Judgment:
1. The issue involved is whether the item 'gulkand' is classifiable under Chapter Heading 3003 as Medicament or under Chapter 2001 as Food products.
2. We have heard Shri Ashok Mehta, SDR for the revenue and Ms. Reena Khair, Advocate for the respondents and have carefully considered the submissions made by both the sides and perused the records.
3. Briefly, the facts of the case are that M/s. Ajmer Food Industries, Indore, are engaged in the production of 'gulkand' which is sold in the brand name 'Super Tower Gulkand'. The practice followed is that the Respondent is receiving gulkand in bulk quantity from their Head Office located at Ajmer (Rajasthan) and the bulk quantity so received is repacked in unit container after adding very negligible quantity of Sodium Benzaite (Preservative) and the same thereafter is labelled with the brand name "Super Tower Gulkand". The respondents filed their initial declaration on 12.4.94 claiming under Chapter Heading 3003.30 of the Central Excise Tariff Act, 1985 being branded Ayurvedic medicine as per Notification No. 75/94 dated 29.3.94. The said Notification now stands rescinded. The respondent submitted a revised declaration on 20.5.94 declaring their product 'gulkand' under Chapter Heading No.2001.10 claiming full exemption of Notification No. 2/94 dated 1.3.94.
3. Present appeal has been filed by the Revenue against the Order dated 9.10.2000 passed by the Commissioner (Appeals) Customs and Central Excise, Bhopal. The Commissioner (Appeals) in the said order has dismissed the appeal filed by the Department in view of the discussion and findings mentioned therein and upheld the Order-in-Original dated 30.12.97 passed by the Assistant Commissioner, Central Excise Division, Indore. The appellant has filed the appeal inter-alia, on the grounds that the Commissioner (Appeals), Bhopal in Order-in-Appeal No. 144/97 dated 27.10.97 had remanded the matter for denovo adjudication for the limited purpose of determining the eligibility of Central Excise Notification for SSI after complying with the principles of natural justice and the appellate authority had not found the classification of the impugned goods under Central Excise Tariff Heading 3003.31 illegal.
The appellate authority has committed error in disturbing the classification of 'gulkand' from Central Excise Tariff 3003.31 to Central Excise Tariff Heading 2001, which was accepted by the earlier adjudicating authority and it had not been challenged by the respondent or the Revenue before the appellate authority. It is also contended that in the absence of any appellate order changing the classification of 'gulkand' from Chapter 3003.31, the classification was binding both for the Revenue as well as for the Respondent and the adjudicating authority erred in disturbing the existing classification approved earlier by his predecessor, the then Assistant Commissioner. xxxxx Commissioner (Appeals) in his Order-in-Appeal dated 9.10.2000 has also committed an error being in agreement to the same. The Commissioner (Appeals) has erred in not appreciating the fact that the respondents were in possession of Drug Manufacturing Licence describing impugned goods as Ayurvedic Medicine and also the merit of extracts of Ayurvedic Pharmacopoeia namely Rastantra Sar and Siddha Prayogh Sangrah, 1980, submitted alongwith earlier classification list while claiming the classification of Ayurvedic medicine, under Central Excise Tariff Heading 3003, which describes the following therapeutic properties:- (a) Gulkand is known to be Ayurvedic system of medicines as evident from Rastantra Sar and Sidha Proyog Sangrah 1980 edition. The therapeutic, prophylactic or curative value of the product are described in the aforesaid authoritative book on Ayurvedic Medicine.
(b) The Respondent is having Ayurvedic Licence in the name of the party's head office issued by the Directorate of Ayurvedia, Ajmer, Rajasthan for manufacturing gulkand. This again is indicative of the fact is Ayurvedic Medicine.
(c) The respondent has themselves been treating Gulkand as Ayurvedic Medicine in their declaration filed under rules 174 of Central Excise Rules, 1944.
