(a) products comprising two or more constituents which have been mixed or compounded together for therapeutic and prophylactic uses; or

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

Note 1(d) provides that preparations of Chapter 33 even if they have therapeutic or prophylactic properties would not be covered by Chapter 30. Therefore, in the present case we have to examine whether the product of the appellant is an ayurvedic medicament and secondly even it has therapeutic or prophylactic properties whether it can be treated as a preparation coming under Chapter 33.

16. If we look into the provisions contained under the Tariff Act during the year 1992-93 it can be seen that 15% duty was levied for 'ayurvedic medicaments'. The relevant Entry reads as follows:-

"3003.30 "Medicaments, including those used in Ayurvedic, Unani, Siddha, Homoeopethic or Bio-Chemic systems".

The goods coming under 3003.30 including Ayurvedic medicines were enjoying total exemption from duty under Notification No. 32/89-CE dated 1.3.89. For the year 1993-94 also the same position continued and the exemption Notification No. 9/93 was dated 28/2/93. For the year 1994-95 the Tariff sub-heading 3003.30 continued to be the same. But in exemption Notification No. 75/94 dated 29.3.94 exemption was not granted to all categories of medicaments under sub-heading 3003.30. It was categorised into three. While in respect of categories (1) and (2) rate of duty was 'nil' an ad valorem duty at 10% was levied in respect of category (3) within which category, according to the appellant, its product would come. The relevant portion of the Exemption Notification No. 75/94 dated 29.3.94 reads as follows:-

"3. 3003.30 (i) Medicaments (including veterinary medicaments) used in Ayurvedic, Unani Tibb, Sidha 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 Homoeopathic Pharmacopoeia of India or the United States of America, or the United Kingdom or the German Homoeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopoeia.

(ii) Medicaments (including veterinary medicaments) used in Bio-Chemic system and not having a brand name.

(iii) Others"

17. The change thus brought about by withdrawing total exemption for certain categories of medicaments has been explained in the Notes to the Finance Bill 1994 explaining important changes made in Central Excise duty. Clause 16.7 under Chapter 30 reads as follows:-

"16.7 Exemption from excise duty on all patent and proprietary medicines of homoeopathic, unani, siddha, ayurvedic and biochemics withdrawn and a duty of 10% is being prescribed. Unbranded products will, however, continue to be exempted (Notification No. 80/94-CE refers) PBR No./94 (patent and proprietary medicines of homoeopathic, unani, siddha, ayurvedic and biochemics)

The units producing such branded medicines may be brought under the excise control, subject to SSI benefits."

18. The above would make it clear that a differentiation was made between ayurvedic medicaments 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) sold under name as specified under such books and ayurvedic medicaments manufactured otherwise, in the matter of granting exemption from duty. From 1996-97 onwards the exemption thus granted under the different notifications referred above was brought under the Tariff Act itself by providing three different Headings 3003.31, 3003.32 and 3003.39 which read as follows:-

"3003.31 - 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 Homoeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homoeopathic. Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopoeia.

3003.32 - Medicaments (including veterinary medicaments) used in bio-chemic system and not bearing a brand name.

3003.39 - Other"

19. In this connection we may also refer to certain provisions in the Drugs and Cosmetics Act, 1940 which have relevance to the issue raised in this case. Term 'Ayurvedic, Siddha or Unani drug' is defined under Section 3 (a) of the above Act as follows:-

"3 (a) `Ayurvedic, Siddha 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 in human beings or animals, and manufactured) exclusively in accordance with the formulae described in the authoritative books of (Ayurvedic, Siddha and Unani Tibb systems of medicine) specified in the First Schedule."

Clause (h) defines the term 'patent or proprietary medicine' which reads as follows:-

"(h) `patent or proprietary medicine' means -

(i) in relation to Ayurvedic, Siddha or Unani Tibb systems of medicine all formulations containing only such ingredients mentioned in the formulae described in the authoritative books of Ayurvedic, Siddha or Unani Tibb systems of medicine specified in the First Schedule, but does not include a medicine which is administered by parenteral route and also a formulation included in the authoritative books as specified in clause (a)."

