The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in the case of Nuzen Herbal Pvt. Ltd. v. CCCE & ST, Hyderabad upheld the appeal filed by the assessee companies. The Tribunal held that the oil for ‘treatment of dandruff, premature greying and split ends’ was to be classified under Chapter 30 of the Central Excise Tariff Act, 1985 as Pharmaceutical Product.
Reiterating the facts of the present case, the assessee companies are engaged in the manufacture of Ayurvedic drugs and one of its products is “Nuzen Gold Herbal Hair Oil”.
The assessee had submitted before the previous adjudicating authority that the oil based Ayurvedic Proprietary Medicament used for the purpose of hair and scalp related ailments and are classified under Chapter 30 of the Central Excise Tariff Act, 1985. The Revenue, on the other hand, contended that the product shall be classified as perfumed hair oil under Chapter 33 of the Act for which the authorities issued a show cause notice (SCN). The determination of the same being the only issue in the case
It was contended by the assessee that the oil was manufactured on the license issued by Drugs Controller Department of Government of Andhra Pradesh the corresponding Act of which prescribes for the issuance of such drugs on a license by the authority. Further, the oil is used for the treatment of dandruff, falling hair or hair loss, premature baldness and these are medical treatment.
However, it was contended on behalf of the revenue that the oil is to be treated as cosmetic even if it has subsidiary therapeutic properties. Furthermore, the statements of stockists and distributors indicate that the goods are not sold as an ayurvedic medicament and can be used for the treatment of premature baldness.
After hearing both the parties, the Tribunal bench comprising of Judicial Member M.V. Ravindran and Technical Member C.J. Mathews referring to a number of cases adjudged by the Apex Court of India went on to gold that the findings of the adjudicating authority were mainly based on the ground that the license to the assessee was granted on the basis that the ingredients mentioned in the product label are not found in the authoritative books as per statement of Drugs Controller. However, according to the confirmation certificate to the Revenue authorities sent by the licensing authority mentioned that the oil is an ayurvedic product and it is manufactured as per the Ayurvedic norms.
Hence, it was held that the oil for ‘treatment of dandruff, premature greying and split ends’ was a pharmaceutical product.
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