Commissioner of Central Excise Vs. Sri Ramtirth International - Court Judgment

Excerpt:
1. the revenue is aggrieved with the de novo order-in-original no.25/2001 (commr.) dated 20.7.2001 passed by commissioner of central excise, coimbatore by which he has agreed with the assessee that the product namely 'brahmi oil' is an ayurvedic product manufactured in accordance with formulae described in the authoritative books specified in the first schedule to the drugs and cosmetics act, 1940 and requires to be classified under tariff heading 3003.31 carrying nil rate of duty. in order to arrive at this conclusion he has examined the evidence produced by the assessee inasmuch as the opinion expressed by the board in consultation with the drugs controller of india under the directorate general health services. the drugs controller vide letter no. d.g.h.s.g.o. no. 11048/1/88-p dated 22.4.88 has also opined that 'ramtirth brahmi oil' is classifiable as an ayurvedic medicine. further he has also referred to the opinion expressed by the deputy chief chemist, central excise laboratory who after studying the manufacturing process and ingredients used for the manufacture of 'brahmi oil' has opined that the product in question has ayurvedic medicinal properties.he has also seen the clarification issued by the board vide letter no.f. no. 103/1/88-cx.3 dated 18.3.1988 that 'ramtirth brahmi oil (thail)' has to be classified as an ayurvedic medicine and hence accepted the plea for classifying the item under heading 3003. he has noted that during july 1996, the central excise tariff structure of chapter 30 underwent changes and has several sub-headings to heading 3003. he has noted that since 'brahmi oil' which is nothing but an ayurvedic medicine and that there is a specific heading for such ayurvedic medicine under sub-heading 3003.31 for the products manufactured exclusively in accordance with the formulae described in the authoritative books specified in the first schedule to the drugs and cosmetics act, 1940, the 'ramtirth brahmi oil' which is nothing but ayurvedic medicine has to be classified under sub-heading 3003.31 as per rule 5 of the interpretation rules is view of the fact that there is a specific entry for it which may read classification as such.however he has held that he is not inclined to discuss the issue of using the brand name of 'ramtirth' owned by the assessee.2. the revenue is aggrieved with this portion of the order wherein he has not given his opinion on the affixing of brand name 'ramtirth' which according to the revenue disentitles the assessee from claiming the classification under heading 3003.31 which carries nil rate of duty. it is stated that heading 3003.39 which is a residuary heading carrying 8% duty applies to the product on which the trade mark is affixed. it is prayed in the appeal that as the budgetary changes has incorporated the residuary entry after budget 1994, therefore the assessee is not entitled to the benefit of notification no. 8/94 dated 1.3.94 which supersedes the previous notification no. 75/94 dated 29.3.94. it is stated that branded ayurvedic products do not get the benefit of notification in terms of budget 1996. it is stated that the item is sold with the brand name 'ramtirth'. therefore it falls under residuary heading 3003.39 as patent and proprietary ayurvedic medicaments and duty is required to be discharged.3. we have heard dr shri c.mani and shri k.s. venkataramani, consultant.4. ld. dr took us through the order and the tariff changes and prayed for remand of the matter so that the issue pertaining to use of brand name can be examined.5. ld. consultant pointed out to the notification which gives illustrations. he pointed out that 'ramtirth' is a house name and use of house name will not disentitle from the benefit of notification as has been held by the apex court in the case of astra pharmaceuticals ltd. v. cce, 1995 (49) ecc 24 (sc) : 1995 (75) elt 214 csc). he drew our attention to this bench order rendered in the case of cce, chennai v. calcutta chemicals ltd., 2000 (70) ecc 833 (t) : 2000 (120) elt 97.he pointed out that the revenue appeal was allowed on the ground that the assessee has used a different name than the generic name and the authoritative book while in their case they have not changed the generic name 'brahmi oil' which is prepared according to the ayurvedic text. he pointed out that revenue is not challenging the nature of the product being ayurvedic medicine and prepared according to the formulae and the certificate relied by the commissioner. he pointed out that the department has also dropped proceedings initiated for claiming duty on the ground that the item is not an ayurvedic product. he produced a letter dated 18.10.95 issued by the assistant commissioner (preventive) dropping the proceedings. on a specific query from the bench as to whether 'ramtirth' is a trade name or not, consultant submitted that he is not aware of that fact. however he files a copy of form b issued by district industries center while issuing registration certificate as ssi unit wherein it is mentioned that the unit is a ssi unit engaged in the manufacture of 'brahmi oil' under brand name 'ramtirth' (ayurvedic medicine). he further submitted that as the item is marketed as 'brahmi oil' in its generic name, the use of the house mark does not disentitle them from benefit of notification. he also files a letter dated 29.3.2000 issued by director of drugs control who have stated in the certificate that the item 'brahmi oil' with their house-mark 'ramtirth' as ayurvedic medicine manufactured exclusively in accordance with formulae described in the authoritative book. he pointed out that the notification in question extracts the budgetary changes brought in 1996 and even as per the illustrations given in the notification, the benefit is not to be denied.6. on a careful consideration we notice that there is no dispute with regard to the item being an ayurvedic product and marketed in the generic name 'brahmi oil'. the question is as to whether the item which is marketed as 'ramtirth brahmi oil' and is required to be classified under residuary heading 3003.39 as other carrying 8% duty. the revenue's case is that since it is patent & proprietary ayurvedic medicine carrying a brand name the classification has to be made in the residuary heading. it is further stated that the commissioner ought to have gone into this question and decided the use of brand name and the same has not been done. it is prayed that the case has to be remanded so that the issue can be sorted out. we notice from the records and certificate issued by the authorities that the item is an ayurvedic medicine marketed also in the generic name. it is not clear as to whether the 'ramtirth' is a brand name or house name. mere use of house name will not disentitle the benefit of notification in terms of the illustrations therein. further form b of the district industries centre shows that it is a brand name. this is not a conclusive evidence to see as to whether it is a registered name under trade and merchandise act or not. it is required to be seen and for that purpose the assessee has not produced registration certificate. in that view of the matter it is but proper that the issue has to be remanded to the commissioner of central excise for de novo consideration. we are also inclined to take this view in view of the fact that the letter issued by director of drugs control discloses that 'ramtirth' is a house name. there is a doubt as to whether the 'ramtirth' is a house name or brand name and further the department has dropped the proceedings. in that view of the matter the issue has to be remanded. the commissioner after granting an opportunity of hearing shall pass a de novo order on the aspect of house name or brand name and as to whether such use will change the classification and disentitle them from the benefit of notification.hence the impugned order insofar as the item being an ayurvedic product is confirmed. the revenue is not contesting the same. the matter is remanded to the original authority for de novo consideration on the limited question noted above. thus the appeal is allowed by way of remand for de novo consideration on the directions given. ordered accordingly.

