Holding

A product that has not changed in nature, character or use cannot be re‑classified as an Ayurvedic medicament merely because of a new tariff entry; Dant Manjan Lal is a tooth powder and must be classified under Chapter 33.06, not under Sub‑heading 3003.31.

Summary

Baidyanath Ayurved Bhawan Ltd. manufactures Dant Manjan Lal, a tooth powder prepared according to Ayurvedic formulas. Earlier it was classified as a medicine and exempt from excise duty, but the Tribunal later held it to be a toilet requisite. After the Central Excise Tariff Act, 1985 introduced Sub‑heading 3003.31 for Ayurvedic medicaments, Baidyanath argued that DML should be re‑classified as a medicament and enjoy exemption. The Court examined whether the new tariff entry provides a statutory definition of "Ayurvedic medicine" and whether a change in tariff alone can alter classification. It held that Sub‑heading 3003.31 does not define Ayurvedic medicine, the common‑parlance test remains determinative, and without a change in the product’s nature, character or use classification cannot be altered. Consequently, DML is a tooth powder and must be placed under Chapter 33.06, subject to excise duty. The appeal of Baidyanath was dismissed and the Department’s appeal allowed.

Issues considered

The Sub‑heading 3003.31 of the Central Excise Tariff Act, 1985, does it provide a statutory definition of ‘Ayurvedic medicine’ that overrides the common‑parlance test?
Whether Dant Manjan Lal should be classified as a medicament under Chapter 30.03/3003.31 or as a toiletry/tooth powder under Chapter 33.06.
Whether a mere change in tariff entry, without any change in the nature, character or use of the product, justifies a re‑classification.
Whether the definition of ‘Ayurvedic drug’ in the Drugs and Cosmetics Act, 1940 can be imported into the Central Excise Tariff for classification purposes.
Whether principles of res judicata and related maxims prevent revisiting the earlier classification of the product.

Legislation cited

Central Excise and Salt Act, 1944
Central Excise Tariff Act, 1985s. Chapter 30, s. Chapter 33.06, s. Sub‑heading 3003.31
Drugs and Cosmetics Act, 1940s. Section 3(a)

Subjects

central exciseclassificationtariffAyurvedic medicinecommon parlance testmedicamenttooth powderres judicatastatutory definitionexcise duty

Judgment

[2009] 5 S.C.R. 879

COMMISSIONER OF CENTRAL EXCISE, NAGPUR A
II.
SHREE BAIDYANATH AYURVED BHAW AN LTD.
(Civil Appeal No. 4048 of 2001)
APRIL 13, 2009
B
[D.K. JAIN AND R.M. LODHA, JJ.]

Central Excise Tariff Act, 1985:

Classification - Dant Manjan Lal - Held: Is tooth powder c
and specifically covered by Chapter SH 3306 and not under
Chapter SH 3003.31 as medicament- It is used routinely for
dental hygiene - By virtue of note 1(d) of Chapter 30, even if
... the product has some therapeutic _or medicinal prop~rties, it
stands excluded from Chapter 30 - Common parlance test
0
continues to be determinative test for classification of product
either medicament or cosmetic - Drugs and Cosmetics Act,
1940 - s.3(a) - Interpretative Rules - Rule 3(a).

Change in classification - Criteria for - Held: There has
to be change in nature or use of the product - Mere difference E
in tariff entries would not change character of the product.

"\ Classification of product - Determining factor - Held:
_1 ' - User's understanding is relevant factor- It is important to see
\ how user/consumer looks at a product and what is his F
perception in respect of such product - Common parlance
test' continues to be determinative test of classification of
product - Heading which provides most specific description
is to be' preferred to headings providing a more general
description.
G
-.... Interpretation of statutes: Definition of one statute having
different object, purpose and scheme cannot be applied
mechanically to another statute - Section 3(a) of Drugs and

879 H
880 SUPREME COURT REPORTS [2009] 5 S.C.R.

A Cosmetic Act, 1940 defines 'Ayurvedic, Sidha or Unani Drugs
but that definition is not necessary to be imported in Central
Excise Tariff Act.

Maxims: Maxim 'Nemo debet bis vexari pro una et
eadem causa' and maxim 'interest republicae sit finis litium'
8
- These maxims cannot be applied as rule of thumb in
taxation matters.

The assessee is manufacturing a product named
Dant Manjan Lal (DML). The product is a powder
C compounded with Geru, Peepall, Sonth, Kali Mirch,
Tambakuh, Clove Oil, Camphor, Pepperment, Babul
Chhal, Tumber Beej. Assessee claimed that DML is
manufactured in accordance with the formulae given in
Ayurved Sar Sangraha (an authoritative text on the
D Ayurved system of medicine) by using the ingredients
mentioned therein. Ayurved Sar Sangraha is notified
under the First Schedule of the Drugs and Cosmetics
Act, 1940. It is also the case of the assessee that DML was
sold in the name which is specified in Ayurved Sar
E Sangraha. Prior to 1975, the product DML was considered
to be classifiable under Tariff Item 14E of the First
Schedule of the Central Excise and Salt Act, 1944 which
item covered medicines. Accordingly, it was not
subjected to levy of excise duty and exempted therefrom.
-
,.

F On March 1, 1975, Residuary Item 68 was incorporated
in the Act, 1944 wherein all items not elsewhere specified
in the tariff were liable to be classified. Assessee filed a
fresh classification list and commenced paying excise
duty as was leviable under Residuary Item 68 of the Act,
G 1944.

On March 1, 1978, the Central Government issued an
Exemption Notification No. 62178-CE whereby exemption
was extended to " ..... all drugs, medicines,
pharmaceuticals and drug intermediates not elsewhere
H specified." Assessee claimed the benefit extended under
) COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 881
BAIDYANATHAYURVED BHAWAN LTD.

the said Notification and stopped paying duty on the A
product while filing fresh classification list.

In March, 1980, Department issued notices to the
assessee asking them to show cause as to why the
product should not be subjected to tariff rate without 8
treating it as an Ayurvedic Medicine and without
extending the benefit available under the Notification
No.62/78-CE. The matter came up before the Tribunal. It
held that in common trade parlance, DML is neither
treated nor understood as an Ayurvedic Medicine and C
hence could not be classified as such, and hence was
not eligible to exemption under Notification No.62/78-CE.
This order was challenged before this Court. It was held
in *Baidyanath that the product DML is to be classified on
the basis of the common trade parlance test and applying·
that test, the tribunal was correct in its finding that DML D
was not known as an Ayurvedic Medicine. The finding of
the tribunal that DML was toilet requisite was upheld.
During the pendency of the appeals before this Court,
Central Excise Tariff Act, 1985 was enacted which
replaced the Schedule to the Act, 1944. Chapter 30 of the E
New tariff Act dealt with pharmaceutical products.
'·-, Chapter Sub-heading 3003.30 provided for no excise
duty leviable on medicaments, including those used in
~ Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic
\ System. F

In October 1991, Board advised its field formations
to classify the product as toilet requisite. The assessee
approached the Board by way of representation putting
forth the plea that after the introduction of New Tariff Act G
and the amendments made in 1996, there is a specific
~ definition of Ayurvedic Medicine and hence classification
, of its product DML should be done on the basis of that
\ definition alone and not the common trade parlance test.

The Board relied on *Baidyanath and directed H
882 SUPREME COURT REPORTS [2009] 5 S.C.R.

