATORIES, MUMBAI [KURIAN, .J.]
rate of duty was 15% and, if not, 70%. Heading 30.03 deals A
with the medicaments including veterinary medicaments. The
same reads as follows:
"Heading Sub- Description of goods Rate of
No. heading - duty B
No.
(1) (2) (3) (4)
30.03 Medicaments (including
veterinary medicaments) c
3003.10 -Patent or proprietary 15%
medicaments, other
than those medicaments
which are exclusively
Ayurvedic, Unani, D
Siddha, Homoeopathic
or Bio-chemic."
3. 'Medicaments' is defined under Note 2(i) under Chapter
30 which reads as follows: E
"2. For the purposes of heading No. 30.03:
(i) 'Medicaments' means goods (other than foods or
beverages such as dietetic, diabetic or fortified
foods, fonic beverages) not falling within heading F
No.30.02 or 30.04 which are either:-
(a) products comprising two or more
constituents which have been mixed or
compounded together for therapeutic or
prophylactic uses: or G
(b) unmixed products suitable for such uses put
up in measured doses or in packings for
retail sale or for use in hospitals."
(Emphasis supplied) H
44 SUPREME COURT REPORTS [2013) 14 S.C.R.
A 4. 'Patent or proprietary medicaments' is defined under
Note 2(ii) which reads as under:
"2(ii) 'Patent or proprietary medicaments' means any drug
or medicinal preparation, in whatever rorm, for use in the
B internal or external treatment of, or for the prevention of
ailments in human beings or animals, which bears either
on itself or on its container or both, a name which is not
specified in a monograph, in a Pharmacopoeia, Formulary
or other publications, namely:-
c (a) The Indian Pharmacopoeia;
(b) The International Pharmacopoeia;
(c) The National Formulary of India;
D
(d) The British Pharmacopoeia;
(e) The Br!tish Pharmaceutical Codex;
(f) The British Veterinary Codex;
E
{g) The United States Pharmacopoeia;
(h) The National Formulary of the U.S.A.;
(i) The Dental Formulary of the U.S.A.; and
F
0) The State Pharmacopoeia of the U.S.S.R.;
or which is a brand name, that is, a name or a registered
trade mark under the Trade and Merchandise Marks Act,
1958 (43 of 1958), or any other mark such as a symbol,
G
monogram, label, signature or invented words or any
writing which is used in relation to that medicine for the
purpose of indicating or so as to indicate a connection in
the course of trade between the medicine and some
person, having the right either as proprietor or otherwise
H
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 45
CIENS LABORATORIES, MUMBAI [KURIAN, J.]
to use the name or mark with or without any indication of A
the identity of that person."
5. The Chapter Note has explained Heading No.30.03 as
under:
B
"This heading covers medicinal preparations for use
in the internal or external treatment or prevention of human
or animal ailments. These preparations are obtained by
mixing together two or more substances. However, of put
up in measures doses or in forms or packings for retail C
sale, they fall in heading 30.04.
The heading includes
(1) Mixed medicinal preparations such as those listed
in an official pharmacopoeia, proprietary D
medicines, etc., including those in the form of
gargles, eye drops, ointments, liniments, injections,
counter-irritant and other preparations not falling in
heading 30.02, 30.05 or 30.06."
E
Entry 33.04 dealing with cosmetics reads as follows:
"Heading Sub- Description of goods Rate of
No. heading duty
No
(1) (2) (3) (4).
F
33.04 3304.00 Beauty or make-up 70%
preparations and
preparations for the
care of the skin G
(other than medicam-
-ents), including
sunscreen and suntan
preparations; manicure
or pedicure preparations."
H
46 SUPREME COURT REPORTS [2013] 14 S.C.R.
A The Chapter Notes on this Entry has explained the
products as under:
"33.04 - BEAUTY OR MAKE-UP PREPARATIONS AND
PREPARATIONS FOR THE CARE OF THE SKIN
B (OTHER THAN MEDICAMENTS), INCLUDING
SUNSCREEN OR SUN TAN PREPARATIONS;
MANICURE OR PEDICURE PREPARATIONS.
3304.10 -Lip make-up preparations.
c 3304.20 -Eye make-up preparations.
3304.30 -Manicure or pedicure preparations.
Other
D 3304.91 - -Powders, whether or not compressed.