20. Coming to Chapter 33 the relevant provisions to be noted are Chapter Notes 2 and 6 which read as follows:-

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

6. Heading No. 33.05 applies, inter alia, to the following products; brilliantines, perfumed hair oils, hair lotions, pomades and creams, hair dyes (in whatever form), shampoos, whether or not containing soap or organic surface active agents.

21. In 2000 (125) ELT 765 (T), Delhi Bench of the Tribunal came to the conclusion that the petitioner's product is not an ayurvedic medicine, mainly for two reasons. It was found that the product was not manufactured in accordance with any formulae prescribed in any recognised text on Ayurveda. It was also noted that the product by name is not described in any authoritative texts of Ayurveda system of treatment. The Bench referred to Naturelle Health Products Pvt. Ltd. Vs. CCE, Hyderabad, 1996 (12) RLT 96=1995 (81) ELT 578 (T) in support of its finding that a product to be treated as an ayurvedic medicine should not only contain ingredients prescribed in recognised Ayurvedic Text but also must be manufactured in accordance with the formulae prescribed therein. Support was also sought from another decision of the Tribunal in B.K. Products Vs. Ghrit Kumari Tel (sic- CCE, Patna) 1998 (28) RLT 837=1998 (104) ELT 430. Reliance was also placed on CCE Vs. Warner Hindustan Ltd. 1989 (42) ELT 33. The decisions relied on by the respondents therein namely, Collector Vs. Maneesh Pharmaceuticals Pvt. Ltd. was distinguished by the Bench and also noted that Naturelle Health Products Pvt. Ltd. was not brought to the notice of the Bench which decided Maneesh Pharmaceuticals' case. Decision of the Allahabad High Court in Balaji Agency Vs. CST, 1994 (19) STJ 150 was also distinguished by the Bench for the reason that the case arose under the provisions of the Sales Tax Act. The Bench after finding that the product cannot come under Chapter 30, proceeded on the basis that there is no dispute that it is perfumed oil and it is used on the hair. Therefore, even if it has some subsidiary curative or prophylactic value it would fall for classification under sub-heading 3305.10. It was then held that the product is not eligible for exemption under Notification No. 75/94.

22. In the Order passed by the Calcutta Bench in Pandit D.P. Sharma Vs. CCE Calcutta [refer 2000 (41)RLT 443 (CEGAT)] we find that there is an elaborate consideration of the order dated 2.4.96 passed by the Assistant Commissioner classifying the goods as Ayurvedic medicament falling under sub-heading 3003.30 and approving the list accordingly. The Tribunal found that the Assistant Commissioner relied on substantial materials like drug licence issued by the Drug controller; letter issued by the Superintendent of Ayurvedic Department, Sir Sunderlal Hospital, Banaras which confirmed the product to be Ayurvedic Medicine, study report of Institute of Post Graduate Education & Research in Ayurveda, Calcutta on Himtaj Oil which reveals that it is an Ayurvedic product which is found to have 'pain relief' effect in headache & migrain and also provides relief against dandruff, the Range Officer's report from which it is seen that market enquiry was conducted with dealers, wholesale sellers, retailers & customers as well as Drug Houses 'Chemist & Drugist' and all the corners responded that the impugned product has been treated as Ayurvedic Medicaments, retesting Report of Chief Chemist, New Delhi in coming to the conclusion that the goods is an Ayurvedic medicament. This order was reversed by the Commissioner (Appeals) by a criptic order which was under challenge before the Calcutta Bench on examining the materials placed before it the Bench agreed with the view taken by the Assistant Commissioner. It was noted that the Commissioner (Appeals) had not entered any finding that the perfume had been added to the oil by way of positive and deliberate act so as to bring under 'perfumed hair oil'. It placed reliance on the decision of the Allahabad High Court in 1994 (19) STJ 150. The ratio in the decision of the Madras High Court in TSR & Company, 1985 (22) 701 (Mad.) was relied on in support of the view that in order to describe an oil as perfumed oil, perfume must be added to it by way of positive and deliberate act. The same view taken by the Bombay High Court in Commissioner of Sales Tax Maharashtra State, Bombay Vs. Gordhardan 1983 (52) STC 381 (Bombay) was also referred by the Bench. The Bench further referred to the Circular No. 196/30/96-CX. dated 3.4.96 issued by the Central Board of Excise & Customs extending the benefit of the exemption under Notification No. 75/94-CE to Ayurvedic medicaments prepared by the formulae described in the authoritative books. The Bench noted the clear observation in the Report of the Chief Chemist that the ingredients used in the product have been mentioned in the ayurvedic books which factor is corroborated by issuing of a licence to the appellant by the Drug Controller. The Bench took into consideration the other materials produced before it, namely, the authoritative reports based on study of the appellant's product. Ultimately the Calcutta Bench agreed with the view taken by the Assistant Commissioner that 'Himtaj Oil' is an Ayurvedic medicament classified under 3003.30 and not under 3303.10 as a 'perfumed hair oil'.