A classification as toilet requisite. Department issued notice
to assessee to show cause as to why DML be not
classified as a toiletry under Chapter 33 of New Tariff Act.
In view of conflicting opinions of different benches,
matter was referred to larger bench of Tribunal which held
B that the product DML was classifiable under Chapter
Heading 33.06 of the New Tariff Act. The Department and
assessee filed appeals before this Court.

Dismissing the appeals of assessee's and allowing
C appeals of Department, the Court

HELD: 1. Merely because there is some difference in
the tariff entries, the product will not change its character.
Something more is required for changing the
classification especially when the product remains the
D same. There cannot be justification enough for changing
the classification without a change in the nature or a
change in the use of the product. The exception being
where Tariff Act itself provides for a statutory definition,
obviously, the product has to be classified as per the
E definition. [Paras 30 and 31) [903-B, CJ

.BPL Pharmaceuticals Ltd. v. Collector of Central Excise,
Vadodra (1995) 3 SCC 1, relied on.

2. The description of goods cannot be treated as
F definition. Chapter Sub-heading 3003.31 provides
process for manufacture of certain medicaments
including those used in Ayurvedic system and sale of the
l
same; it is not a definition clause. Classification of a +--
product, interpretative Rule 1 of rules for interpretation of
G the Schedule says, is to be determined according to the
terms of the heading and any relative Section or Chapter
Notes and provided such headings or Notes do not
otherwise require. Chapter Sub-heading 3003.31 is an
entry double dash (--) occurring under the single dash (-)
-
H heading for medicament including those in Ayurvedic
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 883
/1. BAIDYANATHAYURVED BHAWAN LTD.

Systems. As per general explanatory Note 1 appended to A
rules for interpretation, single dash (-) indicates the said
article or group of articles to be a sub-classification of the
article or group of articles covered by the said heading
and double dash (--) indicates, the said article or group
of articles to be a sub-classification of the immediately B
preceding description of article or group of articles which
has single dash (-). It is, thus, clear that Chapter Heading
30.03 would cover every Sub-heading as well. Therefore,
to find out whether the product described against Sub-
heading 3003.31 is a medicament or not, aid to Note 2 of c
Chapter 30 for the purposes of Heading 30.03 is
necessarily called in. Note 2 to Chapter 30 defines
medicaments for the purposes of Heading 30.03 as
products comprising two or more constituents which
have been mixed or compounded together for therapeutic
0
)
or prophylactic uses or unmixed products suitable for
such uses. The use of expression ~·uses" in Note 2 is not
without significance and is surely distinct from the
expression "properties" used in Note 1(d) of Chapter 30.
The term "uses" brings within its comprehension, the act
of user and, thus, there is merit in the submission that E
common parlance test is inbuilt in Chapter Heading 30.03.
[Para 34] [904-A-H; 905-A]

Puma Ayurvedic Herbal (P) Ltd. v. Commissioner,
Central Excise,Nagpur (2006) 3 SCC 266, relied on. F

Shree Baidyanath Ayurved Bhawan Ltd. v. Collector of
CenKraf Excise, Nagpur (1996) 9 SCC 402; BPL
Pha~ceutical Limited v.Col/ector of Central Excise,
Vadodra (1995) 77 ELT 500 (SC); Collector of Central Excise G
v. Andhra ,Sugar Limited (1989) Supp. 1 SCC 144; Oswal
Agro Mills Ltd. v. Collector of Central Excise &Ors. 1993 (6)
ELT 37 SC; Amrutanjan Ltd. v. Collector of Central Excise
(1995) 77 ELT 500 SC; Commissioner of Central Excise,
Calcutta v. Sharma Chemcial Works (2003) 154 ELT 328;
H
884 SUPREME COURT REPORTS [2009] 5 S.C.R.

A Meghdoot Gramodyog Sewa Sansthan v. Commissioner of
Central Excise, Lucknow (2004) 174 ELT 14 SC, referred to.

3. The primary object of the Excise Act is to raise
revenue for which various products are differently
classified in New Tariff Act. Resort should, in the
8
circumstances, be had to popular meaning and
understanding attached to such products by those using
the product and not to be had to the scientific and
technical meaning of the terms and expressions used.
The approach of the consumer or user towards the
C product, thus, assumes significance. What is important
to be seen Is how the consumer looks at a product and
what Is his perception in respect of such product. The
user's understanding is a strong factor in determination
of classification of the products. The contention of the
D assessee cannot be accepted that because DML is
manufactured exclusively in accordance with the
formulae described in Ayurveda Sar Sangrah which is
authoritative text on Ayurvedic system of treatment and
is notified in the First Schedule to the Drugs and
E Cosmetics Act, 1940 and the said product is sold under
the name 'Dant Manjan Lal' which is the name specified
for the said product in Ayurveda Sar Sangrah, the
common parlance test is not applicable. As a matter of
fact, this contention is based on misplaced assumption
F that Chapter Sub-heading 3003.31 by itself provides the
definition of Ayurvedic Medicine and there is no_
requirement to look beyond. [Para 38) [906-G-l(;
907-A-D]

G 4. Section 3(a) of the Drugs and Cosmetics Act, 1940
defines 'Ayurvedic, Sidha or Unani Drug' but that
definition is not necessary to be imported in New Tariff
Act. The definition of one statute having different object,
purpose and scheme cannot be applied mechanically to
H another statute. The object of Excise Act is to raise
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 885
.,-!.
BAIDYANATHAYURVED BHAWAN LTD .

revenue for which various products are differently A
classified in New Tariff Act. [Para 41] [910-C]

5. There is no doubt that a specific entry must prevail
over a general entry. This is reflected from Rule 3(a) of
.. the general Rules of interpretation that states that
heading which provides the most specific description
B
l'
shall be preferred to headings providing a more general
description. DML is a tooth powder which has not been
held to be Ayurvedic Medicine in common parlance in
Baidyanath*. Common parlance test continues to be one
of the determinative tests for classi'ftcation of a product c
' whether medicament or cosmetic. There being no change
"\ in the nature, character and uses of DML, it has to be held
to be a tooth powder - as held in Baidyanath*. DML is
used routinely for dental hygiene. Since tooth powder is
. specifically covered by Chapter Sub-heading 3306, it has D
} to be classified thereunder. By virtue of Chapter Note 1(d)
of Chapter 30 even if the product DML has some
therapeutic or medicinal properties, the product stands
excluded from Chapter 30. [Para 42] [910-E-G]
E
6. It is true that maxim Nemo debet bis vexari pro una
et eadem causa is founded on principle of private justice
", as it states that no man ought to be twice put to trouble
if it appear to the court that it is for one and the same
cause. The maxim Interest republicae sit finis litium
4- F
concerns the State that law suits be not protracted. This
maxim is based on public policy. These maxims cannot
be applied as a rule of thumb in the taxation matters. In
the' matters of classification of goods, the principles that
have been followed by the courts are that there may not
be justification for changing the classification without a
G
change in the nature or a change in the use of the
~ product; something more is required for changing the
classification especially when the product remains the

H
886 SUPREME COURT REPORTS [2009] 5 S.C.R. ,
._
'

A same. Earlier decision on an issue inter parties is a cogent
factor in the determination of the same issue. The
applicability of maxim Res judicata pro veritate occipitur in
the matters of classification of goods has to be seen in
that perspective. The interpretation given by this Court
B in Baidyanath* with regard to this product has been
..
considered and applied by us after amendment because
Chapter Sub-heading 3003.31 does not contain definition
of Ayurvedic Medicine and the product DML in nature,
character and uses remains the same as it was prior to
c amendment. [Para 45) [911-F-H; 912-A-B]
Commissioner of Central Excise, Nagpur v. Vicco
Laboratories (2005) 17 ELT 17 SC, referred to.
r...__
Case Law Reference:
D
(1995) 3 sec 1 relied on Para 30
"'
(

(2006) 3 sec 266 relied on Para 35
(1996) 9 sec 402 referred to Para 3
E (1995) 77 ELT 500 SC referred to Para 18
(1989) Supp. 1 SCC 144 referred to Para 19
~

1993 (6) ELT 37 SC referred to /
Para 19
(1995) 77 ELT 500 SC referred to Para 19
F
(2003) 154 ELT 328 referred to Para 19
(2004) 174 ELT 14 SC referred to Para 19
(2005) 17 ELT 17 SC referred to Para 19
G
CIVIL AP PELLATE JURISDICTION : Civil Appeal No.
4048 of 2001.
~

From the Judgment & Order dated 13.12.2000 of the
Custom Excise and Gold (control) Appellate Tribunal West
..
H
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 887
BAIDYANATH AYURVED BHAWAN LTD.
Regional Bench at Mumbai against the impugned Final Order A
no. C-1/4292/WZB/200, in Appeal No. E/2237/99 Born.

