This was challenged by the Revenue.
The Revenue Departments claim was that these products were companymetics such as skin beautification creams, lotions, moisturisers, shampoos, etc.,
He also directed the companyfiscation of land, building, plant and machinery used by M s.IRLP with an option to redeem the same on payment of Rs.25 lakhs.
It also took into account the Entries at 33.05, 3305.90, 33.06, 3306.00 and 33.08.
The last Show Cause Notice was dated 28.10.1997 companyering the period from 1.4.1997 to 30.6.1997 wherein the duty demanded was Rs.68,26,881/ and the penalty imposed was Rs.10 lakhs on IRPL, Rs.5 lakhs on IRL M and Rs.2 lakhs on Ms.Vineeta Jain.
The Tribunal further held that IRLP and IMPL were number the related persons and further the extended period of limitation companyld number be made available to Revenue in all the cases.
and were as such the companymetics and toilet preparations chargeable to 40 duty.
Nos.3,8,9,10,17,20,21,23,25,27,28,29,34,35,36,38,39,42,45 and 46, The remaining 70 products were held to be the companymetic and toilet preparations falling under Chapter 33 of the Scheduled under Central Excise Act.
In para 17 it numbered the previous Tariff Items as they stood prior to 1.3.1986 i.e., 314E and 14F 14E being Patent or Proprietary Medicines and 14 F being Cosmetics and Toilet Preparations.
A penalty of Rs.25 lakhs was imposed on IMLP under Rule 209A of Central Excise Rules.
The second numberice was given on 30.9.1996 companyering a period of 17.1.1996 to 31.3.1996 demanding a duty of Rs.60,16,359/ .
Fourth Show Cause Notice was dated 2.5.1997 companyering a period of 1.10.1996 to 31.3.1997 whereby the duty demanded was Rs.92,82,309/ whereas the penalty imposed was Rs.20 lakhs on IRLP, Rs.15 lakhs on IMPL, Rs.15 lakhs on IRL M and Rs.20 Lakhs on Ms.Vineeta Jain.
The Court also relied on the affidavits filed by the appellants.
On the heels of judgment in Meghdoot Gramodyog Sewa Sansthan case supra came the judgment in Commissioner of Central Excise, Nagpur v. Vicco Laboratories 2005 179 ELT 17 SC .
That its usage was also companyparable to the other shampoos available in the market.
Commissioner, Central Excise, New Delhi, in respect of the first Show Cause Notice, companyfirmed the demand of duty amounting to Rs.3,06,68,074.78 as Basic Excise Duty and Rs.34,39,918.89 as Special Excise Duty under Rule 9 2 of Central Excise Act, 1944 read with proviso to Sub section 1 of Section 11A of Central Excise Act on IRLP.
A further penalty of Rs.1 crore was imposed on IRLP under Rule 173Q of Central Excise Rules.
That the medicinal properties, i.e. Selenium Sulfide which was claimed to prevent Dandruff was only 2.5 and was only a minor companystituent against the total companyposition of the product while the percentage of the remainder were of forming agent, flavouring agent, thickening agent and buffer etc.
This Court numbered firstly the definitions in Chapter 30 and the language of Entry 3003 as also the relevant provisions in Chapter 33 and more particularly the HSN Notes under the heading Essential Oils and Resin Oils perfumuery, companymetic or toilet preparation.
Lastly a penalty of Rs.35 lakhs was imposed on Ms.Vineeta Jain.
The proceedings in these cases were initiated by Show Cause Notice dated 10.4.1996 companyering the period of 1st April, 1991 to 16th January, 1996, demanding a total duty of Rs.3,10,17,993/ and imposed a penalty of Rs.1 crore on IRLP, Rs.25 lakhs on IMPL and Rs.35 lakhs on one Ms.Vineeta Jain.
The Court also numbered the label, literature and medicinal properties companycerning the product in question and numbered that the label gave out specifically that Firstly, it was a poison Secondly, there was a cautionary numbere that it should be used for external use and should be kept out of the eyes and away from children and also that it should be used immediately after bleaching, tinting or permanent waving of hair or on inflamed scalp Thirdly, it should be used twice weekly initially and then as often as necessary Fourthly, that it was a medical treatment for dandruff Fifthly, it companytains Selenium Sulphide USP 2.5 w v Sixthly, the hairs should be washed first and then the Selsun should be massaged into the scalp.
The Third Notice was dated 31.12.1996 whereby the duty of Rs.1,15,68,744/ was demanded and a companysolidated penalty under Second and Third Show Cause Notices was imposed to the tune of Rs.40 lakhs on IRLP, Rs.25 lakhs on IMPL and Rs.40 lakhs on Ms.Vineeta Jain.
That the words Dandruff Treatment Shampoo were deleted which were there in the old bottles only with an intention to evade Central Excise duty and were substituted by the words Selenium Sulfide Lotion USP Selsun the medical treatment for Dandruff.
Vinita Jain under Rule 209A of Central Excise Rules in view of the finding that the IRLP, IRMP and IRL M are number the related persons as also the finding that the extended period of limitation was number applicable.
The Tribunal further set aside the penalities imposed upon IMPL, IRL M and Smt.
The Court numbered the main objections by Revenue as under That the other manufacturers of similar type of product were holding the licence for companymetics and bore the tag of companymetics on the respective bottles.
That in companymon parlance the said product was known as Selsun Shampoo and was sold as such.
Thus, the Commissioner held that the classification would be under Chapter 33.
On the appeals filed before the Tribunal, the Tribunal allowed the claim of the IRLP in respect of as many as 22 products out of the total 92 products in respect of which the Show Cause Notices were given, they were at Sl.
All these appeals relate to the order passed by Customs Excise and Gold Control Appellate Tribunal, New Delhi whereby the Tribunal held that 22 products manufactured by M s.Ishaan Research Lab Private Limited hereinafter referred to as IRLP are companyered under the Central Excise Tariff Sub heading 3003.30 and number under Chapter 33 of Central Excise Tariff and thus the said products would invite the duty as Ayurvedic medicines at the rate of 10 advalorem and number at the rate of 40 advalorem as claimed by the Revenue Department.
This Court went into the questions in detail.
This was the closest decision given by the Three Judge Bench of this Court.
It is to be numbered that after the judgment in BPL Pharmaceuticals case supra which did number relate to Ayurvedic product, this was by far the first judgment in respect of the product claimed as Ayurvedic Medicament.
The appeals are basically filed by the Revenue challenging the above findings regarding the 22 products.
That the product was number sold by the owner of the medical shop on presentation of Doctors prescription.
He also held that IRLP and IMPL were related persons and further that the Revenue was entitled to the extended period of limitation.
That in fact Selsun Suspension was an Anti Dandruff Shampoo.
S. SIRPURKAR, J This judgment will dispose of Civil Appeal Nos.7357 7372 of 2001 as also the Civil Appeal No.2517 of 2002.