23. The appeal from which the present reference arose is against the order of the Commissioner of Central Excise, Allahabad dated 31.10.2000. The period involved is from 17.8.1992 to September 1995. A reference to the impugned order would show that M/s. Pandit D.P. Sharma, West Bengal is a sister concern of the appellant herein. Both are engaged in the manufacture of 'Himtaj Oil'. The product manufactured by the Varanasi Unit and the West Bengal Unit bore the same Trade Mark Registration and copy right Registration. They are sold in the market in identical packing bearing the photograph of Pt. Dwarka Prasad Sharma. Both the units manufacture 'Himtaj Oil' by the same process containing the same ingredients. The partners of both the units are members of the same family. It is not disputed before us by the Revenue that the 'Himtaj Oil', which was the subject matter of decision of the Calcutta Bench and which is the subject matter of the decision of the Delhi Bench and the present appeal is one and the same product. It is also relevant to note that the Chemical Examiner's Report considered by both Benches and those placed before us are the same reports. The other materials regarding the clinical test conducted in respect of 'Himtaj Oil' and the result of the market enquiry relate to one and the same product.

24. We first consider whether the appellant has used only ingredients exclusively mentioned in the authoritative books on Ayurveda for manufacturing its product 'Himtaj Oil'. We find that there are ample materials made available by the appellant in support of his contention that the ingredients which had gone into the manufacture of 'Himtaj Oil' are only those which are specifically mentioned in the authoritative text books on Ayurveda. One such material even though not conclusive to hold that the product is an ayurvedic medicament, is the drug licence issued under the provisions of Drugs & Cosmetics Act, 1940. This licence issued in favour of the appellant would clearly show that the ingredients are referred in authoritative book Ayurveda Bhav Prakash. The above book was included in the first Schedule to the Drugs & Cosmetics Act, 1940. It is not disputed before us that the ingredients are from the authoritative text book. As mentioned earlier, the only objection was that the product was not manufactured in accordance with the formulae in the text book and not sold in a name given in the Text Book. Therefore, it is safe to hold that the appellant's product contains ingredients exclusively mentioned in the authoritative text books on Ayurveda.

