2000(05)LCX0031

IN THE CEGAT, EASTERN BENCH, KOLKATA

Smt. Archana Wadhwa, Member (J) and Dr. S.N. Busi, Member (T)

PANDIT D.P. SHARMA

Versus

COMMISSIONER OF CENTRAL EXCISE, CALCUTTA

Order No. A-629/Cal/2000, dated 19-5-2000 in Appeal No.E/R-428/97

Cases Quoted

Amrutanjan Ltd. v. Collector — 1995(03)LCX0150 Eq 1995 (077) ELT 0500 (S.C.) — Relied on ............................ [Para 7]

Balaji Agency v. Commissioner of Sales Tax — 1994 (19) STJ-150 (All.) — Referred [Paras 3, 11, 12]

Collector v. Richardson Hindustan Ltd. — Referred ............................................................ [Para 2a]

Commissioner of Sales Tax v. Gordhandas Tokersey — 1983 (52) STC 381 (Bom.) — Referred [Para 8]

Commissioner of Sales Tax v. Jai Shri Products — 1974 (34) S.T.C. 494 (All.) — Followed [Para 8]

Dabur India Ltd. v. Collector — 1994(03)LCX0018 Eq 1994 (071) ELT 1069 (Tribunal) — Referred .................... [Para 7]

Hindustan Ferrodo Ltd. v. Collector — 1996(12)LCX0029 Eq 1997 (089) ELT 0016 (S.C.) — Referred .................. [Para 10]

Panama Chemical Works v. U.O.I.— 1992(07)LCX0021 Eq 1992 (062) ELT 0241 (M.P.) — Referred..................... [Para 7]

Prakash Trading Co. v. Collector — 1989(11)LCX0047 Eq 1990 (046) ELT 0420 (Tribunal) — Relied on ............... [Para 7]

Sharma Chemical Works v. Commissioner —Final Order No. A-598/Cal/99, dated 24-6-1999 — Relied on [Paras 5, 7, 8]

Shree Baidyanath Ayurved Bhawan v. Commissioner — 1995(03)LCX0046 Eq 1996 (083) ELT 0492 (S.C.) — Referred [Para 6]

UOI v. TSR & Company — 1985(03)LCX0063 Eq 1985 (022) ELT 0701 (Mad.) — Referred ................................... [Para 8]

DEPARTMENTAL CLARIFICATIONS CITED

C.B.E. & C. Circular No. 196/30/96-CX., dated 3-4-1996................................................. [Para 10]

Calcutta Commissionerate Trade Notice No. 112/Ch/33-3/CE/Cal.II/91, dated 4-10-1991 [Para 2(a)]

Advocated By :   Dr. Samir Chakraborty, Advocate, for the Appellant.

Shri R.K.Roy, JDR, for the Respondent.

[Order per : Archana Wadhwa, Member (J)]. - The issue for examination in the present appeal is as to whether the appellant’s product `Himtaj Oil’ has to be classified as Ayurvedic Medicament falling under sub-heading 3003.30 of the Central Excise Tariff Act, 1985 or the same has to be classified as `Perfumed Hail Oil’ falling under sub-heading 3305.10 of the Tariff Act.

2. Briefly stated the facts of the case are as under :

2(a). The appellants are licensed with the Directorate of Drug Control, West Bengal since June, 1981. Himtaj Oil is one of the items mentioned in the approved list of ayurvedic medicines which the appellants are duly licensed to manufacture by the said authority. The appellants filed a C/List on 5th October, 1994 with their jurisdictional Assistant Commissioner of Central Excise claiming the classification of the product under sub-heading 3000.30 as an Ayurvedic Medicament. A show-cause notice dated 15th November, 1994 was issued to the appellants calling upon them as to why their Himtaj Oil should not be classified as Perfumed Hair Oil under sub-heading 3305.10 attracting higher rate of duty. The appellants replied to the show-cause notice and put forth various pleas and submissions. The Assistant Commissioner after considering the entire facts on record vide his order dated 2-4-1996 classified the said goods as an Ayurvedic Medicament falling u/s.h. 3000.30 and approved the list accordingly. For holding so, the Assistant Commissioner relied upon a number of factors like drug licence issued by the Drug Controller; letter issued by the Superintendent of Ayurvedic Department, Sir Sundarlal Hospital, Banaras which confirmed the product to be ayurvedic medicine; study report of Institute of Post Graduate Education & Research in Ayurved, Calcutta-9 on Himtaj Oil which reveals that it is an Ayurvedic product which is found to have a ‘pain relief’ effect in headache & migrain and also provides relief against dandruff, the Range Officer’s report from which it was seen that market enquiry was conducted with dealers, wholesalers, 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 stated that no ayurvedic perfumery chemical could be detected in the sample and the report described presence of natural perfumery and it was concluded that considering the mentioning of different ailments and method of application given on the container, there are grounds to consider the product as medicament; SSI Registration Certificate for manufacturing/ processing Ayurvedic Hair Oil as per Drug Licence and the Trade Notice No. 112/Ch/33-3/CE/Cal.II/91 dated 4-10-1991 issued by the Calcutta Commissionerate in the light of Apex Court’s judgment in the case of C.C.E., Hyderabad v. Richardson Hindustan Ltd.