3304.99 - - Other
(A) BEAUTY OR MAKE-UP PREPARATIONS AND
PREPARATIONS FOR THE CARE OF THE SKIN,
E
INCLUDING SUNSCREEN OR SUN TAN
PREPARATIONS
This part covers:
F (1) Lipsticks and other lip make-up preparations.
(2) Eye shadow, mascara, eyebrow pencils and other
eye make-up preparations.
(3) Other beauty or make-up preparations and
G
preparations for the care of the skin (other than
medicaments), such as: face powders (whether or
not compressed), baby powders (including talcum
powder, not mixed, not perfumed, put up for retail
H
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 47
CIENS LABORATORIES, MUMBAI [KURIAN, J.)
sale), other powders and grease paints; beauty A
creams, cold creams, make-up creams, cleansing
creams, skin foods (including those containing
bees' royal jelly) and skin tonics or body lotions;
petroleum jelly, put up in packings of a kind sold by
retail for the care of the skin; barrier creams to give B
protection against skin irritants; anti-acne
preparations (other than soaps of heading
34.01) which are designed primarily to cleanse the
skin and which do not contain sufficiently high levels C
of active ingredients to be regarded as having a
primary therapeutic or prophylactic effect against
acne; toilet vinegars which are mixtures of vinegars
or acetic acid and perfumed alcohol.
Sunscreen or suh tan preparations are also D
included.
(B) MANICURE OR PEDICURE PREPARATIONS
Thi.s part covers nail polishes, nail varnishes, nail E
varnish removers, cuticle removers and other
preparations for use in manicure or pedicure.
The heading does not cover:
(a) Medicinal preparations used to treat certain skin F
complaints, e.g., ·creams for the treatment of
eczema (heading 30.03 or 30.04).
(b) Foot deodorants and preparations for treating nails
or claws on animals (heading 33.07)." G
(Emphasis supplied)
6. Entry 30.04 reads as follows:
H
48 SUPREME COURT REPORTS· [2013] 14 S.C.R.
A "Heading Sub- Description of goocts Rate of
. No. .'
heading duty
No
..
(1) (2) (3) (4)
8
30.04. 3004.00 Wadding, gauze, 15%
.. . bandages and similar .
articles (for example,
. dressings, adhesive
c plasters, poultices),
impregnated or
' .
•. . ., . coated with
pharmaceutical .
substances or put up
in forms or packings .,
for medic.al, surgical,
dental or veterinary
:· . purpose.".
7. The pharmaceutical contents of the product 'Moisturex'
E are as follows: ·
"Urea l.P. -10%
Propylene Glycol J.P. -10%
(
F Lactic Acid I. P. -10%
'"
Liquid. Paraffin J.P. -10%
Cream Base." •
G 8. It is the contention of the learned counsel for the Central ,
Excise-appellants herein that the product 'Moisturex' is mainly
used for care of the skin and thus, they are to be classified as
cosmetic or toilet preparations and are to be. treated under
Heading 33.04. It is further contended that even if such cosmetic
H products contain certain subsidiary pharmaceutical contents or
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 49
CIENS LABORATORIES, MUMBAI [KURIAN, J.]
even if they have certain subsidiary curative or prophylactic A
value, still, they are to be treated as cosmetics only. It is also
contended that the product is sold across or under the counter
and the same can be purchased without prescription of a
medical practitioner and hence it is not medicament.
B
9. On the other hand, it is submitted on behalf of the
assessee that the very presence of pharmaceutical substances
will change the identity of the product since such constituents
are used not for care of the skin but for cure of certain diseases
relating to skin. The container of the product has given the C
following indications for use:
"lchthyosis vulgaris, Fissure foot, Dry Scaly Skin conditions"
10. In the product literature, the cream is indicated for any
dryness of skin associated with winter, fissure feet, cracked D
nipples, in the treatment of pathological dry skin conditions and
also for dryness associated with leprosy and clofazimine.