WITH

C.A. Nos. 2396-2397 of 2003, 9739-9746 of 2003, 6691
•· of 2003, 1521 of 2003. B

K. Radhakrishnan, T.V. Ratnam, Kiran Bhardwaj, Anil
Katiyar and B. Krishna Prasad for the Appellant.
,
C.A. Sundram, Vivek Kohli, Ashwani Sharma, Rohini C
Musa, Abhishek Gupta, Sudeep Vijayan, Zafar and Anandh
Kannan for the Respondent.

The Judgment of the Court was delivered by

• R.M. LODHA, J. 1. The only issue in this batch of thirteen D
civil appeals is in respect of classification of "Dant Manjan Lal"
(DML) manufactured by M/s. Baidyanath Ayurved Bhawan
Limited ('Baidyanath', for short). While Baidyanath contends
that the product DML is a medicament under Chapter Sub-
heading 3003.31 of the Central Excise Tariff Act, 1985, the E
stand of the Department is that the said product is a cosmetic/
toiletry preparation/tooth powder classifiable under Chapter
Heading 33.06.
~\ 2. The true classification of the product DML has been
i \ subject of fluctuating opinion among the benches of the F
~ , Customs, Excise and Gold (Control) Appellate Tribunal (for
short, 'Tribunal'). West Regional Bench of the Tribunal decided
the classification in favour of Baidyanath and held that DML is
classifiable under Chapter Sub-heading 3003.31. The similar
view has been taken by East Regional Bench of the Tribunal. G
However, the larger bench of the Tribunal to which the issue of
classification of DML was referred, has held that DML is
classifiable under Chapter Sub-heading 3306.10. It is for this
reason that the Department as well as Baidyanath have
preferred separate appeals. H
888 SUPREME COURT REPORTS [2009] 5 S.C.R.
·'<
A 3. The litigative journey with regard to classification of this
product has reached this Court earlier in Shree Baidyanath
Ayurved Bhawan Ltd. Vs. Collector of Central Excise,
Nagpur1• We shall refer to that decision a little later. First we
shall advert to the sequence of facts leading to the present
B controversy.

4. Baidyanath is engaged in the activity of manufacturing
medicines adopting Indian systems. They have their works
situate at Calcutta (now Kolkata), Naini, Patna, Nagpur and
Jhansi. One of the products being manufactured by Baidyanath
c is DML. The product is a powder compounded with Geru,
Peepall, Sonth, Kali Mirch, Tambakuh, Clove Oil, Camphor,
Pepperment, Babul Chhal, Tumber Beej. Baidyanath claims
that DML is manufactured in accordance with the formulae
given in Ayurved Sar Sangraha (an authoritative text on the
D Ayurved system of medicine) by using the ingredients •
mentioned therein. Ayurved Sar Sangraha is notified under the
First Schedule of the Drugs and Cosmetics Act, 1940 ( for short
'Act, 1940'). It is also the case of the Baidyanath that DML is
sold in the name which is specified in Ayurved Sar Sangraha.
E
5. Prior to 1975, the product DML was considered to be
classifiable under Tariff Item 14E of the First Schedule of the
Central Excise and Salt Act, 1944 ( for short 'Act, 1944') which
item covered medicines. Accordingly, DML was not subject to "'
F levy of excise duty and exempted therefrom. On March 1, 1975, ~
Residuary Item 68 was incorporated in the Act, 1944 wherein
all items not elsewhere specified in the tariff were liable to be
•
classified. Baidyanath filed a fresh classification list and
commenced paying excise duty as was leviable under
Residuary Item 68 of the Act, 1944.
G
6. On March 1, 1978, the Central Government issued an
Exemption Notification bearing No. 62/78-CE whereby
exemption was extended to "..... all drugs, medicines,
....
-..
H 1. (1996) 9 sec 402.
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 889
BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]
pharmaceuticals and drug intermediates not elsewhere A
-, specified." Baidyanath claimed the benefit extended by the
Central Government under the said Notification and stopped
paying duty on the product DML while filing fresh classification
list.
... B
+, 7. In the month of March 1980, the Department expressed
doubts about the classification of DML and issued notices to
Baidyanath requiring them to show cause as to why DML be
not subjected to tariff rate without treating it as an Ayurvedic
Medicine and without extending the benefit available under the
Notification No.62/78-CE.
c

-- ...
8. Baidyanath resisted various show cause notices on
diverse grounds, namely; that DML is an Ayurvedic Medicine,
tha1 it manufactures the same under a drug licence; that all the
ingredients of DML are mentioned in the authoritative book of D
) Ayurved System of Medicine; and that the product is an
Ayurvedic Medicine in the trade and common parlance. The
Baidyanath, thus, claimed that it was eligible for the benefit
extended under the Notification No.62/78-CE.
E
9. The view of adjudicating authorities who issued show
cause notices was not uniform. Their opinion has been varied.
While some of the adjudicating authorities held that DML was
an Ayurvedic Medicine; the others took the view that it was not
l\\ so. All these matters ultimately found their way to the Tribunal.
On July 14, 1985, the Tribunal delivered its judgment in the
F
matter and held that in common trade parlance, DML is neither
treated nor understood as an Ayurvedic Medicine and hence
could not be classified as such. The Tribunal, thus, held that the
product DML was not eligible for the benefit extended under
Notification No.62/78-CE as it was not covered by the category G
of goods mentioned at Sr.No.19 of the schedule to the said
~ notification. Pertinently, the goods mentioned in the said
category included 'drugs, medicines, pharmaceuticals and drug
_..• intermediates' not elsewhere defined.
H
890 SUPREME COURT REPORTS (2009] 5 S.C.R.