2(b). The above order of the Assistant Commissioner was appealed against by the Revenue by filing an application under Section 35E of the Central Excise Act. The Commissioner (Appeals), Central Excise while disposing of the said application filed by the Revenue, set aside order of the Assistant Commissioner and held that the product in question was a cosmetic preparation, being a perfumed hair oil and merits classification u/s.h. 3305.10. The said order of the Commissioner (Appeals) is impugned before us.

3. Dr. Samir Chakraborty, learned Advocate appearing for the appellants, submits that the original order was passed by the original adjudicating authority after taking into account the entire evidences placed on record. The said evidences have been dealt with by the Commissioner (Appeals) in a cryptic manner and there are factually incorrect observations made by the learned Appellate Authority. He submits that the tests laid down by the Hon’ble Supreme Court in various judgments stand duly satisfied in the instant case for classifying the product as ‘Ayurvedic Medicine’. He submits that the appellants are holder of drug licence issued by the Director of Drug Control West Bengal containing therein the enclosure showing approved list of ayurvedic drugs/medicines, one of which is Himtaj Oil. It would be obvious therefrom that the ingredients composing the said goods are set out in the said enclosure to the drug licence and against each of the ingredients reference to authoritative Ayurvedic literature in which they find place including the page numbers have been specified. On this factor, it is proved that the oil in question is an ayurvedic preparation. He also submits that the sample of the product was tested by the Chief Chemist who specifically arrived at a report that there are sufficient grounds to consider the product as medicament. Such report, submits the learned Advocate has been wrongly interpreted by the Commissioner (Appeals). He observed that - “Thus from the report it can be derived that the product is primarily a perfumed hair oil with subsidiary therapeutic value meriting classification under sub-heading 3305.10.” He also submits that not only in common parlance the product is known as medicine inasmuch as the same has to be applied in the case of minor ailments, headache, migrain etc. but he submits, that the said claim of the appellants made before the Assistant Commissioner was got verified by the Department and as per the Range Officer’s report obtained by the Department itself based upon the markets survey conducted by them, the product was to be treated as ayurvedic medicine. The Commissioner (Appeals) has rejected the Department’s report on flimsy grounds by observing that even cosmetic preparations are sold in medicine shop. He submits that such observation by the Commissioner (Appeals) was against the market enquiry conducted by the Department from the common man who used the said goods considering the same as medicament and not as toilet requisite. He also places reliance on the research conducted by the various Ayurvedic Educational Institutions establishing the said product as Ayurvedic Medicine for the purpose of curing of headache, migrain, sinusites and/or diseases of upper respiratory track. He submits that such expert opinion should have been given due weightage by the learned Appellate Authority. On the contrary he has side-tracked the said expert opinion without any justifiable ground. He submits that impugned order by the Commissioner (Appeals) is based upon presumption and assumption and is not a concrete evidence on record to show that Himtaj Oil is used by the people as a toilet requisite and as such the Revenue has failed to discharge the onus placed upon them by the production of affirmative and tangible evidence for which the onus lies upon the taxing authorities. He further draws our attention to the decision of the Hon’ble Allahabad High Court reported in 1994 (19) STJ 150 in the case of M/s. Balaji Agency v. Commissioner of Sales Tax, U.P. wherein one of the questions before their Lordship was as to whether the Himtaj Oil was Ayurvedic Medicine as claimed by the assessee or the same was merely toilet and cosmetic product. He submits that after taking into account the submissions made by both sides, the Hon’ble Allahabad High Court came to the conclusion that Himtaj Oil in question was an Ayurvedic product and the same has to be taxed at the rate prescribed for medicine for the purpose of levy of sales tax. He submits that as the issue has already been decided in respect of the same item, though under different law, different conclusion cannot be arrived at for the purpose of Central Excise Law.