Detailed discussion on the pharmaceutical content and its use
for treatment of dry skin conditions of human skin is given at
Paragraph 12 in Time Pharma vs. Commissioner of Central E
Excise, Mumbai-II, 1 wherein the Customs, Excise and Gold
(Control) Appellate Tribunal, West Zonal Bench, Mumbai held
that the product is a medicament. Since there is no dispute as
to the description of the product, the contents and the usage,
we shall extract paragraph 12: -
F
"12. It is. further stated that the product literature is given
for use by medical practitioners. This gives the
pharmacology of the ingredients in the product; under the
heading, "Indications & usage", it is stated that Moisturex
cream is indicated in dryness of skin associated with G
winter. fissure feet. cracked nipples. in the treatment of
pathological drv skin conditions like ichthyosis and it is also
indicated in dryness associated with leprosy and
1. 1998 (99) E.LT. 643 (Tri. Mumbai) H
50 SUPREME COURT REPORTS [2013] 14 S.C.R.
A clofazimine. It contain a precaution and warning against
application in large quantities as it contains keratolytic
moisturing agent that have potential to cause irritation and
stinging sensation; it is not to be used near eyes and
mucous membranes. The dosage and administration is
B indicated that thin layer of the cream should be applied to
the affected area (emphasis supplied) once or twice daily
and in case of severe dry skin conditions three times
application may be required."
(Emphasis supplied)
c
It is brought to our notice that the said decision has
attained finality qua the assessee therein since the Special
Leave Petition filed by the Central Excise was dismissed.
D 11. In the Chapter Note dealing with cosmetics, it is clearly
provided that the preparations for the care of skin, beauty or
make-up preparations are the ones covered by the Heading
3,3.04 for the care of the skin. The Note has specifically
excluded medicaments. Still further, in the Chapter Note under
Heading 33.04(8) also, it is clarified that medicinal preparations
E
used to treat certain skin complaints are to be covered under
the Heading 30.03 (medicaments) or Heading 30.04 (products
containing pharmaceutical substances used for medical,
surgical, dental or veterinary purposes).
F 12. Thus, if a product comprises of two or more
constituents which have been mixed or compounded, together
for therapeutic or prophylactic use, the same is to be covered
by Heading 30.03. Urea, lactic acid, propylene glycol are
pharmaceutical constituents as per as Indian Pharmacopoeia.
G
13. The contention that 'Moisturex' is a moisturizing cream
used for softening the skin cannot be appreciated. As we have
already discussed, the use of the cream is not for the care of
the skin. 'Moisturex' is also not primarily intended to protect the
H skin from sun, tan or dryness, etc. On the other hand, it is
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 51
CIENS LABORATORIES, MUMBAI [KURIAN, J.]
intended for treating or curing the dry skin conditions of the A
human skin and for a few.other skin complaints like fissure feet,
dry scaly skin conditions, ichthyosis, etc. The argument
advanced on behalf of the Central Excise that use of urea or
lactic acid or propylene glycol, etc., is only as subsidiar,y
pharmaceutical constituents and, hence, they cannot be held out B
as having curative, therapeutic or prophylactic value, cannot
also be appreciated. It is the presence of the ingredients of the
pharmaceutical constituents which makes the difference and not
the percentage of the ingredients as held by this Court in
Meghdoot Gramodyog Sewa Sansthan vs. Commissioner of c
Central Excise, Lucknow2 . It was held that the composition and
the curative properties would make the difference in the
classification. If the product is composed of pharmaceutical
constituents which have curative properties, the product is to
be classified as medicament. To quote: o
"6. The appellant has drawn our attention to the
composition of the six products and the uses in respect of
each of these six products. This has not been doubted by
the Tribunal nor indeed by the Departmental authority. The
composition and the curative properties being admitted. E
it was not open either to the Department or the Tribunal to
hold that the items were cosmetics merely by reason of the
outward packing."
(Emphasis supplied) F
14. Another contention advanced by the appellant-Central
Excise is that the product is sold not under any medical
prescription but the same is available across or un'der the
counter and, hence, the same cannot be treated as
medicament. This contention also has been rejected by this G
Court in Commissioner of Central Excise, Calcutta vs. Sharma
Chemical Works. 3 To quote:
2. (2004) 174 E.L.T. 14 (S.C.)
3. 2003 (154) E.L.T. 328 (S.C.) H
52 SUPREME COURT REPORTS [2013) 14 S.C.R.
A "12 .... 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.