Judgment:
1. The revenue is aggrieved with the de novo Order-in-Original No.25/2001 (Commr.) dated 20.7.2001 passed by Commissioner of Central Excise, Coimbatore by which he has agreed with the assessee that the product namely 'Brahmi Oil' is an ayurvedic product manufactured in accordance with formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940 and requires to be classified under tariff heading 3003.31 carrying NIL rate of duty. In order to arrive at this conclusion he has examined the evidence produced by the assessee inasmuch as the opinion expressed by the Board in consultation with the Drugs Controller of India under the Directorate General Health Services. The Drugs Controller vide letter No. D.G.H.S.G.O. No. 11048/1/88-P dated 22.4.88 has also opined that 'Ramtirth Brahmi Oil' is classifiable as an ayurvedic medicine. Further he has also referred to the opinion expressed by the Deputy Chief Chemist, Central Excise Laboratory who after studying the manufacturing process and ingredients used for the manufacture of 'Brahmi Oil' has opined that the product in question has Ayurvedic medicinal properties.

He has also seen the clarification issued by the Board vide letter No.F. No. 103/1/88-CX.3 dated 18.3.1988 that 'Ramtirth Brahmi Oil (thail)' has to be classified as an ayurvedic medicine and hence accepted the plea for classifying the item under heading 3003. He has noted that during July 1996, the Central Excise Tariff Structure of Chapter 30 underwent changes and has several sub-headings to heading 3003. He has noted that since 'Brahmi Oil' which is nothing but an ayurvedic medicine and that there is a specific heading for such ayurvedic medicine under sub-heading 3003.31 for the products manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940, the 'Ramtirth Brahmi Oil' which is nothing but ayurvedic medicine has to be classified under sub-heading 3003.31 as per Rule 5 of the Interpretation Rules is view of the fact that there is a specific entry for it which may read classification as such.

However he has held that he is not inclined to discuss the issue of using the brand name of 'Ramtirth' owned by the assessee.