4. Dr. Samir Chakraborty also draws our attention to various departmental clarifications as well as circulars issued by the Board. These clarifications are to the effect that each medicament used in the various systems of treatments e.g. Ayurvedic, Unani and Sidha has to be examined on merits and preparation would merit classification as Ayurvedic Medicine if in the common parlance it is known as an Ayurvedic Medicine and all the ingredients are mentioned in the authoritative book(s) on Ayurvedic Medicine. He submits that as the appellants satisfied the above tests for determining the classification of the product to be an Ayurvedic Medicine, the decision of the Commissioner (Appeals) is not sustainable on the face of it.

5. Dr. Samir Chakraborty also draws our attention to the Tribunal’s decisions in the case of M/s. Sharma Chemical Works v. C.C.E., Calcutta-I (Order No. M-284 dated 7-11-1997 read with Final Order No. A-598/Cal/99 dated 24-6-1999) wherein the dispute related to the classification of a similar product “Ayurvedic Banphool Oil”. He submits that originally there was difference of opinion between Members and the matter was referred to Third Member who agreed with the view of Member (Judicial) holding that the product to be an ‘Ayurvedic Medicament’. As such he submits that following the ratio of the decision in the case of Sharma Chemical Works, their appeal be allowed and the impugned order be set aside.

6. Countering the arguments, Shri R.K. Roy, learned JDR supports the findings of the Commissioner (Appeals) and submits that the appellate authority has discussed each and every point and submitted that the Commissioner (Appeals) has rightly followed the report of the Chief Chemist inasmuch as there is no determined opinion given by him and the same is to the effect that the product may be considered as medicament. He submits that Commissioner (Appeals) has also observed that Chief Chemist has arrived to a conclusion on the basis of printed words used on the cartoons without having any independent assessment of the declaration on the carton. He submits that based upon the Chief Chemist’s report the Commissioner (Appeals) has rightly held that as the perfumery effect is the prime oil in question and therapeutic effect is only a secondary; the product is to be classified under Heading 33.05. Learned Commissioner (Appeals) has followed the Apex Court judgment in the case of Shree Baidyanath Ayurved Bhawan v. C.C.E., Nagpur - 1995(03)LCX0046 Eq 1996 (083) ELT 0492 (S.C.) wherein it was held by their Lordship that the medicine is prescribed by a medical practitioner and used for a limited time and not every day unless so prescribed to deal with the specific diseases like diabetes. The certificates and affidavits given by the Vaidyas do not advance the case of Shri Vaidyanath Ayurved Bhawan Ltd. in the absence of any evidence to prove that the common man who uses this Dant Manjan daily to clear his teeth considers this Dant Manjan as a medicine and not a toilet requisite. Shri Roy, learned JDR also submits that Commissioner (Appeals) has also observed that the cartons/labels of the product mentioned the same to be hair tonic beneficial for headache and not a medicine for headache. He submits that the appellants do not have a case on merits and prayed for rejection of their appeal.