<lakshmikumarn that merely because the percentage of
B medicament in a product is less, does also ipso facto
mean that the product is not a medicament. Generally the
percentage or dosage of the medicament will be such as
can be 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 aM
c the ingredients used in Banphool Oil. are. those Which are
set out in the Ayurveda text bboks. Of course the formula
may not be as per the text books but a medicament can
··also be under a patented or proprietary formula. The main
criteria for determining classification is normally the use it
D
is put to by the customers who use it. ... "
(Emphasis supplied)
15. In Puma Ayurvedic Herbal (P) Ltd. vs. Commissioner
E of Central Excise, Nagpur4, it was held that the purpose of
cosmetic product is to improve the appearance of a person and
for enhancing the beauty whereas a medicinal product or
medicament is meant to treat some medical condition. It was
also held that merely because a product is sold not under a
F doctor's prescription, the same does not cease to be a
medicament. In both these cases, it was held that minimal
presence of medicinal element does not detract the product
from being classified as a medicament. To quote:
"20. It will be seen from the above definition of cosmetic
G that the cosmetic products are meant to improve
appearance of a person. that is. they enhance beauty.
Whereas a medicinal product or a medicament is meant
H 4. 2006 (196) E.L.T. 3 (S.C.)
COMMISSIONER OF CENTRAL EXCISE, MUMBAI JV v. 53
CIENS LABORATORIES, MUMBAI [KURIAN, J.]
to treat some medical condition. It may happen that while A
treating a particular medical problem, after the problem is
cured, the appearance of the person concerned may
improve. What is to be seen is the primary use of the
product. To illustrate, a particular Ayurvedic product may
be used for treating baldness. Baldness is a medical B
problem. By use of the product if a person is able to grow
hair on his head, his ailment of baldness is cured and the
person's appearance may improve. The product used for
the purpose cannot be described as cosmetic simply
because it has ultimately Jed to improvement i11 c
appearance of the person. The primary role of the product
was to grow hair on his head and cure his baldness.
21. The extent or the quantity of medicament used in a
particular product will also not be a relevant factor.
Normally, the extent of use of medicinal ingredients is very D
low because a larger use may be harmful for the human
body. The medical ingredients are mixed with what is in
the trade parlance called fillers, or vehicles in order to make
the medicament useful. To illustrate an example of Vicks
Vaporub is given in which 98% is said to be paraffine wax, E
while the medicinal part i.e. Menthol is only 2%. Vicks
Vaporub has been held to be medicament by this Court
in CCE v. Richardson Hindustan Ltd. 1989 (42) ELT
A 100. Therefore, the fact that use of medicinal element in
a product was minimal does not d~tract from it being F
classified as a medicament.
22. In order to be a medicinal preparation or a medicament
it is not necessary that the item must be sold under a
doctor's prescription. Similarly availability of the products G
across the counter in shops is not relevant as it makes no
difference either way."
(Emphasis supplied)
H
54 SUPREME COURT REPORTS [2013) 14 S.C.R.
A 16. ln Union of India vs. G. D. Pharmaceutical Limited, 5
the Calcutta High Court considered the question as to whether
the product 'Boroline' containing boric acid with zinc oxide
would be a medicament or cosmetic. It was held that the very
presence of the pharmaceutical constituents like boric acid and
B zinc oxide will make the product medicament and not cosmetic.
We are in respectful agreement with the views taken in the
above-mentioned decisions.
17. We shall also refer to the decision in Alpine Industries
vs. Collector of Central Excise, New Delhi6, wherein this Court
C despite a certificate from Army that the cream 'Lip Salve' is
used for treatment of sore, inflamed, roughened and cracked
lips, declined to include the same in the category of
medicament. It has been found that the product is meant for the
care of the lips and not for the cure of the skin, being a
D protective/preventive preparation for chapping of lips though it
has an incidental use on cracked and chapped lips. To quote:
"7. We have gone through the pharmaceutical and medical
literature produced before us in the course of hearing and
E which has been duly dealt with by the Tribunal in its minority
and majority opinion. The certificate issued by the Army
Authorities and the chemical ingredients of the product are
not decisive on the question of classification of the product
for levy of excise duty. It is firmly established that on the
F question of classification of product under Central Excise
Tariff Act, "commercial parlance theory" has to be applied.
It is true that the entire supply by the appellant of its product
'Lip Salve' has been to the Defence Department for use
of military personnel but that would also not be
determinative of the nature of the product for classifying
G
it. It is not disputed that the product 'Lip Salve' is used for
the care of the lips. It is a product essentially for "care of
skin" and not for "cure of skin". It is, therefore, classifiable
5. 1998 (100) E.L.T. 24 (Cal.)
H 6. 2003 (152) E.L.T. 16 (S.C.)
