2004 INSC 1159
                                    SUPREME COURT OF INDIA
                                 Meghdoot Gramodyog Sewa Sansthan

                                                      Vs.

                              Commissioner of Central Excise, Lucknow

                                           C.A.No.7445 of 2003

                                  (Mrs.Ruma Pal and Arun Kumar JJ.)

                                                 08.10.2004

                                                JUDGMENT

Ruma Pal, J.
1. The question has arisen whether the following six items should be classified under the
Central Excise Tariff Act, 1985 as medicaments under Heading 3003.30 or under Heading
3305.10 and 3305.50 of which deal with perfumed hair oil and other preparations for use on
the hair. The six items are:

        (1) Bhringraj Tail

        (2) Trifia Brahmi tail

        (3) Neem Herbal Sat

        (4) Sat Reetha

        (5) Meghdoot Herbal Sat

        (6) Meghdoot Herbal Powder.

2. The Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) was of the view
that the products were properly classifiable under Tariff Heading 3305.10 and 3305.50. The
appellant has challenged the finding of the Tribunal and contended that each of these six
products referred to above were classifiable under Heading 3003.30.

3. The two competing headings reads as follows:

        30.03 - Medicaments (including veterinary medicaments)

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        3303.30 - Medicaments, including those used in Ayurvedic, Unani, Siddha,
        Homoeopathic or Bio-chemic systems.

        33.05 - Preparations for use on the hair

        3305.10 - Perfumed hair oils

        3305.50 ­ Other

4. In corning to the conclusion that all the six products were classifiable under preparation
for use on the hair, the Tribunal held that except for certain letters from doctors, the
appellants had not produced any evidence to show that the products were prescribed by
Medical Practitioners as medicines for various diseases. The second basis of the Tribunal's
conclusion was that there was nothing to show that patients were kept under observations, or
that the results said to have been achieved by the use of the products were obtained by
keeping the patients in hospitals over a period of time. Thirdly, it was held that the
Commissioner had found that the packing of the products would indicate that the products
were cosmetics and not medicines or drugs since it depicted 'a lady with black flowing hair'
and other similar images.

5. The decision of the Tribunal is unsustainable on the reasoning given. A product may be
medicinal without having been prescribed by a Medical Practitioner. It was also not
necessary for a person manufacturing medical products to claim classification under Tariff
Heading 3303.03 without establishing that the product had in fact been tested on patients in
controlled situations or that the outcome had not been tested for effectiveness. This would be
particularly true in the cases where the products are claimed to be based on traditional
ayurvedic formulae.

6. The appellant has drawn our attention to the composition of the six products and the uses
in respect of each of these six products. This has not been doubted by the Tribunal nor indeed
by the Departmental authority. The composition and the curative proper-ties being admitted,
it was not open either to the Department or the Tribunal to hold that the items were cosmetics
merely by reason of the outward packing.

7. This Court has in similar matters come to the conclusion that items which may be sold
under names bearing a "cosmetic" connotation would nevertheless remain medicines based
on the composition of the items in B.P.L. Pharmaceuticals Ltd. v. Collector of Central
Excise, Vadodara.

8. As far as the first three items listed earlier are concerned, this Court has in Commissioner
of Central Excise, Calcutta-IV v. Pandit D.P. Sharma1, and Commissioner of Central Excise,
Allahabad v. Himtaj Ayurvedic Udyog Kendra2 in connection with Banphool oil and Himtaj
oil held that the ayurvedic hair oils, were medicines and should be properly classified under
Tariff Heading 3303.03, rather than under Tariff Heading 3305.10 or 3305.50. Indeed the

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learned counsel appearing on behalf of the respondent has not seriously contended otherwise
in respect of the first three items.

9. As far as items 4, 5 and 6 are concerned, for the reasons stated earlier, we are of the view
that they are also properly classifiable under Medicaments under Tariff Heading 3303.30.

10. The appeal is, accordingly, allowed and the decision of the Tribunal is set aside.

12003 (154) E.L.T. 324 (S.C.)
22003 (154) E.L.T. 323 (S.C.)

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