7. We have considered the submissions made from both sides. We find that the factors referred to and the evidences relied upon by the Assistant Commissioner are not disputed factually before us. However, evidentiary value of the same has been doubted by the Commissioner (Appeals). We agree with the learned Advocate for the appellants that the issue involved in the present case is the same as was involved in the case of Sharma Chemical Works referred to (supra) and the various evidences relied upon by the Tribunal holding in favour of the appellants in that case were more or less the same which are present in the present case. In the order recorded by the Member (J) in that case, the decisions and judgments of the various High Courts and the Hon’ble Supreme Court were taken note of. It was observed that Madhya Pradesh High Court in the case of Panama Chemical Works v. UOI - 1992(07)LCX0021 Eq 1992 (062) ELT 0241 (M.P.), while considering the nature of the product `swad’ observed that in the case of definition of ‘Ayurvedic Preparation’ in the Central Excise Tariff, resort has to be made to the provisions of the Drug Cosmetics Act, 1940 and the scientific and technical aspects of the product are to be determined with the aid of the definition in that Act. Further the Apex Court decision in the case of M/s Amrutanjan Ltd. v. C.C.E. reported in 1995 (077) ELT 500 held that the ingredients known both in the Western Sciences as also to Ayurvedic and refined for use in the medicines will not take them out of the purview of Ayurvedic medicines. Use of some synthetic ingredients will also not effect the ayruvedic character of the medicine. Similarly the Tribunal in the case of Dabur India Ltd. - 1994(03)LCX0018 Eq 1994 (071) ELT 1069 (T) held that the product ‘Himtaj Candy’ containing 25% active ingredients as per Ayurvedic texts and 75% of sugar for taste and preservation was held to be on Ayurvedic medicine classifiable u/s.h. 3003.30 of CETA, 1988. In the case of M/s Prakash Trading Co. v. C.C.E. - 1989(11)LCX0047 Eq 1990 (046) ELT 0420 (T), wherein it was held that hair oils having fragrance of ayurvedic ingredients and known for their medicinal properties are to be regarded as Ayurvedic medicines and not perfumed hair oil irrespective of the addition of a small amount of sandal wood oil not for the purpose of perfume but for the purpose of preventing the oils from becoming rancid.

8. We have observed in the Sharma Chemical Works that in almost all the decisions given on the subject, a lot of importance has been attached to the licence granted by the Drug Authorities. It has been the ratio of all these decisions that the licence having been issued by the Drug Controller holding the medicine to be an Ayurvedic Medicine, Central Excise Officers have no authority for challenge or criticise Drug Controller which is a staturoy authority and is in the nature of giving a finding on the nature of the drug for which the licence for manufacture has been issued. We also find that Third Member in Sharma Chemical’s case while deciding the difference of opinion has referred to Full Bench of Allahabad High Court in the case of Commissioner of Sales Tax v. Jai Shri Products - 1974 (34) STC 494 (All.) wherein it was observed that cosmetic means a preparation designed to beautify hair, skin or complexion or to alter appearance of the body or for cleansing, colouring, conditioning or protecting skin, hair, nails, eyes or teeth. Reference was also made by the Hon’ble Third Member to the decision of the Madras High Court in the case of TSR & Company - 1985(03)LCX0063 Eq 1985 (022) ELT 0701 (Mad.) wherein it was held the expression ‘perfumed hair oil’ must connote an oil to which perfume has been imparted by way of positive and deliberate act and not as meaning an article which just happens to have perfume. Normally, it will indicate an oil which is exclusively prepared for the care of the hair and it will not include a bath oil, which is applied to entire body or the portions of the body before bath. Similarly use of sandal wood and sand wood oil for neutralizing the unpleasant odour of the Ayurvedic ingredients was held not as a conscious and deliberate act to impart perfume to the oil, in the case of Commissioner of Sales Tax, Maharasthra State, Bombay v. Gordhandas Tokersey - 1983 (52) STC 381 (Bombay).

9. Now we also will discuss the present case in the light of the ratios laid down by the above decisions.

10. There is no dispute that the appellants are holding licence from the Drug Controller permitting them to manufacture Himtaj Oil as Ayurvedic Medicament. We have already observed that this has been held to be one prime factor for considering classification of the product. The fact that the enclosure attached to the licence, gives description of the ingredients along with authoritative Ayurvedic Books in which such ingredients have been mentioned, has not been disputed before us. Commissioner (Appeals) has not discussed that the ingredients of the product in question are not mentioned in the authoritative books. In this connection, we also refer to C.B.E. & C. Circular No. 196/30/96-CX dated 3-4-1996 wherein the benefit of Notification No. 75/94-CE has been held to be available to the products if they are manufactured in accordance with the formula prescribed in the authoritative books and sold under generic name. The said Circular for ready reference and better appreciation is reproduced below :

“Ayurvedic Medicaments - Notification No. 75/94-C.E.:

Ayurvedic system of medicines prepared in accordance with the formulae given in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act and sold under a generic name are fully exempt from excise duty under Notification No. 75/94-C.E. dated the 29th March, 1994. The scope of the exemption on Ayurvedic, Unani, Siddha, Homoeopathic and Bio-chemics systems was clarified by the Board through a Circular F. No. 830/1/94-TRU, dated the 29th March, 1994. It was made clear that the benefit of exemption is applicable so long as the medicaments are prepared according to the formulae described in the relevant authoritative books or pharmacopia as the case may be, and the medicine is sold by name described in such books or pharmacopia. It is immaterial whether the manufacturer puts his mark, logo, monogram, symbol etc. in marketing such medicines.

