‘ Tail ’ as well as ‘ Sharbat ’ are classifiable as Ayurvedic Medicines: CESTAT [Read Order]

The Delhi bench of CESTAT recently held that Tail, as well as Sharbat, are classifiable as Ayurvedic Medicines.

In instant case, respondent is an Ayurvedic pharmacy who claimed benefit with reference to two products manufactured by them namely Rovan Poshak Tail and Rooh-e-Gulab Sharbat.

The Department was of the view that the two products “sharbat” and “tail” were wrongly classified by the respondent under Chapter 30 as medicaments.

The original authority ordered for denial of the Notification which resulted in demand of Central Excise duty along with interest and penalties. Commissioner (Appeals) upheld the classification of the two items under 3004 as claimed by the respondent and set aside the demanding duty.

Now the department approached the CESTAT for contesting the same and R.K. Mishra appeared for the Revenue and Amit Jain at the behest of the respondent. The Revenue challenged the impugned order and argued that a product is to be considered as drug or cosmetics only with reference to the Central Excise Act and not as per Drugs and Cosmetics Act.

The terms of classification are also described by the Revenue that it should be in terms of Sections and Chapters of the Central Excise Tariff and also added that sharbat and tail will not fall in the category of Chapter 30 but will fall in Chapter 21 and Chapter 33 respectively.

The advocate for respondent stated that products in question contained ingredients mentioned in various authoritative Ayurvedic books and are known in common parlance as Ayurvedic Medicines.

The bench heard both their arguments and observed their submissions and said that both products under dispute have medicinal properties as well as other commonplace properties. In order to press the vie bench called for the decision of Supreme Court in the case of Natural Health Products (P) Ltd and also in Puma Ayurvedic Herbal (P) Ltd has observed that in order to determine whether a product is a cosmetic or a medicament a “twin test” has been laid down.

The bench comprising Justice Dr. Satish Chandra, President V. Padmanabhan, Member (Technical) observed the order of Commissioner (Appeals) wherein they concluded such products have medicinal value and properties in relation to the twin test laid by the apex court.

In case of both the products which consist various ingredients which are mentioned in Ayurvedic texts as having therapeutic use and in the container of tail having a disclaimer that it is not a cosmetic and toiletry preparation but is an Ayurvedic Medicine for curative and preventive therapy.

By following those orders bench ordered that sharbat and tails have medicinal property and are considered to be Ayurvedic Medicines.