(d) Rastantra Sar & Sidha Prayog Sangraha, 1980 edition prescribes mode of taking this medicine with milk and in doeses varying from 1 to 1/2 tola. Further, the same also says that it is a useful medicine for cure of Daha, Pitt Dosh and Constipation. It also has a cooling effects on minds and is prescribed for cooling effect." 4. The Commissioner (Appeals) has committed error in allowing the exemption under Central Excise Notification NO. 1/93, for Small Scale Industries because the respondents were not the owner of brand name because, the trade mark registration was granted in favour of Ajmer Food Products in year 1975 at which time, the partner were Shri Gyan Chand Manghani and Shri Vasudev Manghani and as per partnership agreement dated 1.4.95, the partnership dissolved due to resignation of one partner and new partnership firm having partners Shri Vasudev Managhani and Shri Murli Manghani was formed. As the earlier partnership firm was not a body corporate, the new partnership firm cannot claim proprietary interest in the brand name "Tower Brand" for the purposes of Central Excise Notification No. 1/93. It has, therefore, been prayed that the impugned order be set aside and the item 'gulkand' may be allowed to be classified under Sub-heading 3003 instead of Chapter Heading 2001 of Central Excise Tariff, Act, 1985 and also the benefit of exemption notification NO. 1/93 may be denied to the respondents.
5. Shri Ashok Mehta, ld. SDR forcefully argued that the principles of res judicate are applicable in the present case and as such the classification of the item 'Gulkand' cannot be reopened. The photocopy of the order dated 27.10.97 passed by Shri M.C. Kaul, Commissioner (Appeals), Customs and Central Excise, Bhopal is available at pages 17 and 18 of the paper book filed by the respondents. And it is seen there from that the Commissioner (Appeals) has remanded the matter for de novo adjudication. It is not confined to any particular issue/issues as seen therefrom. Meaning thereby that all the issues are open for being raised and adjudicated upon. The Ld. SDR has relied upon the Supreme Court case of M/s. Shree Baidyanath Ayurved Bhavan Ltd. reported in 1996 (83) ELT 492 (SC) regarding classification of Lal Dant Majan in which the Supreme Court has held that it is classifiable as toilet requisite and not an Ayurvedic Drug and Anand Swarup Agarwal case reported in 2000 (119) ELT 536 (Calcutta High Court) on the point of re-judicate.
6. Ld. Counsel for the respondents has also inter-alia relied upon the judgment of Supreme Court in the case of Shree Vaidya Nath Ayurved Bhawan, Ltd. reported in 1996 (83) ELT 492 (SC) and stated that the test laid down by the Hon'ble Supreme Court in the said case to test whether the product is a medicine or no is to the effect that medicine is ordinarily prescribed by a medical practioner and it is used for a limited time and not every day unless it is so prescribed to deal with a specific disease like diabetes. It is further held that goods should be classified according to popular meaning attached to them by those using the product. Ld. Counsel for the respondents has emphasised that the product 'gulkand' is commonly used in the betal leaf and the user can take it in any quantity and any number of items without any medical prescription and as such it cannot be classified as a medicine in view of the test laid down by the Hon'ble Supreme Court in the case (supra).
It is neither meant for therapeutic or prophylactic use nor put to any major uses or any use in hospital. It may be mentioned that 'Gulkand' is prepared form leaves of rose flower with added sugar and no other medicine properties are added. 'Gulkand' is used by Paan Vendors for putting in betal leaf just fro sweetening taste. Such 'Gulkand' is available in Kirna shops rather than the medical shops. He has also submitted that claiming classification of goods under different tariff headings is purely a question of law and can be raised at any stage.
Assessee is always at liberty to seek for change in the tariff classification which is lawfully applicable to his goods. In this regard, She has cited the case of this Tribunal in the case of J.K.Synthetics Ltd. vs. Collector of Customs reported in 1992 (62) ELT 41 (Tribunal) wherein it has been held that the plea of reclassification of goods and their assessment at the concessional rate can be considered at the Appellate stage. She also referred to another case of Shri Vaidya Nath Ayurved Bhawan Ltd., Patna vs. CCE, Patna reported in 1985 (22) ELT 844 (Tribunal) in which Dant Manjan (Lal, black or white) have been held not classifiable as Ayurvedic medicine or drug.
Similarily 1997 (95) ELT T 14, 2000 (38) RLT 158 (Tribunal) is also on the point of classification.
7. In view of the above, we find that the product in question 'Gulkand' is classifiable under the heading 2001 and not under the heading 3003.
We order accordingly and appeal filed by the Revenue is dismissed.