2. It has now been brought to the notice of the Board that Ayurvedic medicine manufacturers are facing certain difficulties in availing of exemption from excise duty in cases where some other ingredients are also added so as to increase the shelf life or to make it in a convenient form or to be palatable. Such ingredients are reported to be not having any therapeutic value. However, the benefit of exemption from excise duty is being denied on the ground that such medicaments are not strictly being manufactured as per the standard text-books which is a condition prescribed under the said notification.

3. The matter has been examined. There is no dispute that the medicaments remain Ayurvedic medicines and are sold as Ayurvedic medicines under generic name as stated in the standard text books even if preservatives or binding agents etc. are added but the question is whether in view of the existing condition specified under the notification the concessional rate of duty will be available or not. A view has been expressed that as long as the ingredients are added in the ayurvedic medicaments which do not have any therapeutic value and the formulation is otherwise prepared as per the prescribed text books, it may not be proper to deny the benefit of full exemption to such of those ayurvedic medicaments from excise duty under Notification No. 75/94-C.E. In this context, the Ayurvedic, Siddha and Unani Drugs Technical Advisory Board under the Ministry of Health and Family Welfare were consulted, who has opined that significant changes have taken place in the process of making of ayurvedic medicines and preservatives, inner excipients like starch, lactose and willing agents like sodium laurerle sulphate are nowadays widely used. They are in favour of allowing use of preservatives by the manufacturers of ayurvedic medicines.

4. Having regard to the above, the Board is of the view the benefit of exemption under S. No. 3 of Notification No. 75/94-C.E. should not be denied to ayurvedic medicines if they are manufactured in accordance with the formulae prescribed in the authoritative text books and sold under the generic name mentioned in the said authoritative text books but contain preservatives, inner excipients, binding agents etc. not having any therapeutic value. In such cases the assessing officers may obtain a certificate to be produced by the manufacturers from the appropriate Drug Authorities that the drug satisfies the following conditions :-

(a)      The medicament has been prepared in accordance with the formulae prescribed in the authoritative text books; and

(b)      The ingredients added, other than those prescribed in the authoritative text books, should not have any therapeutic value.

Needless to say that for availing the benefit of exemption, the ayurvedic medicament should be sold under the generic name as specified in the authoritative text books.

5. Pending cases on this issue, if any, may be disposed of accordingly.

[Based on C.B.E. & C. Circular No. 196/30/96-CX, dated 3-4-1996].”

11. There is no finding by the Commissioner (Appeals) that -

11(i). The licence issued by the Drug Controller mentioning the ingredients under the authoritative books is not correct. As such we feel inclined to agree with the appellants.

11(ii). We may at this stage refer to the Chief Chemist report on the Himtaj Oil, which has been reproduced in the Commissioner (Appeals)’s order. The same is as under :

“The samples contain Agar, Khas keore, Laung and Menthol etc. which are perfumery material. In the authentic literature on Ayurvedic `Keore’, `laung’, `khas’ and mentol have been reported to have therapeutic effect in congestive headache, earache and are used as an nervotonic and antiseptic etc. in addition to their fragrant odour i.e. perfumery effect.

Moreover, on the container of the sample, it is mentioned specially for headache cure. The different ailments for which the product can be used and method of application is also given on the container of the sample. In view of the above there are grounds to consider the product as medicament.”

