CIENS LABORATORIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal is directed against Order -in -Appeal No. KKS (119) 119/M -IV/2001, dated 31 -12 -2001 passed by the Commissioner of Central Excise (Appeals), Mumbai -IV, VI & Goa. The issue relates to classification of 'Alovit Cream' consisting of 'Aloe extract 10% w/w, Tocopheryl Acetate LP. 0.5% w/w and Moisturising cream base, manufactured by the appellant, M/s. Ciens Laboratories i.e. whether under CETH 3003.10 as T or P Medicines' or under CETH 3304 as 'Skin Care Products'. The appellant contended that the product is rightly classifiable under CETH 3003.10 as 'P or P Medicine' inasmuch as the goods have been manufactured under a drug licence issued under the Drugs & Cosmetics Act, 1940 and is used to treat skin disorders such as haemorrhoids, psoriasis, Atopic Dermatitis, Eczema, Xeroderma and Ichthyosis, skin ageing/wrinkling, acceleration of wound healing and minimizing scars and lightening post -acne marks and hyperpigmentation. The appellant also submitted affidavits or certificates issued by skin specialists who certified that 'Alovit Cream' is prescribed for treatment of skin disorders and the product literature also shows that it is used as a complete therapy for dry skin/dermatitis/hyperpigmentation or skin conditions like Psoriasis, Atopic Dermatitis, Eczema, etc. and should be used after consultation with the Doctor. In the light of these evidences, it is contended that the product in question is 'P or P medicines' and not 'cosmetics and toiletries'. These contentions were not accepted by the Revenue. The adjudicating and appellate authority held that in view of Note (2) to Chapter 33, merely because a product contains some subsidiary curative or prophylactic value, the product cannot be classified under CETH 3003 as the product is mainly used for skin care. It was also held by the Revenue that classification under the Drugs and Cosmetics Act would not be relevant for classification under the Central Excise Tariff. Accordingly, the product was classified under CETH 3304 as 'skin care preparations' meriting valuation under Section 4A of the Central Excise Act, 1944. The appeal against the said decision before the lower appellate authority met with rejection on the very same grounds and hence, the appellant is before us.

(2.) THE learned counsel for the appellant submits that it is not in dispute that the goods are manufactured under a licence issued under Drugs & Cosmetics Act, 1940 and the composition of the product is not disputed. As per the technical literature available on the subject matter, namely, 'Martindale - The Complete Drug Reference', aloes is an anthraquinone stimulant laxative used in homeopathic medicines and has curative properties in treatment of medical conditions such as acne, haemorrhoids, psoriasis, anaemia, arthritis, burns, cancer, depression, diabetes, glaucoma and so on. The US Pharmacopeia also refers to 'Aloe' as a drug having applications in dietary supplements and dermatology. The appellant had also adduced an expert opinion from Shri M.K. Pradhan, a technical adviser having expertise in medicinal formulations, wherein he has certified that 'Alovit Cream' contains active ingredients 'aloe extract' and 'tocopheryl acetate LP.' and has been formulated in a manner that ensures delivery of the two active ingredients to the required site of action i.e. skin, and has been designed to exhibit a therapeutic action which will complement the primary prescription used for the treatment of various skin disorders. Besides, the appellant had produced certificates from various practicing skin specialists wherein 'Alovit Cream' has been prescribed for curing skin diseases. The product literature also indicates that the cream is a complete therapy for dry skin/dermatitis/hyperpigmentation and is used in treatment of skin problems like psoriasis, atopic dermatitis, eczema, etc. Thus, from the technical literature and certificates from the people who are conversant with the product, it emerges that the product is a drug and not cosmetics. The learned counsel also relies on the decisions of the Hon'ble Apex Court and the High Court in the cases of Commissioner of Central Excise, Delhi v. Ishaan Research Lab (P) Ltd. - : 2008 (230) E.L.T. 7 (S.C.); Commissioner of Central Excise, Calcutta v. Sharma Chemical Works - : 2003 (154) E.L.T. 328 (S.C.) and Union of India v. G.D. Pharmaceuticals Ltd. - : 1998 (100) E.L.T. 24 (Cal.) affirmed by the Hon'ble Apex Court in, 1999 (108) E.L.T. A56 (S.C.), among others, in support of the above contentions. Accordingly, it is prayed that the classification as sought by the appellant be upheld and the classification adopted by the Revenue be set aside.

(3.) WE have carefully considered the submissions made by both the sides.