1995 JTR(SC) 483
1995 77 ELT 500 ; 1996 9 SCC 413 ; 1995 KHC 3291
SUPREME COURT OF INDIA
A.M. Ahmadi, C.J.I., K S Paripoornan, S P Bharucha, JJ.
AMRUTANJAN LTD., APPELLANT;
VERSUS
COLLECTOR OF CENTRAL EXCISE, RESPONDENT.
Civil Appeals Nos. 3681-3682 of 1991, decided on March 30, 1995.
A product is not disqualified from being classified as an Ayurvedic medicine simply because its ingredients are also recognized in western science or are refined to pharmaceutical quality, as the same substance can be used in both systems of medicine.
Act
Referred
:Central Excise Tariff Act, 1985
(A) Central Excise Tariff Act, 1985 - Tariff heading 3003.30 - Classification of product as Ayurvedic medicament - Nil rate of duty - Use of ingredients known to both Ayurvedic and western sciences - Pharmaceutical quality (IP) does not render a product non-Ayurvedic - The fact that an article is refined for use in medicament and known to both systems of science does not disqualify it from being classified as an Ayurvedic product. (Para 1)
Facts of the case:
The appellant sought classification of a pain balm as an Ayurvedic medicament to avail of a nil rate of duty. The authorities and the Tribunal rejected this classification, contending that the main ingredients were synthetic and that the appellant had used Ayurvedic nomenclature on invoices and labels to evade excise duty.
Findings of Court:
The Tribunal erred in considering the ingredients synthetic. The suffix 'IP' after the ingredients only demonstrates that they are of pharmaceutical quality, which is necessary for medicinal preparations. Since the ingredients are recognized in both Ayurvedic and western sciences, their use in the making of the balm does not make the product non-Ayurvedic.
Issues: Whether a product containing ingredients recognized by both Ayurvedic and western sciences, and refined to pharmaceutical quality, can be classified as an Ayurvedic medicine.
Ratio Decidendi: An article can have uses in both Ayurveda and western sciences and be known by different names; the use of pharmaceutical grade ingredients known to Ayurveda does not disqualify a product from being classified as an Ayurvedic medicine.
Result: Appeals allowed.
Facts of the case:
The appellant sought classification of a pain balm as an Ayurvedic medicament to avail of a nil rate of duty. The authorities and the Tribunal rejected this classification, contending that the main ingredients were synthetic and that the appellant had used Ayurvedic nomenclature on invoices and labels to evade excise duty.
Findings of Court:
The Tribunal erred in considering the ingredients synthetic. The suffix 'IP' after the ingredients only demonstrates that they are of pharmaceutical quality, which is necessary for medicinal preparations. Since the ingredients are recognized in both Ayurvedic and western sciences, their use in the making of the balm does not make the product non-Ayurvedic.
Issues: Whether a product containing ingredients recognized by both Ayurvedic and western sciences, and refined to pharmaceutical quality, can be classified as an Ayurvedic medicine.
Ratio Decidendi: An article can have uses in both Ayurveda and western sciences and be known by different names; the use of pharmaceutical grade ingredients known to Ayurveda does not disqualify a product from being classified as an Ayurvedic medicine.
Result: Appeals allowed.
JUDGMENT
1. We are concerned in this appeal against the decision of the Customs, Excise and Gold (Control) Appellate Tribunal only with the appellants product known as "Amrutanjan Pain Balm Ayurvedic". The appellant sought classification of the same on the basis that it was an Ayurvedic medicament under tariff heading 3003.30 of the Central Excise Tariff Act, 1985 and attracted nil rate of duty. The authorities below as also the Tribunal did not accept this classification. The Tribunal, in the order under appeal, upheld the contention of the Excise authorities that the balm was not an Ayurvedic medicine because its main ingredients were Menthol IF, Camphor IF, Turpentine IP and Methyl Salicylate IF, which were of a synthetic nature. The contention of the appellant that the same ingredients had an Ayurvedic nomenclature as could be found in authoritative text-books was rejected because, according to the Tribunal, Ayurvedic science recognises only the use of natural extracts from medicinal plants and these could not be substituted by modern chemical ingredients. The Tribunal said that the appellant had imported synthetic grade IP chemicals and had, with the intention of evading liability to excise duty, asked the suppliers to change the names upon invoices and labels to Ayurvedic nomenclatures. Thus, methyl salicylate was changed to "pudina ka phool", dementholised oil to "pudina ka tel", thymol and turpentine to "ajwan ka phool" and "turpentine ka tel" and methyl salicylate to "winter green tel". The Tribunal would appear to have overlooked the fact that the same article can have a use both in Ayurveda and in the western sciences and be known by different names. The letters IP after the article concerned only demonstrate that it is of pharmaceutical quality, as it ought to be if it is to be used in a medicinal preparation. The Tribunal was in error in considering that the articles aforestated were synthetic in nature. Having regard to the evidence, we are inclined to hold that the articles afore-mentioned were articles known both to Ayurvedic and western sciences and were refined for use in medicament-Since they were known to Ayurveda, their use in the making of the balm did not, by itself, make the balm a non-Ayurvedic product.
2. Accordingly, the appeals are allowed. The judgment under appeal is set aside. It is held that the appellants balm is an Ayurvedic medicine entitled to be classified as such.