The said report is clearly to the effect that the sample contains Agar Khas, keora, laung and menthol which in the ayurvedic literature have been reported to have therapeutic effect. Commissioner (Appeals) has not placed any reliance on the Chief Chemist report by observing that he has not assertively opined that the product is a medicament but has gone by the printed words on the outer cover of the package. We are not convinced with the above argument of the Commissioner (Appeals). There is a clear observation by the Chemical Examiner that the ingredients used in the product have been mentioned in the ayurvedic books which factors also fully corroborated by issuing of a licence to the appellants and the mention of various authoritative books containing each ingredient along with page number in the enclosure attached to the licence. As such we find that the Assistant Commissioner has rightly relied upon the Chief Chemist report to classify the product as claimed by the appellants.

9. Coming to the next finding i.e. how the product is viewed in common parlance, one important factor in deciding the classification, we find that the appellants had taken a categorical stand before the original adjudicating authority that the product is known as a medicine in the common parlance. Apart from the printing on the outer cover of the hair oil to the research conducted by various Ayurvedic institutions, all these have been discussed in the order of the Assistant Commissioner. We have ourselves seen some of the reports which have been placed on record in the shape of a paper book. In one of the said reports appearing at page 14 based upon Clinical Study of Himtaj Oil conducted by Siraswa (General Headache). Ayurvedic (Migraine) and Puya Rakta (Sinusitis) conducted by the various persons of research of Institute of Post Graduate Education & Research in Ayurvedic (S.V.S.P. Hospital), Govt. of West Bengal, Department of Health. It has been held as under :

“Assessment of results was based on the clinical improvement and subjective relief and a sense of well being.

Results were classified as excellent, good, poor and bad/no response where amolionation of signs and symptoms more than 75%, more than 50%, less than 52% and no effect respectively. The therapeutic efficiency of Himtaj Oil to the patients were shown in the following table :

(i)       Man was suffering from general headache i.e. 66.6% and good i.e. 33.3%, out of 18 patients. The improvement was also excellent 70% and good 30% in case of migraine, out of 10 patients.

(ii)      In sinusitis it was found that poor effect i.e. 33.3% and no response i.e. 66.6% out of 6 patients which has been shown in the above table.

(iii)     Discussion: Himtaj Oil is an Ayurvedic product which is found to have a pain relief effect in headache and migraine when applied on forehead it comes first a sensation of warmth and smarting followed by boiling effects, therapeutic measures to be compared to the drugs in conventional use with the additional advantage that it has no toxic effect or side effect; is a safe drug from a short term use or even, for prolonged use where necessary. One important point may be mentioned here, during whole clinical study, 6 patients informed that they got relief from Dandruff.

(iv)     Conclusions: Himtaj Oil is found to be useful drug for the treatment of sirusula (general headache) and Ardhavedi (Migraine)

(2) It may be used for management of dandruff.

(3) No side effect is observed with the use of Himtaj Oil.”

We also observe that Superintendent having jurisdiction over the factory conducted verifications for the purpose of getting opinion whether the product ‘Himtaj Oil’ is sold as Ayurvedic Medicine or not. The report of is that market enquiry conducted with dealers, wholesalers etc. and other connected people were to the effect that ‘Himtaj Oil’ has to be treated as Ayurvedic Medicine. This report conducted by the Revenue itself has been disapproved by the Commissioner (Appeals) that bills of medical shop cannot indicate beyond doubt that Himtaj Oil is not an Ayurvedic Medicine inasmuch as the other cosmetics are also sold in medical shops. We find that the Appellate Authority has not countered the Supdt.’s report which is not depending only on the medical shop bills but is based upon affirmative and positive evidence of result of market survey. Lastly it is observed that to bring the product under Chapter 33 as perfumed hair oil, the oil must be refined to which perfume has been imparted by way of positive and deliberate act. While dealing with the said issue we would like to reproduce below the discussions of the Assistant Commissioner :