A 10. The aforesaid order of the Tribunal came to be
challenged at the instance of Baidyanath before this Court in ,,
various appeals. The appeals were admitted and finally
disposed of on March 30, 1995 (referred to hereinafter as
Baidyanath 11) . This Court held that the product DML would
B have to be classified on the basis of the common trade parlance ..
test and applying that test, the Tribunal was correct in its finding ~

that DML was not known as an Ayurvedic Medicine. The finding
of the Tribunal that DML was toilet requisite was upheld. Be it
noticed here that during the pendency of the appeals before this
c Court, Central Excise Tariff Act, 1985 (for short, 'New Tariff Act'
) was enacted which replaced the Schedule to the Act, 1944.
Chapter 30 of the New tariff Act deals with pharmaceutical
products. Chapter Sub-heading 3003.30 provided for no excise
duty leviable on medicaments, including those used in
D
Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic System. ..
On August 28, 1987, the First Schedule to the Drugs and
Cosmetic Act, 1940 was amended and the book 'Ayurved Sar
Sangraha' was included therein.
11. On September 25, 1991, the Central Board of Excise
E and Customs (for short, 'the Board') issued a circular in respect
of DML and advised its classification as an Ayurvedic Medicine.
It is Baidyanath's case that in pursuance of the circular dated
September 25, 1991, the concerned Commissioner of Central ,;
Excise issued trade notices directing the field formations to
F classify DML as an Ayurvedic Medicine. The assessee filed -'
classification list in its various units declaring DML as an
Ayurvedic Medicine and claimed the exemption benefit
extending thereto. Baidyanath, thus, stopped paying excise duty
on DML.
G
12. During 1996-97, Chapter 30 of the New Tariff came to
be amended. Under Chapter Heading 30.03, Sub-heading
3003.31 was inserted which provided levy of nil duty in respect .,,
of the medicaments manufactured exclusively in accordance
H
with the formulae described in the authoritative books in the ---
. COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 891
-"' BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]
' A
First Schedule to the Drugs and Cosmetics Act, 1940.

13. On October 31, 1996, the Board withdrew the circular
dated September 25, 1991 and advised its field formations to
classify the product DML in accordance with the order passed
•· by this Court in Baidyanath 11. The assessee approached the B
¥ Board by way of representation putting forth the plea that after
the introduction of New Tariff Act and the amendments made
.in 1996, there is a specific definition of Ayurvedic Medicine and
hence classification of its product DML should be done on the
basis of that definition alone and not the common trade parlance
test. The Board thereafter on May 27, 1997, sent communication
c
_.... to the Commissioner of Central Excise, Nagpur, concerning the
classification of DML to decide the classification of the product
.. in the ligltt of opinion of Drug Controller of India as well as·
instructions;·contained in the circulars dated March 29, 1994
) and April 3, 1996. D

14. On September 10, 1997, the Board withdrew its
circular dated May 27, 1997 and directed classification of DML
in terms of judgment of this Court in Baidyanath 11 with regard
to this very product. E
15. In pursuance of the circular issued by the Board on
• October 31, 1996, several notices came to be issued to
Baidyanath by various Excise Authorities at Patna; Allahabad
'- (Naini); Jhansi and Nagpur asking them to show cause as to
why DML should not be classified as a toiletry under Chapter F
33 of the New Tariff Act and duty be demanded accordingly.
\ The show cause notices were resisted and contested by
'Baidyanath and the matter reached the Tribunal. As stated
above, West Regional Bench and East Regional Bench of the
Tribunal decided the classification in favour of Baidyanath. G
Thereafter, the classifiability issue of DML came up for
·~
consideration before the Principal Bench of the Tribunal at New
.-- Delhi and the Bench doubted the correctness of the decisions
of West Regional Be_11ch and East Regional Bench and referred

,, the issue to the Larger Bench. The Larger Bench of the Tribunal H
892 SUPREME COURT REPORTS [2009] 5 S.C.R.
"'
A decided the reference and held that the product DML was
classifiable under Chapter Heading 33.06 of the New Tariff Act.

16. The factual position that the product DML is
manufactured by Baidyanath in accordance with the formulae
mentioned in the book 'Ayurved Sar Sangraha' which is notified •
8 _.
in the First Schedule appended to Drugs and Cosmetics Act,
1940 and that the product is sold in the name which is specified
in that ,book has not been seriously put in issue by the
Department before us.
c 17. We heard Mr. C.A. Sundram, learned senior counsel
for Baidyanath and Mr. K. Radhakrishnan, learned senior
counsel for the Department at quite some length.

18. Mr. C.A. Sundram would contend: (i) that the product
DML falls under Chapter Sub-heading 3003.31 as it is a •
D
medicament because it comprises of two or more constituents
which have been mixed together for therapeutic and .
prophylactic uses. It is manufactured exclusively in accordance
with the formulae described in 'Ayurved Sar Sangraha' which
is an authoritative text on the Ayurvedic System of treatment
E
and is notified in the First Schedule to the Drugs and Cosmetics
Act, 1940. Moreover, in accordance with the provisions of the
Drugs and Cosmetics Act, 1940, the said product is ,,.
/
manufactured by Baidyanath under a drug licence issued by (
the concerned competent authority. Further, the product is sold I J.
F under the name of 'Dant Manjan Lal' which is the name
specified for the said product in 'Ayurved Sar Sangraha', (ii)
that the Government accepts that the product DML is a classical
or pharma-copoeial Ayurvedic Medicine. During ~he
parliamentary debates, the Finance Minister clearly stated that
G !f the two conditions are met namely, the product is
manufactured exclusively in accordance with the formulae
described in the authoritative text on the Ayurvedic System of ~·
treatment and is notified in the First Schedule to the Drugs and ~
Cosmetics Act, 1940 and the product is sold in the name which
H is the name specified for the said product in the authoritative
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 893
BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]
text, there is no duty on the product; (iii) that the New Tariff Act A
contains definition of Ayurvedic Medicines post-1996 and now
there is clear distinction drawn between classical or
pharmacopoeia! Ayurvedic ·Medicines and patent and
proprietary medicines. Once there is a definition provided in
the Tariff Act, that definition alone shall prevail and common B
trade parlance test is not applicable. The common trade
parlance test is to be applied only in the absence of definition;
(iv) that therapeutic and prophylactic uses of DML as
pharmacopoeia! Ayurvedic Med.icine clearly stand established
as the fonnulae has been in ex~t~nce for the past several 100 c
years which is contained ifl.Jhe book 'Ayurved Sar Sangraha'
and the said book is notifled In the First Schedule of the Drugs
and Cosmetics Act, 1940".and the product is accepted as a
ll)edicine und~r the Drugs Act; (v) that entry in Chapter Sub-
heading 3003.31 being more specific entry, it must be
0
preferred over general residuary entry of 3306.10. By applying
general rules of interpretation to the Schedule and the New
Tariff Act, a specific entry must prevail over a general entry; (vi)
that Note 1(d) of Chapter 30 does not cover -"preparations of
Chapter 33 even if they have therapeutic or prophylactic
properties" and for a product to be excluded by this Note 1(d), E
it must be a product covered in Chapter 33 while DML is an
Ayurvedic Medicine specifically covered under Chapter 30; and
(vii) that the product DML does not qualify Note 2 of Chapter
33 as this Court in the case of BPL Pharmaceutical Limited
vs. Collector of Central Excise, Vadodra2 , has held that for a F
product to fall under this Entry, it must: (i) be suitable for use
as goods of Chapter Heading 33.06, (ii) the packaging, with
labels, literature and other indications must indicate that it is
for cosmetic or toilet use, and (iii) irrespective of whether they
are held out to have subsidiary curative or prophylactic G
properties.

19. The learned senior counsel for Baidyanath relied upon
the judgment ofthis Court in the case of Collector of Central
2. 1995 (77) ELT 50') (SC). H
894 SUPREME COURT REPORTS [2009] 5 S.C.R.