25. We have already referred to the relevant provisions of law that has to be applied in examining the question whether the product is to be classified under Heading 3305.10 or 3003.30 of the Customs Tariff Act. Ayurvedic medicaments were initially under sub-heading 3003.30 and the duty levied was 15%. But by virtue of Notifications from time to time a total exemption was granted for the above item. Under Notification No. 75/94-CE dated 29.3.94 Ayurvedic system of medicines prepared in accordance with the formulae given in the authoritative books specified in the first Schedule to the Drugs and Cosmetic Act, 1949 and sold under a generic name were granted full exemption from excise duty. The goods against sub-heading 3003.30 were classified again into three as mentioned earlier. Admittedly, the appellant's product will not come within the Ist item, since it is not manufactured exclusively in accordance with the formulae described in the authoritative books and sold under the name as specified in such books. According to the appellant, the product contains only ingredients specified in the Ayurvedic Text included in the first Schedule to the Drugs and Cosmetics Act, but manufactured as per the formula of the manufacturer. It is not sold under the name specified in the ayurvedic text. Therefore, even if the product is not a classical ayurvedic medicament still it is an ayurvedic medicament namely, patent and proprietory ayurvedic medicament. The product has been identified by the Drugs Control authorities also in the same manner. If we refer to Notification No. 9/93 dated 28.2.93 it can be seen that all medicaments including those used in Ayurvedic Unani, Siddha, Homoeopathic or Bio-chemic systems were granted a total exemption. There was no differentiation made at that time between patent and proprietory ayurvedic medicines and classic ayurvedic medicines. We are not able to agree with the view taken in 2000 (125) ELT 765 that sub-heading 3003.10 would take in patent or proprietory ayurvedic medicaments. According to us, sub-heading 3003.30 took in both classical as well as patent or proprietory ayurvedic medicaments. The distinction between the two was brought in for the first time in the Notification 75/94 dated 29.3.94 and total exemption was limited to only the classical ayurvedic medicaments whereas 10% ad valorem duty was levied on patent or proprietory medicine. The Notes explaining the important changes made in the Central Excise duty under the Finance Bill 1994 (quoted in the earlier portion of this order) would show that exemption from excise duty on all patent or proprietory medicines of Homoeopathic, Unani, Siddha, Ayurvedic and biochemics was withdrawn and a duty of 10% was being prescribed. This means that earlier such exemption was there for this category of Ayurvedic medicine also. When examined alongwith the earlier notifications of the year 1983 etc. it will be clear that such exemption was granted against sub-heading 3003.30 which should be taken as a heading including both categories of Ayurvedic medicines. Unbranded products continued to enjoy the benefit of the exemption. In the present case, the product of the appellant, having ingredients exclusively mentioned in the authoritative books, but manufactured in accordance with the formulation of the manufacturer and sold in the brand name 'Himtaj Oil', is Ayurvedic medicament even though not a classical one.

26. In this connection it is advantageous to refer to Maneesh Pharmaceuticals' case which is relied on by the appellant in support of its contention. In the above case, the question that came up for consideration was whether the product of the assessee, which was not manufactured exclusively in accordance with the formulae described in any authoritative text book of Ayurveda can be classified under sub-heading 3003.30 if the ingredients which have gone into the product are mentioned and described in standard work on Ayurveda. The Tribunal after perusing citations and extracts from number of authoritative text books on Ayurveda found that almost all the ingredients of the product 'softovac' are mentioned and described in the standard work on Ayurveda. The Tribunal also took into consideration affidavits from experts in Ayurveda submitted by the assessee before the Collector (Appeals). These affidavits certified that various ingredients as well as the preparations are in ayurvedic nature and known as Ayurvedic System. On the above basis, the Tribunal came to the conclusion that, although the formula is not described as such in the books, since the ingredients and their effects are discussed therein, the absence of specific formulae may not be material. It is relevant to note that the name of the product in the above case was also not the one mentioned in the text book. In spite of the above, the view taken is that a product can be classified as the Ayurvedic medicine if its ingredients are mentioned in the text books with reference to its medicinal effect. This decision was not followed in 2000 (125) ELT 765 for the reason that Naturelle Health Products Pvt. Ltd. case was not placed before the Bench which decided that case. It is relevant to note that appeal taken up by the Revenue against the decision of the Tribunal in Maneesh Pharmaceuticals was dismissed by the Supreme Court in Civil Appeal No. 1744/98 on 17.8.98 whereas the appeal from Naturelle Health Products Pvt. Ltd. is still pending.