“From the cited case law, I find that the expression ‘perfume oil’ must connote an oil to which perfume has been imparted by way of positive and deliberate act and not as meaning an article which must happen to have perfumed. Taking into consideration this guideline of the case law the assessee’s contention receives relevancy in the case and is considered to be a factor for the purpose of classifying the product ‘Himtaj Oil’. Besides, assessee cited another case law 1989(11)LCX0047 Eq 1990 (046) ELT 0420 (T). After going through the cited case law, I find that this case law has no direct impact in this case but there is some point which may be taken as guidelines in this case. The principle that has been enumerated in this case law is that the product may be considered as Ayurvedic since formula of the product contain ayurvedic ingredients and they have been processed more or less as per Ayurvedic manufacturing Vidhi and in the instant case this principle is applicable as the product ‘Himtaj Oil’ is prepared complying this principle and details in this regard has been discussed above and form this opinion that the product in question answers the requirements to classify it as Ayurvedic product. CBE&C Tariff Advise No. 27/74 dated 25-11-1974 published in the 1985(03)LCX0063 Eq 1985 (022) ELT 0701 (Madras) as mentioned by the assessee says that perfumed hair oil would appropriately cover the product (hair oil) wherein the perfume or odour has not been impregnated by a deliberate effort. In the case of any ingredients imparting odour to hair oil the excisability or otherwise of hair oil having such ingredients(s) will be decided on the basis of primary role of the ingredients i.e., if the ingredient were primarily added to give a pleasant odour to a hair oil, then it (hair oil) would attract levy of duty under Tariff entry ‘perfumed hair oil’ but if the ingredients are added purely for medicinal/other fragrance imparted incidentally would not make the product (hair oil) as falling under the said entry. The theme of the tariff advice dated 25-11-74 has highlighted point as stated which are applicable in the instant case and hence the same is proper and relevant for the purpose of classifying the product ‘Himtaj Oil’.”

Against the above, there are no findings by the Commissioner (Appeals) that the perfumes have been added to the oil in question by way of positive and deliberate act so as to consider the oil as perfumed hair oil for everyday use or for all time use. Accordingly we find ourselves to agree with the view taken by the Asstt. Commissioner.

10. We also note that as laid down by the Hon’ble Supreme Court in the case of Hindustan Ferrodo Ltd. - 1999 (089) ELT 0016 (S.C.) = 1996 (017) RLT 0807 (SC) that onus to prove classification is on the Revenue. After appreciating the entire evidences relied upon by the original adjudicating authority and rejected by the Commissioner (Appeals) we find that the Revenue has not placed on record any evidence to discharge the onus placed upon them. No market enquiry has been conducted by the Revenue and whatever conducted shows the result in favour of the appellant and no other evidence has been placed by the Revenue to show that the oil in question is known as hair oil in common parlance.

11. Another factor which weights with us is that Himtaj Oil under dispute has already been treated as Ayurvedic Medicine by Hon’ble Allahabad High Court (supra), though the said decision was given in the case of Commissioner of Sales Tax. We find that the ratio of the same would be equally applicable for the purpose of classification of the product under Central Excise Tariff Act inasmuch as considerations for deciding the Ayurvedic medicinal nature of the oil or perfumed hair oil in both the cases are identical. The relevant portion of the Hon’ble Allahabad High Court is reproduced below :

“The only item now left is Himtaj Oil, the assessing officer treated this article as a cosmetic. On appeal, the learned Asstt. Commissioner (Judicial) held it to be a medicine. He has observed that it was a medicinal oil and its main function is to relieve pain. He has mentioned that this oil is used for headache, sambahlbai, Adhakapri etc. The learned Tribunal in its order has observed that this oil was also used for applying on the head. It was held that it would be more appropriate to treat this article as a cosmetic. The Tribunal has now hereby held that this oil was essentially a hair oil. Now it has held that it was not basically medicinal oil meant for relieving pain as held by the learned Asstt. Commissioner (Judicial). 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 somebody 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 Asstt. 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.

From the above reasons, this revision is partly allowed and the Tribunal’s order is modified so far as Himtaj Oil is concerned and it is held that the turnover thereof is liable to be taxed at the rate prescribed for medicines. The Tribunal is directed to pass consequential order accordingly.

We find from the above that the Hon’ble Allahabad High Court has held the product to be Ayurvedic Medicine. We have not been shown by the Revenue that the said order of the Hon’ble High Court was reversed by the Hon’ble Supreme Court.

12. In view of the above discussions and in view of the Allahabad High Court judgment on the same product, we hold that the product in question is an Ayurvedic Medicine classifiable under heading 3003.30 as held by the Assistant Commissioner. Accordingly, we set aside the impugned order of the Commissioner (Appeals) and allow the appeal with consequential relief to the appellant (s).

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Equivalent 2001 (133) ELT 0723 (Tri. - Kolkata)

Equivalent 2000 (041) RLT 0443