A Excise vs. Andhra Sugar Limited3 wherein the rule of
'contemporaneous exposito' has been explained namely that for
construction of a statute the Legislative intent and Executive
instructions may be taken into account to determine the scope
and intent of the entry or statue under consideration. He also
B relied upon decisions of this Court in (1) Oswa/ Agro Mills Ltd.
vs. Collector of Central Excise & Ors." (2) Amrutanjan Ltd. vs.
Collector of Central Excise 5 ; (3) Commissioner of Central
Excise, Calcutta vs. Sharma Chemcia/ Works 6 ; (4)
Commissioner of Central Excise, Nagpur vs. Vicco
c Laboratories7 and (5) Meghdoot Gramodyog Sewa Sansthan
vs. Commissioner of Central Excise, Lucknow.
20. Mr. K. Radhakrishnan, learned senior counsel for the
Department contending contra, by referring to Notes 1 (d) and
2 of Chapter 30 and Note 2 to Chapter 33 and Chapter
D Heading 30.03 and 33.06, submitted that Chapter 30 excludes
preparations of Chapter 33 even if they have therapeutic or
prophylactic properties. He would submit that the word used in
Note 1(d) of Chapter 30 is 'properties' while the word used in
Note 2 of Chapter 30 is 'uses'. These two words, 'properties'
E and 'uses' import different concepts. Mr. K. Radhakrishnan
would submit that the restrictive definition of the word
'medicaments' in Note 2 of Chapter 30 is for the purposes of
Heading 30.03. Chapter Heading 30.03 deals with
medicaments including veterinary medicaments and
F medicaments for therapeutic and prophylactic use.
Medicaments cover the entire Heading 30.03 including every
Sub-heading. Thus, for a product to qualify under 'medicament',
'use' and 'not properties' of the product must be therapeutic or

G 3. 1989 supp. (1) sec 144.
4. 1993 (6) ELT 37 SC.
5. 1995 (77) ELT 500 SC.
6. 2003 (154) ELT 328.
7. 2005 {17) ELT 17 SC.
H 8. 2004 {174) ELT 14 SC.
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 895
BAIDYANATH AYURVED BHAWAN LT.D. [R.M. LODHA, J.]

prophylactic. The common parlance test, the ·learned senior A
counsel would submit, is inbuilt in the definition of 'medicament'
in Note 2 of Chapter 30 as the emphasis is on the word 'uses'.
In the submission of the learned senior counsel for the
Department, common parlance test is well recognized as one
of the twin tests which should be applied to classify a product B
as medicament or cosmetic even post 1996. Without satisfying
the common panance test, the classification cannot be applied.
Mr. K. Radhakrishnan submitted that as to whether the product
described against the Sub-heading 3003.31 is a medicament
or not can be ascertained only after resorting to Note 2 of c
Chapter 30 and the common parlance test inbuilt in it. Rule 1
of the Rules for the interpretation of the Schedule to the New
Tariff Act mandates that classification shall be determined
according to the terms of the Heading and any relative Section
or Chapter Notes, hence Chapter Note 2 dealing with 0
. medicaments cannot be by-passed.

21. The learned senior counsel for the Department would
urge that the classification cannot be finalized by looking at the
description of the goods provided against Sub-heading
3003.31; the description of goods provided against Sub- E ·
heading 3003.31, is not a definition of medicament. According
to him, Sub-heading 3003.31 provides the process of
manufacture of certain medicaments including those used in
Ayurvedic and sale of the same. He would submit that
procedure for manufacture of a product is not a relevant test F
legally recognized for classification of the product.

22. Mr. K. Radhakrishnan, learned senior counsel would
·also submit that the definition under Section 3(a) of Drugs and
Cosmetics Act, 1940 does not relate to Ayurvedic Medicines G
alone and it is materially distinct from Sub-heading 3003.31 of
Chapter 30 as collocation of words "sold under the name as
specified in such book or pharmacopoeia" is conspicuously
absent in Section 3(a).
23. The learned senior counsel for the Department heavily H
896 SUPREME COURT REPORTS [2009] 5 S.C.R. '--..._

A relied upon a three Judge Bench decision of this Court in
Baidyanath 11 wherein this Court held that the product DML is
not an Ayurvedic Medicine. This Court approved common
parlance test applied by the Tribunal. He would submit that the
product is the very same product for which Baidyanath is '
B agitating to get a classification under the heading medicament. ,.(

The product has not undergone any change in their composition,
character and use; merely because there is some difference
in the tariff entries, the character and use of the product will not
change. According to Mr. K. Radhakrishnan, by inclusion of the
c book 'Ayurved Sar Sangraha' in the first schedule of the Drugs
and Cosmetics Act, 1940, the product DML could not be
-
classified as 'medicament'. The senior counsel also submitted
that the earlier decision of this Court relating to very same
product operates as res judicata which is based on three legal
"'
D maxims: (1) Nemo debet bis vexari pro una· et eadem causa -l
(2) Interest republicae ut sit finis /ilium and (3) Res judicata
pro veritate occipitur. He, thus, submitted that the product DML
is classifiable under Heading 33.06 being a tooth powder.

24. We deem it appropriate at this stage to set out relevant
E portions in the Tariff Items, Chapter Notes and the Rules for the -,...
interpretation of the Schedule which have bearing for
consideration before us.

25. Rules for interpretation of the Schedule as stated in -(
F New Tariff Act are as follows: ...
- ,
"1. The titles of Sections and Chapter are provided for
ease of reference only; for legal purposes, classification
shall be determined according to the terms of the headings
and any relative Section or Chapter Notes and, provided
G such headings or Notes do not otherwise require,
· according to the provisions hereinafter contained. +-~

2. (a) ...................................................... ..

H (b) ................................. The classification of goods
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 897
~
j
BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]

consisting of more than one material or substance shall be A
according to the principles contained in rule 3.

3. When an application of sub-rule(b) of rule 2 or for any
other reason, goods are, prima facie, classifiable under
,. two or more headings, classification shall be effected as
B
>-. follows:

(a) The heading which provides the most specific
description shall be preferred to headings providing a
more general description. However, when two or more
headings each refer to part only of the materials or c
• substances contained in mixed or composite goods or to
part only of the items in a set, those headings are to be
regarded as equally specific in relation to those goods,
even if one of them gives a more complete or precise
>
description of the goods. D
j
(b) Mixture, composite goods consisting of different
materials or made up of different components, and goods
put up in sets, which cannot be classified by reference to
(a), shall be classified as if they consisted of the material E
or component which gives them their essential character,
insofar as this criterion is applicable.

(c) When goods cannot be classified by reference to (a)
or (b), they shall be classified under the heading which
occurs last in the numerical order among those which F
equally merit consideration.

4. Goods which cannot be classified. in accordance with
the above rules shall be classified under the heading
appropriate to the goods to which they are most akin. G
5. For legal purposes, the classification of goods in the
·--t
sub-headings of a heading shall be determined according
to the terms of those sub-headings and any related
Chapter Notes and, mutatis mutandis, to the above rules,
' on the understanding that only sub-headings at the same H
898 SUPREME COURT REPORTS [2009) 5 S.C.R. '
' ~

A level are comparable. For the purposes of this rule, the
relative Section Notes also apply, unless the context
otherwise requires.

GENERAL EXPLANATORY NOTES
~

B 1. Where in column (3) of this Schedule, the description -'-
of an article or group of articles under a heading preceded
by "-" the said article or group of articles shall be taken to
be a sub-classification of the article or group of articles
covered by the said heading. Where, however, the
c description of an article or group of articles is preceded
by"--", the said article or group of articles shall be taken
to be a sub-classification of the immediately preceding
•
description of article or group of articles which has "-".
"-
D 2. .............................................................
···········
26. Chapter 30 to the extent, it is relevant for the present
matter, is as follows:
E "CHAPTER 30
PHARMACEUTICAL PRODUCTS

NOTES

1. This Chapter does not cover:
F
(a) .................
(b) .............. ·...
(c) .................
G
(d) Prnparations of Chapter 33 even if they have
therapeutic or prophylactic properties; .i--

(e) .................