27. Apart from the above, Naturelle Health Products was a case where the assessee did not dispute that some of the ingredients in the product were synthetic formulations. It was also noted in the decision that the products in question were marketed as allopathic and sold under the same trade mark for exactly the same treatment or cure in America and other foreign countries without any claim to their being even remotely related to Ayurved. The Tribunal in the above case posed the question as to whether a product manufactured in accordance with the Western Allopathic System and marketed as allopathic medicine in the Western World could be trumpeted and marketed as ayurvedic medicine in India. We find that the facts in the present case are entirely different. Apart from the above, as mentioned earlier, we are not able to agree with the view that sub-heading 3003.10 would take in patent or proprietory ayurvedic medicaments. According to us, the dictum in Maneesh Pharmaceuticals' case has to be applied here also especially in view of the fact that the above decision has been affirmed by the Apex Court.

28. In Richardson Hindustan Ltd. Vs. CCE, 1988 (38) ELT 424 (T) the question that came up for consideration was whether two products of the appellant, namely Vicks VapoRub and Vicks Inhaler are medicaments falling under Heading 3003.30 or are medicaments falling under Tariff Heading 3003.19. These products were initially classified under Heading 3003.19. Later the appellants sought revised classification under Heading 3003.30 for the reason that the Directorate General of Technical Development had approved those preparations as Ayurvedic. After considering elaborately the contentions raised by both sides, the Tribunal took note of the fact that there is no definition of Ayurvedic medicaments in the Central Excises and Salt Act or in the Central Excise Tariff. Although Ayurvedic medicines have been defined under Section 3 (a) of the Drugs & Cosmetics Act, the same cannot be applied for the purpose of classification of a product for Central Excise duty under the Central Excises and Salt Act in view of several judicial pronouncements. The argument put forward by the Revenue that one should go by the definition of Section 3 (a) of the Drugs & Cosmetics Act to find out whether the product is an ayurvedic medicine was not accepted by the Tribunal. Admittedly the products concerned were not manufactured in accordance with the formulae in a text book and therefore it was contended that it will not come under 3003.30. The Tribunal took the view that the products should be classified under Central Excise Tariff Heading 3003.30 if it is found that in the common parlance it is known as Ayurvedic medicine and all ingredients are mentioned in the authoritative books on Ayurvedic medicines. It is not necessary that the product was manufactured in accordance with the formulae in the text book. To examine these aspects the matter was remanded. The Revenue took up the matter in appeal before the Supreme Court as Civil Appeal No. 2127/88. The appeal was dismissed on 10.1.89. It should, therefore, be taken that the Supreme Court has approved the two tests laid down in the decision of the Tribunal.

29. In Amrutanjan Ltd. Vs. CCE, 1991 (32) ECR 538 the Tribunal took the view that Amrutanjan Pain Balm manufactured by the appellants is not an Ayurvedic medicament as they use synthetic ingredients in its manufacture and it is not prepared according to formulations laid down in any authoritative text on Ayurveda. This decision was reversed by the Supreme Court in Amrutanjan Ltd. Vs. CCE, 1995 (8) RLT 777 (SC)=1995 (77) ELT 500 (SC). If we read the above order of the Supreme Court as a whole it can be seen that the only requirement is that the product contain Ayurvedic ingredients. It is not essential that the manufacturing process should follow the formula in any text book. According to us, in 2000 (125) ELT 765 the Tribunal has wrongly distinguished the judgment of the Apex Court by observing that it did not reverse the finding of the Tribunal that the Ayurvedic medicine must be prepared according to the formulations laid down in any text book on Ayurveda. It is seen that the judgment of the Tribunal under appeal was set aside and it was held by the Supreme Court that Amrutanjan Pain Balm Ayurvedic is an Ayurvedic medicine entitled to be classified as such. If the Apex Court had approved the finding of the Tribunal that in order to be classified as Ayurvedic medicine, it has to be manufactured in accordance with the formulae given in the Ayurvedic text book then for that reason alone the appellant's product would not have been directed to be classified as Ayurvedic medicine.