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 55
CIENS LABORATORIES, MUMBAI [KURIAN, J.]
as a skin care cream and not a medicament. From the A
nature of the product and the use to which it is put, we do
not find that the claim of the appellant is acceptable that it
is primarily for therapeutic use. What we find from the
material produced before the Tribunal is that essentially the
product is a protective/preventive preparation for chapping B
of lips. It is not a curative product maybe that incidentally
on cracked and chappeci lip:;, :! ~~~some curative effect.
It is also not denied that the product 'Lip Salve· is ;:;ot
suitable for use only for soldiers operating in high altitude
areas but it is of use for every one as protection from dry, c
cold weather or sun rays. The product. therefore. essentially
is protective of skin of lip. It is lip care product and not a
'medicament'. It is neither prescribed by any doctor nor
obtainable from the Chemist or Pharmaceutical shops in
the market."
D
(Emphasis supplied)
18. Similarly, in Sunny Industries Private Limited vs.
Collector of Central Excise: Calcutta, 7 while considering the
question as to whether the Ad-vitamin Massage Oil forte could E
be medicament, it has been held that the same not being used
for cure of skin but for care of skin, it can only be classified under
33.04 as a skin care oil. To quote:
"11. From the aforesaid Chapter notes, it is clear that
heading 33.03 would include products whether or not they F
contain subsidiary pharmaceutical or antiseptic
constituents. or are held out as having subsidiary curative
or prophybctic value and heading 33.04 would inter alia
include the products specified therein and other
preparations for use in manicure or chiropody and barrier G
creams to give protection against skin irritants. Therefore,
the product mainly oil containing some A&D vitamins which
is used for massage, even if it prevents ailment of rickets
7. 2003 (153) E.L.T. 259 (S.C.) H
56 SUPREME COURT REPORTS [2013) 14 S.C.R.
A and treats the same. it cannot be held to be medicaments."
(Emphasis supplied)
19. Thus, the following guiding principles emerge from the
above discussion. Firstly, when a product contains
B pharmaceutical ingredients that have therapeutic or prophylactic
or curative properties, the proportion of such ingredients is not
invariably decisive. What is of importance is the curative
attributes of such ingredients that render the product a
medicament and not a cosmetic. Secondly, though a product
C is sold without a prescription of a medical practitioner, it does
not lead to the immediate conclusion that all products that are
sold over I across the counter are cosmetics. There are several
products that are sold over-the-counter and are yet,
medicaments. Thirdly, prior to adjudicating upon whether a
D product is a medicament or not, Courts have to see what the
people who actually use the product understand the product to
be. If a product's primary function is "care" and not "cure", it is
not a medicament. Cosmetic products are used in enhancing
or improving a person's appearance or beauty, whereas
E medicinal products are used to treat or cure some medical
c:ondition. A product that is used mainly in curing or treating
ailments or diseases and contains curative ingredients even in
small quantities, is to be branded as a medicament.
20. In the case of 'Moisturex', there is no dispute that the
F said cream is prescribed by the dermatologist for treating the
dry skin conditions and that the same is also available in
chemist or pharmaceutical shops_ in the market. The cream is
not primarily intended for protection of skin. The ingredients in
the cream, _th.E:l pharmaceutical substances do show that it is
G used for prophylactic and therapeutic purposes. The Central
Excise Tariff Act has unambiguously clarified as to what is a
medicament for curing an ailment relating to skin. Heading
33.04 dealing with beauty or make-up preparations and
preparations for the care of the skin has specifically excluded
H medicaments. There is also an indication under the same entry
COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV v. 57
CIENS LABORATORIES, MUMBAI [KURIAN, J.]
that medicinal preparations used to treat certain complaints are A
to be provided under the Heading 30.03 (medicaments) or
30.04 (products containing pharmaceutical substances used
for medical, surgical, dental or veterinary purpose).
21. Tribunals, the Customs, Excise and Gold (Control) B
Appellate Tribunal, West Zonal Bench at Mumbai in the first
case and Customs, Excise and Service Tax Appellate Tribunal,
West Zonal Bench at Mumbai in the other, having regard to the
pharmaceutical constituents present in the cream 'Moisturex'
and its use for the cure of certain skin diseases, have rightly
held that the same is a medicament liable to be classified under C
the Heading 30.03 (medicament). Thus, there is no merit in
these appeals. They are accordingly dismissed. No costs.
Kalpana K. Tripathy Appeals dismissed.
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