Pankajakasthuri Herbals India Vs. C.C.E. - Court Judgment

Excerpt:
1. the appellants have challenged the order-in-appeal no. 8/2004-c.e., dated 4-8-2004 passed by the commissioner (appeals) holding that the items kaveri fairness milk cream, pankaja kasthuri, amrutha kasthuri are not classifiable as either ayurvedic product under tariff heading 3003.39 or as medicament used in ayurvedic systems. the authorities have proceeded to classify the item under tariff heading 3304.00 as cosmetics.2. we have heard both sides in the matter. it is an undisputed fact from the record that the appellants have obtained drug licence from the drug controller for manufacturing the items as ayurvedic medicaments.they have also shown before the authorities that the items in question are all medicaments and that they are used for treatment of skin diseases and not for beautification. it is the claim of the appellants that the items are used for treatment of diseases called periorbill melanosis and melasma. it is stated that periorbitl melanosis is an ailment inasmuch as that abnormal dark brown or grown black pigmentation arises on various tissues or organs. melanosis of skin may occur in sun burn, during pregnancy, as a result of addisons diseases and so on. the appellants have relied on the ayurvedic texts and contended that the same are manufactured in terms of the ingredients mentioned in the ayurvedic texts. this portion of the evidence is not disputed. so also in the case of the chloasma, which is considered to be a condition in which blotches of pale brown skin pigmentation appear on the forehead, cheeks and nose. it is developed sometimes during pregnancy. in some cases, the spots merge, forming the so called mask of pregnancy. it also occurs in women who have been taking oral contraceptive at or around, the time of menopause. the pigmentation is aggravated by severe light. references were made to the british medical association, a-z family health encyclopedia and stedman's medical dictionary. the claim of the appellant is that once the item is manufactured in terms of the ayurvedic texts and the ingredients are mentioned in the ayurvedic texts and after obtaining the drug licence issued by the office of the drug controller and licencing authority, then the item cannot be held as a cosmetics but has to be treated as an ayurvedic medicament. on our examination, we find that the contention raised by the appellant is correct. the further claim made is that where skin in between the thighs gets infected by fungal infection, the item is used for curing the same. these uses are not disputed by the adjudicating authority in the order. it is seen that the apex court, in the case of cce v. sharma chemical works , has clearly held that when the items are manufactured in terms of ayurvedic texts and are having therapeutic, prophylactic or curative value and the drugs are manufactured further by obtaining licence from the drug controller, then they have to be treated as medicaments. the apex court judgment in this case clearly applies to the facts of the present case.by no stretch of imagination, it can be held that the items can be considered as cosmetics. the apex court, in the case of naturalle health products (p) ltd. v. cce, hyderabad likewise found that when all ingredients of the products are mentioned in authoritative ayurvedic text books and manufactured by obtaining drug licence, then the item has to be treated as ayurvedic medicine.this judgment also clearly applies to the facts of the present case. we also notice that the tribunal, in the case of herbal products v. cce, calicut has found that the ingredients were mentioned in ayurvedic text books and the deputy drugs controller had clearly accepted the item to be a medicament. the tribunal upheld the contention to consider the items to be medicaments and not as cosmetics. this judgment also clearly applies to the facts of the present case. in view of these judgments and the claim of the appellant in using all the ingredients mentioned in ayurvedic texts and the items are meant for therapeutic, prophylactic or curative value in curing the skin diseases like, (a) blackish discolouration of the skin because of sun allergy; (b) blackish discolouration of the skin around the eyes; (c) black patches on the face; (d) blackish discolouration of the skin around the neck; (e) blackish discolouration of the skin between the thighs because of fungal infection; (f) black hurts; and (g) white hurts, etc., the claim of the appellants to treat the items as ayurvedic medicament for classification under tariff heading 3003.30 of cet is accepted by allowing the appeal with consequential relief, if any. ordered accordingly.(operative portion of this order was pronounced in open court on conclusion of hearing)

Judgment:
1. The appellants have challenged the Order-in-Appeal No. 8/2004-C.E., dated 4-8-2004 passed by the Commissioner (Appeals) holding that the items Kaveri Fairness Milk Cream, Pankaja Kasthuri, Amrutha Kasthuri are not classifiable as either Ayurvedic product under Tariff Heading 3003.39 or as medicament used in Ayurvedic systems. The authorities have proceeded to classify the item under Tariff Heading 3304.00 as Cosmetics.

