Case Note & Summary
The dispute involved the classification of 'Dant Manjan Lal' (DML), a product manufactured by M/s. Baidyanath Ayurved Bhawan Ltd. The appellant contended that DML should be classified as a medicament under Chapter Sub-heading 3003.31 of the Central Excise Tariff Act, 1985, while the Department argued it was a cosmetic under Chapter Heading 33.06. The classification issue had seen fluctuating opinions among various benches of the Customs, Excise and Gold (Control) Appellate Tribunal, with some favoring Baidyanath's claim and others siding with the Department. The Supreme Court noted that prior to 1975, DML was classified as a medicine and exempt from excise duty. However, after the introduction of Residuary Item 68 in 1975, Baidyanath began paying excise duty. In 1978, an exemption notification was issued, but doubts arose regarding DML's classification, leading to show cause notices from the Department. The Tribunal ultimately ruled that DML was not treated as an Ayurvedic medicine in common trade parlance, a finding upheld by the Supreme Court in a previous case (Baidyanath I). The court emphasized the importance of the common parlance test in determining whether a product is a medicament or cosmetic. The court concluded that the product did not change its character despite changes in tariff entries and dismissed the appeals, agreeing with the Tribunal's reasoning that DML is a toilet preparation rather than a medicinal product.
Headnote
A) Central Excise - Classification of Goods - Medicament vs Cosmetic - Classification of 'Dant Manjan Lal' - Central Excise Tariff Act, 1985, Chapter Sub-heading 3003.31 and Chapter Heading 33.06 - The court upheld the Tribunal's finding that 'Dant Manjan Lal' is not recognized as an Ayurvedic medicine in common parlance and thus is classifiable as a cosmetic. The common parlance test was applied to determine the classification, rejecting the claim for exemption under the relevant notification (Paras 29-39).
Issue of Consideration
Whether 'Dant Manjan Lal' is classifiable as a medicament under Chapter Sub-heading 3003.31 or as a cosmetic under Chapter Heading 33.06.
Final Decision
The Supreme Court dismissed the appeals, agreeing with the Tribunal's classification of DML as a cosmetic and not a medicament, emphasizing the common parlance test.
Law Points
- Classification of goods
- medicament vs cosmetic
- common parlance test
- Ayurvedic medicine definition
- Central Excise Tariff Act
- 1985
