M/S. ICPA HEALTH PRODUCTS (P) LTD.versusCOMMISSIONER OF CENTRAL EXCISE, VADODARA

                 M/S. ICPA HEALTH PRODUCTS (P) LTD.                                A
                                       v.
          COMMISSIONER OF CENTRAL EXCISE, VADODARA

                               APRIL 20, 2004

                   [S.N. VARIA VA AND H.K. SEMA, JJ.]


     Central Excise Tariff Act, 1985; Tariff Item Nos. 38.08 and 3003.10;
Note 2(1) to Chapter 30 and Note 1(c) to Chapter 38; Notification No. 28188-
CE dated March 1, 1988:
                                                                                   c
      Classification-Principles of-Tariff Item 38.08 or 3003.10-Hexiprep,
Hexiscrub (Surgiscrub) and Haxiaque-Revenue held the products classifiable
under Tariff item No. 38.08-Upheld by Tribunal-On appeal, Held: Since
the products have therapeutic properties and prophylactic uses, they are
medicament as defined under Chapter 30-Products would be classifiable D
under Tariff Item No. 3003. l 0.

        Words and Phrases:

        'Prophylactic '-Meaning of in the context of Central Excise Tariff Act,
1985.                                                                              :E,

      The question which arose for consideration in these appeals was as
to whether the products Hexiprep, Hexiscrub (Surgiscrub) and Haxiaque
would be classifiable under Tariff Item No. 38.08 as held by the Revenue
and upheld by the Tribunal (CEGAT) or under Tariff Item No. 3003.10
of the Central Excise Tariff Act as contended by the assessee.                     F
        Allowing the appeals, the Court

     HELD: The labels of the three products describe them as "superior
surgical microbicidal solution". Hexiprep is used to paint the skin as
required to disinfect the skin before surgery. It is for rapid skin disinfection   G'
prior to surgery. Hexiaque is used as a skin disinfectant to paint the skin
before surgery and as a wound disinfectant. It is described as a cleanser
and is used for cleansing of wounds and abrasions and minor cuts.
Hexiscrub is for use on hands and forearms of Surgeons for rapid hand

                                      409                                          H
    410                      SUPREME COURT REPORTS (2004) SUPP. I S.C.R.

A disinfection prior to surgery. The products therefore have prophylactic
     uses. If a product comprises of two or more constituents which have been
     mixed together for therapeutic or prophylactic uses, then it would be
     medicament. The Appellants' products were examined by the Chemical
     Examiner who has opined that these products have therapeutic properties.
B   'Hence the products cannot be classified under Tariff Item No. 38.08 but
     will be classifiable under Tariff Item No. 3003.10. [411-B; 412-CJ

          Oxford Dictionary, 9th Edition, referred to.

          CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4766-4768
C of 1998.
         From the Judgment and Order dated 1.5.98 of the Central Excise,
    Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. Nos.
    320-22/98-C in A. Nos. E-770 of 1992-C and E/38-39 of 1995-C

          Alok Yadav for V. Balachandran for the Appellant.
D
         Soli J. Sorabji, Attorney General for India, Ms. Vibha Makhija, B.
    Krishna Prasad for the Respondent.

          The Judgment of the Court was delivered by

E        S.N. VARIA VA, J. These Appeals are against the Judgment of the
    Customs, Excise and Gold (Control) Appellate Tribunal (for short CEGAT)
    dated lst May, 1998.

          Briefly stated the facts are as follows:

F          The Appellants manufacture, amongst other things, Hexiprep, Hexiscrub
    (Surgiscrub) and Haxiaque. They classified these items under Tariff Item
    3003.10 and paid duty under Notification No. 29/88-CE dated lst March,
    1988. Eight show-cause-notices were issued to them calling upon them to
    show cause as to why the product; should not be classified under Tariff Item
G   38.08. The Adjudicating Authority then upheld the classification as proposed
    in the show-cause-notices. The Appeal filed by .the Appellants to CEGAT has
    been dismissed by the· impugned Judgment.

         The three products of the Appellants were examined by the Chemical
    Examiner who opined that they contained chlorhexdine gluconate solution
H   BP, which had therapeutic properties. The Chemical Examiner also opined
         ICPAHEALTHPRODUCTS(P)LTD.v. C.C.E.[VARIAVA, J.]                      411

that they were used as disinfectants and were thus covered by Tariff Entry            A
38.08.

      The labels of the three products describe them as "superior surgical
microbicidal solution". It is admitted that Hexiprep is used to paint the skin
as required to disinfect the skin before surgery. It is for rapid skin disinfection
prior to surgery. Hexiaque is used as a skin disinfectant to paint the skin           B
before surgery and as a wound disinfectant. It is described as a cleanser and
is used for cleansing of wounds and abrasions and minor cuts. Hexiscrub is
for use on hands and forearms of Surgeons for rapid hand disinfection prior
to surgery.

      At this stage, the two Tariff Items may be set out. Tariff Item 3003.10         C
reads as follows:

       "3003.10 - Patent or proprietary medicaments, other than those
                medicaments which are exclusively Ayurvedic, Unani,
                Siddha, Homoeopathic or Bio-chemic."
                                                                                      D
       Tariff Item No. 38.08 reads as follows:

       "38.08 -   Insecticides, rodenticides, fungicides, herbicides, anti-
                  sprouting products and plant-growth regulators, disinfectants
                  and similar products."
                                                                                      E
CEGAT has held that the Appellants' products are disinfectants and are
therefore covered under Tariff Item 38.08. However, Chapter Note I(c) of
Chapter 38, in which Tariff Item 38.08 falls, indicates that the Chapter does
not apply to "Medicaments". Chapter Note 2(i) to Chapter 30 defines
"Medicaments" as follows:
                                                                                      F
        "'Medicaments' means goods (other than foods or beverages such as
        dietetic, diabetic or fortified foods, tonic beverages) not falling within
        heading 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               G
           uses; or

       (b) unmixed products suitable for such uses put up in measured
           doses or in packings for retail sale or for use in hospitals."

Thus, if a product comprises of two or more constituents which have been              H
    412                      SUPREME COURT REPORTS [2004] SUPP. I S.C.R.

A   mixed together for therapeutic or prophylactic uses, then it would be ii
    medicament. As stated above, the Appellants' products were examint:d by the
    Chemical Examiner who has opined that these products have th".erapeutic
    properties. Also admittedly these products are used for disinfecting the skin
    prior to surgery. As per Concise Oxford Dictionary, 9th Edition, the term
B   "prophylactic" would mean "intending to prevent diseases, a preventive
    medicine or course of action". It is clear that the Appella_nts' products are
    used as a cleanser for cleaning of wounds and abrasions and minor cuts and
    to disinfect the skin prior to surgery. They therefore also have prophylactic
    uses. As the products have therapeutic properties and prophylactic uses they
    are Medicament falling under Chapter 30. As they fall under Chapter 30 by
C   virtue of Note l(c) to Chapter 38, they do not fall within Chapter 38. It will
    therefore have to be held that the products cannot be classified under Tariff
    Item 38.08. In this view of the matter, the impugned Judgment cannot be
    sustained and is accordingly set aside. It is held that the Appellants' products
    will be classifiable under Tariff Item 3003.10.

D            The Appeals are accordingly allowed. There will be no order as to
    costs.

                                                                 Appeals allowed.