2. We have heard both sides in the matter. It is an undisputed fact from the record that the appellants have obtained Drug Licence from the Drug Controller for manufacturing the items as Ayurvedic Medicaments.

They have also shown before the authorities that the items in question are all medicaments and that they are used for treatment of skin diseases and not for beautification. It is the claim of the appellants that the items are used for treatment of diseases called Periorbill Melanosis and Melasma. It is stated that Periorbitl Melanosis is an ailment inasmuch as that abnormal dark brown or grown black pigmentation arises on various tissues or organs. Melanosis of skin may occur in sun burn, during pregnancy, as a result of addisons diseases and so on. The appellants have relied on the Ayurvedic texts and contended that the same are manufactured in terms of the ingredients mentioned in the Ayurvedic texts. This portion of the evidence is not disputed. So also in the case of the Chloasma, which is considered to be a condition in which blotches of pale brown skin pigmentation appear on the forehead, cheeks and nose. It is developed sometimes during pregnancy. In some cases, the spots merge, forming the so called Mask of pregnancy. It also occurs in women who have been taking oral contraceptive at or around, the time of menopause. The pigmentation is aggravated by severe light. References were made to the British Medical Association, A-Z Family Health Encyclopedia and Stedman's Medical Dictionary. The claim of the appellant is that once the item is manufactured in terms of the Ayurvedic texts and the ingredients are mentioned in the Ayurvedic texts and after obtaining the Drug Licence issued by the Office of the Drug Controller and Licencing Authority, then the item cannot be held as a Cosmetics but has to be treated as an Ayurvedic Medicament. On our examination, we find that the contention raised by the appellant is correct. The further claim made is that where skin in between the thighs gets infected by fungal infection, the item is used for curing the same. These uses are not disputed by the adjudicating authority in the order. It is seen that the Apex Court, in the case of CCE v. Sharma Chemical Works , has clearly held that when the items are manufactured in terms of Ayurvedic texts and are having therapeutic, prophylactic or curative value and the drugs are manufactured further by obtaining licence from the Drug Controller, then they have to be treated as Medicaments. The Apex Court judgment in this case clearly applies to the facts of the present case.

By no stretch of imagination, it can be held that the items can be considered as Cosmetics. The Apex Court, in the case of Naturalle Health Products (P) Ltd. v. CCE, Hyderabad likewise found that when all ingredients of the products are mentioned in authoritative Ayurvedic text books and manufactured by obtaining drug licence, then the item has to be treated as Ayurvedic medicine.

This judgment also clearly applies to the facts of the present case. We also notice that the Tribunal, in the case of Herbal Products v. CCE, Calicut has found that the ingredients were mentioned in Ayurvedic text books and the Deputy Drugs Controller had clearly accepted the item to be a Medicament. The Tribunal upheld the contention to consider the items to be Medicaments and not as Cosmetics. This judgment also clearly applies to the facts of the present case. In view of these judgments and the claim of the appellant in using all the ingredients mentioned in Ayurvedic texts and the items are meant for therapeutic, prophylactic or curative value in curing the skin diseases like, (a) blackish discolouration of the skin because of sun allergy; (b) blackish discolouration of the skin around the eyes; (c) black patches on the face; (d) blackish discolouration of the skin around the neck; (e) blackish discolouration of the skin between the thighs because of fungal infection; (f) black hurts; and (g) white hurts, etc., the claim of the appellants to treat the items as Ayurvedic Medicament for classification under Tariff Heading 3003.30 of CET is accepted by allowing the appeal with consequential relief, if any. Ordered accordingly.

(Operative portion of this Order was pronounced in open Court on conclusion of hearing)