H (f) .................
t~
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 899 ·'

~) BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]
(g) ................. A
2. For the purposes of the heading No.30.03,

(i) 'Medicaments' means goods (other than foods or
,. beverages such as dietetic, diabetic or fortified
foods, tonic beverages) not falling within heading B
~
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 c
(b) unmixed products suitable for such uses.

3...............
J.
4. ·············· D
5...............
6 ...............
27. Relevant portions in Chapter 33 is thus: E
CHAPTER 33

ESSENTIAL OILS RESINOIDS; PERFUMERY,
COSMETIC OR TOILET PREPARATIONS
..,..... ). F
NOTES

1...........................................................
2. Heading Nos. 33.03 to 33.08 apply, inter alia, to
products, whether or not mixed (other than aqueous G
distillates and aqueous solutions of essential oils), suitable
._.
·.
for use as goods of these headings and put up in packings
with labels, literature of other indications that they are for
use as cosmetics or toilet preparations or put up in a form
___.,, clearly specialized to such use and includes products H
900 SUPREME COURT REPORTS [2009] 5 S.C.R.
'
A whether or not they contain subsidiary pharmaceutical or
antiseptic constituents, or are held out as having subsidiary
curative or prophylactic value.

3. ··················
B 4 .................. .

Heading Sub- Description of goods Rate
c No. heading
No.
of
duty
,.
(1) (2) (3) (4)

33.06 3306.00 Preparations for 15% •
D oral-ur dental Hygiene,
including dentifrices (for
example toothpaste and
Tooth powder) and
denture Fixative pastes
E and powders"

28. In 1996-97, Chapter 30 to New Tariff Act came to be
amended. Chapter Sub-heading No.3003 now stands as under:

"MEDICAMENTS (INCLUDING VETERINARY
MEDICAMENTS)
-{ .,,.
F
3003.10 -Patent or proprietary medicaments, other than
those medicaments which are exclusively Ayurvedic,
Unani, Siddha, Homoeopathic or Bio-chemic
G 3003.20- Medicaments (other than patent or proprietary)
other than those medicaments which are exclusively
Aurvedic, Unani, Siddha, Homoeopathic or Bio-chemic

-Medicaments, including those used in Ayurvedic, Unani,
H Siddha, Homoeopathic or Bio-chemic systems
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 901
_j
BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]
3003.31 - - Medicaments (including veterinary A
Medicaments) used in Ayurvedic, Unani, Siddha or
Homoeopathic Systems, manufactured exclusively in
accordance with the formulae described in the authoritative
books specified in the First Schedule to the Drugs and
.. Cosmetics Act. 1940 (23 of 1940) or ................. and B
..l sold under the name as specified in such book or pharma-
copoeia;"

29. Baidyanath's product DML has not been treated as
Ayurvedic Medicine to qualify for exemption from payment of
excise duty under Notification No.62/78-CE dated March, 1,
c
1978 by this Court. This Court approved common parlance test
applied by the Tribunal that DML could not be described as a
·<
medicinal preparation and that it could rightly be described as
! a toilet preparation. In Baidyanath 11, it was held thus:
~ D
"The ingredients for the product in question are
stated to be Geru {red earth) to the extent of 70% which
is sated to have cooling quality but the Tribunal noticed that
it is largely used as a filler or colouring agent and is not
described as a medicine in common parlance. After going E
through the various texts, the definition of 'drug' under the
Drugs and Cosmetics Act, 1940 and ayurvedic books as
well as opinion of experts in this behalf, the Tribunal
ultimately came to the conclusion that the product in
question could not be described as a medicinal F
).
preparation and accordingly rejected the claim of the
appellant.
We have heard the learned counsel at some length.
He also invited our attention to the provisions of the Drugs
and Cosmetics Act, 1940, the opinion of the experts, the G
.. ...
~ statements of a few consumers as well as the description
._,, given in certain Ayurvedic books and contended that the
preparation would fall within the relevant entry in the
exemption notification. The Tribunal rightly points out that
~ in interpreting statutes like the Excise Act the primary H
902 SUPREME COURT REPORTS [2009) 5 S.C.R.
,_
A object of which is to raise Department and for which
purpose various products are differently classified, resort
should not be had to the scientific and technical meaning
of the terms and expressions used but to their popular
meaning, that is to say the meaning attached to them by
B those using the product. It is for this reason that the Tribunal ..
came to the conclusion that scientific and technical _I,

meanings would not advance in case of the appellants if
the same runs counter to how the product is underst~od
in popular parlance. That is why the Tribunal observed in
c para 86 of the judgment as under:

"So certificates and affidavits given by the Vaidyas
do not advance the case of Shri Baidyanath
Ayurved Bhawan Limited in the absence of any
evidence on record to show and prove that the
D common man who uses this Dam Manjan daily to
~

clean his teeth considers this Dant Manjan as a
medicine and not a toilet requisite."

It is this line of reasoning with which we are in agreement.
E The Tribunal rejected the claim of the appellant holding that
ordinarily a medicine is prescribed by a medical
practitioner and it is used for a limited time and not every
day unless it is so prescribed to deal with a specific
disease like diabetes. We are, therefore, of the opinion
F that the Tribunal applied the correct principles in concluding ~-
that the product in question was not a medicinal
preparation ('Ayurvedic') and, therefore, the appellant was
not entitled to the benefit of the exemption notification.
Having heard the learned counsel at length and having
G perused the line of reasoning adopted by the Tribunal with
which we are in general agreement, we see no reason to
interfere with the conclusion reached by the Tribunal and,
therefore, we dismiss these appeals, but tnake no order )<-·

as to costs."
H '30. Merely because there is some difference in the tariff )',
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 903
_,, BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]
entries, the product will not change its character. Something A
more is required for changing the classification especially when
the product remains the same. (BPL Pharmaceuticals Ltd.) 9

31. There cannot be justification enough for changing the
.. classification without a change in the nature or a change in the
B
,i
use of the product. The exception being where Tariff Act itself
provides for a statutory definition, obviously, the product has to
be classified as per the definition.

32. The question, therefore, is: does Chapter Sub-heading
3003.31 contain a definition of Ayurvedic Medicine and, if so, c
common parlance test for classifiability of the product, whether
medicament or cosmetic, is inapplicable?

33. Chapter 30 of the New Tariff Act deals with
• pharmaceutical products. Note 2 thereof provides that for the D
purpose of the Heading No.30.03, 'medicaments' means
goods ............ not falling within Heading 30.02 or 30.04 which
are products comprising two or more constituents having been
mixed or compounded together for therapeutic or prophylactic
uses or unmixed products suitable for such uses. Chapter
E
Heading 30.03 is in respect of medicaments. Sub-heading
3003.10 refers to patent or proprietary medicaments other than
those which are exclusively Ayurvedic, Unani, Siddha,
Homoeopathic or Bio-chemic. Sub-heading 3003.20 refers to.
medicaments including those used in Ayurvedic, Unani, Sidha,
~
F
Homoeopathic or Bio-chemic system. Inter alia Sub-heading
3303.31 refers to medicaments used in Ayurvedic system of
medicine exclusively in accordance with the formulae described
in the authoritative books specified in the First Schedule to the
Drugs and Cosmetics Act, 1940 and sold under the name as
specified. G

34. Does Chapter Sub-heading 3003.31 contain specific
-...>!
definition of Ayurvedic Medicine? We do not think so. What is
provided in column 3 of Schedule is description of goods
~ 9. 1995 Supp.(3) sec 1. H
904 SUPREME COURT REPORTS [2009] 5 S.C.R.