2. The revenue is aggrieved with this portion of the order wherein he has not given his opinion on the affixing of brand name 'Ramtirth' which according to the revenue disentitles the assessee from claiming the classification under heading 3003.31 which carries NIL rate of duty. It is stated that heading 3003.39 which is a residuary heading carrying 8% duty applies to the product on which the trade mark is affixed. It is prayed in the appeal that as the budgetary changes has incorporated the residuary entry after Budget 1994, therefore the assessee is not entitled to the benefit of Notification No. 8/94 dated 1.3.94 which supersedes the previous Notification No. 75/94 dated 29.3.94. It is stated that branded ayurvedic products do not get the benefit of Notification in terms of Budget 1996. It is stated that the item is sold with the brand name 'Ramtirth'. Therefore it falls under residuary heading 3003.39 as Patent and Proprietary Ayurvedic Medicaments and duty is required to be discharged.

3. We have heard DR Shri C.Mani and Shri K.S. Venkataramani, Consultant.

4. Ld. DR took us through the order and the tariff changes and prayed for remand of the matter so that the issue pertaining to use of brand name can be examined.

5. Ld. Consultant pointed out to the Notification which gives illustrations. He pointed out that 'Ramtirth' is a house name and use of house name will not disentitle from the benefit of Notification as has been held by the Apex Court in the case of Astra Pharmaceuticals Ltd. v. CCE, 1995 (49) ECC 24 (SC) : 1995 (75) ELT 214 CSC). He drew our attention to this Bench order rendered in the case of CCE, Chennai v. Calcutta Chemicals Ltd., 2000 (70) ECC 833 (T) : 2000 (120) ELT 97.

He pointed out that the revenue appeal was allowed on the ground that the assessee has used a different name than the generic name and the authoritative book while in their case they have not changed the generic name 'Brahmi Oil' which is prepared according to the ayurvedic text. He pointed out that revenue is not challenging the nature of the product being ayurvedic medicine and prepared according to the formulae and the certificate relied by the Commissioner. He pointed out that the Department has also dropped proceedings initiated for claiming duty on the ground that the item is not an ayurvedic product. He produced a letter dated 18.10.95 issued by the Assistant Commissioner (Preventive) dropping the proceedings. On a specific query from the Bench as to whether 'Ramtirth' is a trade name or not, consultant submitted that he is not aware of that fact. However he files a copy of Form B issued by District Industries Center while issuing registration certificate as SSI Unit wherein it is mentioned that the unit is a SSI Unit engaged in the manufacture of 'Brahmi Oil' under brand name 'Ramtirth' (Ayurvedic Medicine). He further submitted that as the item is marketed as 'Brahmi Oil' in its generic name, the use of the house mark does not disentitle them from benefit of notification. He also files a letter dated 29.3.2000 issued by Director of Drugs Control who have stated in the certificate that the item 'Brahmi Oil' with their house-mark 'Ramtirth' as ayurvedic medicine manufactured exclusively in accordance with formulae described in the authoritative book. He pointed out that the notification in question extracts the budgetary changes brought in 1996 and even as per the illustrations given in the notification, the benefit is not to be denied.

6. On a careful consideration we notice that there is no dispute with regard to the item being an ayurvedic product and marketed in the generic name 'Brahmi Oil'. The question is as to whether the item which is marketed as 'Ramtirth Brahmi Oil' and is required to be classified under residuary heading 3003.39 as other carrying 8% duty. The revenue's case is that since it is Patent & Proprietary Ayurvedic Medicine carrying a brand name the classification has to be made in the residuary heading. It is further stated that the Commissioner ought to have gone into this question and decided the use of brand name and the same has not been done. It is prayed that the case has to be remanded so that the issue can be sorted out. We notice from the records and certificate issued by the authorities that the item is an ayurvedic medicine marketed also in the generic name. It is not clear as to whether the 'Ramtirth' is a brand name or house name. Mere use of house name will not disentitle the benefit of notification in terms of the illustrations therein. Further Form B of the District Industries Centre shows that it is a brand name. This is not a conclusive evidence to see as to whether it is a registered name under Trade and Merchandise Act or not. It is required to be seen and for that purpose the assessee has not produced registration certificate. In that view of the matter it is but proper that the issue has to be remanded to the Commissioner of Central Excise for de novo consideration. We are also inclined to take this view in view of the fact that the letter issued by Director of Drugs Control discloses that 'Ramtirth' is a house name. There is a doubt as to whether the 'Ramtirth' is a house name or brand name and further the department has dropped the proceedings. In that view of the matter the issue has to be remanded. The Commissioner after granting an opportunity of hearing shall pass a de novo order on the aspect of house name or brand name and as to whether such use will change the classification and disentitle them from the benefit of notification.

Hence the impugned order insofar as the item being an ayurvedic product is confirmed. The revenue is not contesting the same. The matter is remanded to the original authority for de novo consideration on the limited question noted above. Thus the appeal is allowed by way of remand for de novo consideration on the directions given. Ordered accordingly.