The Ahmedabad Bench of Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that Suncros UVA Lotion, Gel, and Hyclean Cream are classifiable as medicaments.
VVF India Limited the appellant/assessee submitted that the product ‘Suncros UVA’ Gel and Lotion/Hyclean Cream is correctly classified under heading No. 30049099 as ‘Medicaments’. The concessional rate under Sl. No. 62 of Notification 04/2006-CE dated March 1, 2006, was available to the appellant. As per the composition of the product, it is clear that it is manufactured out of various USP/IP drugs and other chemicals, and as per the ingredient of the product in the wearing proportion, it is to protect against UV rays that can cause damaging skin cells, leading to sunburn or even skin cancer.
The assessee stated that the product is manufactured under a drug manufacturing license. On the package of the product, the product label clearly states that the product is to be sold by retail on the prescription of a registered medical practitioner as well. The declaration is under the requirements of Rule 96 of the Drugs and Cosmetics Rules, 1945. The product can only be administered by a licensed cosmetologist, dermatologist, or qualified healthcare professional. Therefore, the product is medicinal and correctly classifiable under 3004 and not under 3304 as cosmetic.
The tribunal found that if a product is cosmetic and if the package contains that, the same can be used only on a prescription by a medical practitioner; in such a case, no one will purchase the said product as cosmetic. The Tribunal observed that the adjudicating authority has come to the conclusion that the product is a cosmetic classifiable under 3304 only on his assertion and presumption based on common sense.
The two-member bench of Ramesh Nair (Judicial Member) and C. L. Mahar (Technical Member) has observed that the appellant-assessee produced the ingredients used in the manufacture of UVA Lotion, Gel, and Hyclean Cream. The package of the product and label state that the product is to be sold by retail on the prescription of a registered medical practitioner only.
While allowing the appeal, the tribunal held that the adjudicating authority was supposed to either get the product tested or at least obtain an expert opinion from an authorized and recognized independent pharma/chemical authority before deciding the classification. The CESTAT directed to reconsider the issue as the observation of the Commissioner was invalid.
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