'
A against sub-heading 3003.31. We are afraid description of
goods cannot be treated as definition. There is merit in the
contention of the learned senior counsel for the Department that
Chapter Sub-heading 3003.31 provides process for
manufacture of certain medicaments including those used in
B Ayurvedic system and sale of the same; it is not a definition .
clause. Classification of a product, interpretative Rule 1 of rules ).,

for interpretation of the Schedule says, is to be determined
according to the terms of the heading and any relative Section
or Chapter Notes and provided such headings or Notes do not
c otherwise require. Chapter Sub-heading 3003.31 is an entry
double dash(-) occurring under the single dash (-) heading for
medicament including those in Ayurvedic Systems. As per
general explanatory Note 1 appended to rules for interpretation,
single dash (-) indicates the said article or group of articles to
D be a sub-classification of the article or group of articles covered •
by the said heading and double dash (--) indicates, the said
article or group of articles to be a sub-classification of the
immediately preceding description of article or group of articles
which has single dash (-). It is, thus, clear that Chapter Heading
30.03 would cover every Sub-heading as well. Therefore, to find
E
out whether the product described against Sub-heading
3003.31 is a medicament or not, aid to Note 2 of Chapter 30
for the purposes of Heading 30.03 is necessarily called in. Note
2 to Chapter 30 defines medicaments for the purposes of
Heading 30.03 as products comprising two or more
F constituents which have been mixed or compounded together .;;
for therapeutic or prophylactic uses or unmixed products
suitable for such uses. The use of expression "uses" in Note 2
is not without significance and is surely distinct from the
expression "properties" used in Note 1(d) of Chapter 30. The
G term "uses" brings within its comprehension, the act of user and,
thus, there is merit in the submission of the learned senior
counsel for the Department that common parlance test is inbuilt \<- ,
in Chapter Heading 30.03.

H 35. As a matter of fact, this Court has consistently applied
....,_
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 905
_J
BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]

common parlance test as one of the well recognized tests to· A
•I
find out whether the product falls under Chapter 30 or Chapter
33. In a recent decis[on in Puma Ayurvedic Herbal (P) Ltd. vs.
Commissioner, Central Excise, Nagpur 10 this Court observed
.. that in order to determine whether a product is a cosmetic or
)..
medicament, a twin test (common parlance test being one of B
them) has found favour with the courts. This is what this Court
observed:

".... In order to determine whether a product is a cosmetic
or a medicament a twin test has find favour with the courts.
The test has approval of this Court also vide CC£ v.
c
Richardson Hindustan {(2004) 9 SCC 156}. There is no
dispute about this as even the Department accepts that
the test is determinative for the issue involved. The tests
).
are:
D
\-
I. Whether the item is commonly understood as
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 E
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
-i_
very material . One may buy any of the ordinary F
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. G
>.,,,./
II. Are the ingredients used in the product mentioned
in the authoritative textbooks on Ayurveda ?"
36. In Puma Ayurvedic Herbal (P) Ltd., the question that
1o. (2006) 3 sec 266. H
906 SUPREME COURT REPORTS [2009] 5 S.C.R.
,A~

A arose for consideration before this Court was whether the
products manufactured by the appellant therein were covered
under the category of medicaments or cosmetics. The following ·-
products were under consideration: 1. Puma neem facial pack
(Neemal), 2. Puma anti-pimple herbal powder (Pimplex), 3.
B Puma herbal facial pack (Herbaucare), 4. Puma herbal remedy ..
for facial blemishes, 5. Puma herbal massage oil, 6. Puma J.
herbal massage oil for women, 7. Puma hair tonic powder
(Sukeshi), 8. Puma scalp tonic powder (Scalpton), 9. Puma
anti-dandruff oil (Dandika), 10. Puma shishu rakshan tel, 11.
c Puma neem tulsi. This Court referred to various decisions of
this Court and held:

"From the above judgments it follows that the law is
settled on the twin test for determination of classification
of a product. We have already found that the twin test is •
D satisfied in the present case regarding most of the items
under consideration."

37. Applying twin test for determination of classification of
products (including common parlance test), this Court in Puma
E Ayurvedic Herbal (P) Ltd. held that items 1,2,3,4,7,9, 10 & 11
were medicaments while items 5,6 & 8 were liable to be
classified as cosmetics under Chapter sub-heading 33.04.

38. We endorse the view that in order to determine whether
a product is covered by 'cosmetics' or 'medicaments' or in other
F words whether a product falls under Chapter 30 or Chapter. 33 A

: twin test noticed in Puma Ayurvedic Herbal (P) Ltd., continue
to be relevant. The primary object of the Excise Act is to raise
revenue for which various products are differently classified in
New Tariff Act. Resort should, in the circumstances, be had to
G popular meaning and understanding attached to such products
by those using the product and not to be had to the scientific
and technical meaning of the terms and expressions used. The '"--,
approach of the consumer or user towards the product, thus,
assumes significance. What is important to be seen is how the
H consumer looks at a product and what is his perception in
__;, COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 907
BAIDYANATHAYURVED BHAWAN LTD. [R.M. LODHA, J.]
respect of such product. The user's understanding is a strong A
factor in determination of classification of the products. We find
it difficult to accept the contention of the learned senior counsel
for Baidyanath that because DML is manufactured exclusively
,. in accordance with the formulae described in Ayurveda Sar
~. Sangrah which is authoritative text on Ayurvedic system of B
treatment and is notified in the First Schedule to the Drugs and
Cosmetics Act, 1940 and the said product is sold under the
name 'Dant Manjan Lal' which is the name specified for the said
product in Ayurveda Sar Sangrah, the common parlance test
is not applicable. As a matter of fact, this contention is based c
on misplaced assumption that Chapter Sub-heading 3003.31
by itself provides the definition of Ayurvedic Medicine and there
is no requirement to look beyond.
;.
39. West Regional Bench of the Tribunal in its order dated
} 13.12.2000 which is subject matter of Civil Appeal 4048/2001 D
observed thus :

"The Drugs and Cosmetic Act, 1940 provides for a
licence to be obtained for manufacture of Ayurvedic,
Sidha, Homoeopathic and Unani medicines. Technical E
Advisory Board to advise Central and State Government
on technical matters. Among the members of this Board
are persons well versed in ayurvedic medicines, including
teacher in Dravya Guna and Kalplana and a practitioner
1. in ayurvedic medicine. It also provides for a Ayurvedic, F
Sidha, and Unani Drugs Consultant Committee. The
manufacture of ayurvedic medicament is subject to
· supervision and checks by officers appointed to carry out
the provisions under the Drugs and Cosmetic Act, 1940.

Section 3 (a) of the Drugs and Cosmetics Act, 1940 G
-...,_.:..{ defines "Ayurvedic, Sidha or Unani Drug" as follows:

Ayurvedic, Sidha or Unani drug" includes all medicines
~ intended for internal or external use for or in the diagnosis,
treatment, mitigation or prevention of disease or disorder H
908 SUPREME~URT REPORTS [2009] 5 S.C.R.
"'-'
A inhuman beings or animals and manufactured exclusively
in accordance with the formulae described in the ('

authoritative books of "Ayurvedic, Sidha or Unani Tibb
system of medicine, specified in the First Schedule."