30. In Panama Chemical Works Vs. Union of India, 1992 (62) ELT 241 the Madhya Pradesh High Court had occasion to consider whether a product called 'Swad' digestive tablets having 3% active ingredients as per Ayurvedic texts and 97% sugar/liquid glucose could be classified as Ayurvedic medicine. The Court found that for manufacturing 'Swad' tablets the manufacturers have taken the ingredients from the Ayurvedic Text Books with certain modifications evolving a formula of their own. The formula so prepared with the aid of the text books was patented and they were granted licence for manufacture of the drug by the Drug Controller. The Court took the view that the product of the petitioner was Ayurvedic preparation to be classified under 3003.30.

31. There are sufficient materials in this case to support the contention of the appellant that its product is known as Ayurvedic 'medicament' in common parlance. The certificate issued by Professor S.N. Tripathi, Dean Faculty of Ayurveda, Institute of Medical Sciences, Banaras Hindu University after conducting a clinical trial of the medicine on patients suffering from headache due to various causes would certainly support the contention of the appellant that its product is an Ayurvedic medicament having curative value. The Chief Chemist's Report dated 25.7.94 also is to the effect that the product is an Ayurvedic 'medicament'. The appellant has also produced materials like affidavits etc. to show that the product is understood as an Ayurvedic medicament in common parlance.

32. In the judgment of the Allahabad High Court in 1994 (19) STJ 150, even though Court considered a case which was under the provisions of the Sales Tax Act, the question which directly came up for consideration was whether 'Himtaj Oil' is a cosmetic or a medicinal oil. The Assistant Commissioner (Judicial) took the view that it is a medicinal oil and its main function is to relieve from pain. This view was reversed by the Tribunal. The High Court of Allahabad did not agree. It upheld the view taken by the Assistant Commissioner (Judicial) and observed as follows:-

"There are many oils that are medicines used for massaging painful parts of the body. Such oils would naturally fall in the category of medicines although some-body may use such oil as hair oil. Such occasional or exceptional use will not change the basic character of thing. There is nothing in the order passed by the Tribunal to justify a revision of view taken by the learned Commissioner (Judicial) who specifically held that it was medicinal oil used for relief from pain and for certain other diseases. On this point, therefore, the Tribunal order suffers from an error of law and deserves to be reversed."

33. When a finding has been entered by a High Court on the nature of the product, with specific reference to its medicinal quality, it cannot be totally ignored by stating that the consideration was under the provisions of a different statute, unless it is a case where the product is covered by different definitions under the different statutes.

34. In the light of the above discussion, we come to the conclusion that the appellant's product is an ayurvedic medicament. If that be so, the next question to be considered is whether it will come within the mischief of Note 1 (d) of Chapter 30.

35. Chapter 33 deals with essential oils and resinoids; perfumery, cosmetic or toilet preparations. Note 6 under Chapter 33 would give an indication as to the nature of products which come under Heading No. 33.05 - preparations for use on the hair. Note 6 refers to brilliantines, perfumed hair oils, hair lotions, pomades and creams, hair dyes (in whatever form), shampoos, whether or not containing soap or organic surface active agents as products coming under the heading 'preparations for use on hair'. The above would indicate that the emphasis is on the products' property as a cosmetic or toilet preparation and not as a medical preparation. Note 2 under Chapter 33 indicates that, even if the product has subsidiary curative or prophylactic use, it has still to come under Heading 3303 to 3307 if the labels, literature and the other indications on the packing would go to show that the product is for use as cosmetic or toilet preparation and they are specialised to such use.

36. In the present case a reference to the printing on the cartons and the literature contained therein would not show that the product is meant for use as a cosmetic or toilet preparations. After referring to the name of the medicine the direction for use of the same has been detailed. Annexure 5 reads as follows :-

"For Use/Doses:-