B
A comparison of this definition and the entry now •
contained in heading 3003.30 of the Tariff shows that the J_

two are virtually identical for the purpose of both the Drugs
and Cosmetics Act and the Tariff, after its amendment, the
medicament which is made exclusively in accordance with
the formulae described in the First Schedule to the Act is
c to be considered as ayurvedic medicament.

The effect of insertion of the new entry in the tariff is
that to bring it on a par with the Drugs and Cosmetics Act,
1940. The term "ayurvedic medicament" in the tariff will
have the same meaning as the meaning in the Drugs and "
D
Cosmetics Act. Therefore, if the product under l
consideration conforms to the requirements specified in
that Act and the tariff, it will be entitled to be so classified.
There would be no requirement that the Central Excise
E authorities must independently test it for its efficacy as
medicament by apply the provisions of Note (2) to the
Chapter.

It must be emphasized that these considerations
were not present before the Supreme Court which passed .r
F its orders on the classification of Dant Manjan Lal. The
Tribunal, and on appeal the Supreme Court, was
concerned with the classification of the goods under Item
14E of the earlier Central Excise Tariff. The Tribunal has
therefore rightly applied the test as to whether the product
G was a medicament, as is normally understood by persons
in the trade, was shown to possess the therapeutic or
)'-_A
prophylactic properties, was demonstrated as to be
medicament by being prescribed for a limited period, for
'""""'
a specific disease or disorder. By virtue of the amendment
H made to the tariff, these considerations cannot be gone
• .J COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 909
BAIDYANATH AYURVED BHAWAN LTD. [R.M. LODHA, J.]

into. The judgment of the Supreme Court therefore cannot A
be a deciding factor in determining its classification under
the heading as it now stands. This in fact is the view that
has been expressed by the Commissioner (Appeal), Patna,
,.
whose order was cited by the advocate for the appellant.
).
We therefore hold that the product was rightly classifiable B
under heading 30.03 as claimed by the appellant."

.• We do not agree. The approach of the West Regional Bench
is fallacious in what we have indicated above as it overlooks
and ignores common parlance test which is one of the well
recognized tests to determine whether the product is
c
classifiable as medicament or cosmetic and that has been
consistently followed by this Court including with regard to this
~ very product. It also overlooks the well-settled legal position that
~·
without a change in the nature or a change in the use of the
.·; product and in the absence of a statutory definition, the product D
) will not change its character. The product DML remains the
same in its composition, character and uses. We have already
' held above that Sub-heading 3003.31 does not define
Ayurvedic Medicine and, therefore, there cannot be any
E
justification enough for changing the classification of the product
DML which has not been held to be Ayurvedic Medicine by this
Court.

~ 40. The learned senior counsel for Baidyanath heavily
relied upon the statement of the Finance Minister during the F
parliamentary debate on the question of levy of excise duty on
Ayurvedic medicines. In the entire debate there is no reference
to the product DML with which we are concerned. The part of
statement of Finance Minister reads,' ........... there is no excise
duty on Ayurvedic Medicines manufactured according to the G
Ayurvedic formulae, some medicines appears to be Ayurvedic
. '--'"\ medicines.' The Finance Minister also stated, '........ he must
raise the dispute on that. It will be decided by the Collector. It
'· will be decided by the appeliate authority. There is a method
to decide it. ......... ' VVe are afraid the statement made by the
H
910 SUPREME COURT REPORTS [2009] 5 S.C.R. ....
A Finance Minister in the Parliament does not advance the case
of the assessee at all insofaras classification of DML is
concerned as method to decide classification has rightly been
observed to be within domain of the authorities.
,. •
B 41. True it is that Section 3(a) of the Drugs and Cosmetics
A
Act, 1940 defines 'Ayurvedic, Sidha or Unani Drug' but that
definition is not necessary to be imported in New Tariff Act. The
definition of one statute having different object, purpose and
scheme cannot be applied mechanically to another statute. As
stated above, the object of Excise Act is to raise revenue for
c which various products are differently classified in New Tariff
Act.

42. There is no doubt that a specific entry must prevail over
a general entry. This is reflected from Rule 3(a) of the general ~

D Rules of interpretation that states that heading which provides -l
the most specific description shall be preferred to headings
providing a more general description. DML is a tooth powder I..

which has not been held to be Ayurvedic Medicine in common
~
parlance in Baidyanathl 1 • We have already observed that
E common parlance test continues to be one of the determinative
tests for classification of a product whether medicament or
cosmetic. There being no change in the nature, character and
uses of DML, it has to be held to be a tooth powder - as held
in Baidyanathl1. DML is used routinely for dental hygiene. Since
F
F tooth powder is specifically covered by Chapter Sub-heading
3306, it has to be classified thereunder. By virtue of Chapter
Note 1(d) of Chapter 30 even if the product DML has some
therapeutic or medicinal properties, the product stands
excluded from Chapter 30.
G 43. The learned senior counsel for Baidyanath relied upon
the judgment of this Court in Vicco Laboratories to show that >'---~

in Baidyanath 11, no tests for classification were laid down. First,
in Baidyanath 11, common parlance test applied by the Tribunal _,..
has been approved. Second, and more importantly, with regard
H to the very product (DML}, this Court held that it could not be
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 911
~-J BAIDYANATHAYURVED BHAWAN LTD . .[R.M. LODHA, J.]
'
classified as Ayurvedic Medicine and rather the product is toilet A
requisite. Baidyanath 11, no doubt relates to old Tariff period
__,
-I i.e. prior to enactment of new Tariff Act but since the product in
its composition, character and uses continues to be the same,
...\I even after insertion of new sub-heading 3301.30, we have
~ already held that change in classification is not justified as B
.A.. common parlance test continues to be relevant for classification .
Vicco Laboratories is of no help to the assessee.

44. In what we have already discussed above, it is not
necessary to refer to other decisions cited by the learned
Senior Counsel for Baidyanath. Be it noted here that Mr. C.A.
c
Sundaram, learned Senior Counsel submitted before us that
matters should be decided by this Court as raising neat
question of law about classification of product DML on the
available material and any further inquiry or remand was
.J D
unnecessary.
~
45. Before we part with the case, we may address to the
plea of res judicata raised by the learned Senior Counsel for
the Department. Mr. K. Radhakrishnan pressed into service few
legal maxims in this regard. It is true that maxim Nemo debet E
bis vexari pro una et eadem causa is founded on principle of
private justice as it states that no man ought to be twice put to
trouble if it appear to the court that it is for one and the same
cause. The maxim Interest republicae sit finis litium concerns
the State that law suits be not protracted. This maxim is based F
-\
on public policy. In our opinion, these maxims cannot be applied
as a rule of thumb in the taxation matters. In the matters of
classification of goods, the principles that have been followed
, by the courts - which we endorse - are that there may not be
: justification for changing the classification without a change in
G
the nature or a change in the use of the product; something
more is required for changing the classification especially when
..t
·~ the product remains the same. Earlier decision on an issue inter
parties is a cogent factor in the determination of the same
issue. The applicability of maxim Res judicata pro veritate
H
\
912 SUPREME COURT REPORTS [2009] 5 S.C.R.

A occipitur in the matters of classification of goods has to be
seen in that perspective. The interpretation given by this Court
in Baidyanath 11 with regard to this product has been
considered and applied by us after amendment because
Chapter Sub-heading 3003.31 does not contain definition of
B Ayurvedic Medicine and the product DML in nature, character •
and uses remains the same as it was prior to amendment.

46. As a result of the foregoing discussion, appeals of
Baidyanath must fail and are dismissed. The Department's
appeals are allowed. The parties shall bear their own costs.
c
D.G. Appeals disposed of.

..
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