Fact: Pharmasia Ltd. was engaged in the manufacture of ‘Smyle Thanda Tel’. The label specifically referred to the product as a cool hair oil and detailed its contributions for relieving headache, fatigue, stress and providing sound sleep. It was not mentioned on the packing of the product that the same was to be sold under the prescription of a physician. And he classified the said product under Heading No. 30.04 as pharmaceutical preparation on the ground that it had a license from the Department of Ayush for manufacture and sale of this product.
Issues Involved: The petitioner is before the CESTAT for getting judgement in respect of following:
- Whether ingredients of the product are indicated in the authentic ayurvedic texts; and
- Whether it is known as ayurvedic medicine by the people who used it.
Held: The Hon’ble CESTAT of Hyderabad in the case of Pharmasia Ltd. vs. Commissioner of Customs, Central Excise & Service Tax, Hyderabad-IV vide order no. A/30800/2018 dated July 3, 2018 stated that there is no doubt that the ingredients of the product in question are mentioned in authentic ayurvedic texts. As far as the users are concerned, there is nothing on the packet to show that the product is meant for daily use. It shows that it gives relief from headache, fatigue and stress. In an identical case, the Hyderabad Bench of the Tribunal in the case of Nuzen Herbal (P.) Ltd. v. CC, CE & ST held that the product should be classified as ayurvedic medicine. There is no reason to take a different view in the instant case. Therefore, the product in question is rightly classifiable under heading no. 30.04 as ayurvedic medicine and therefore, demand is not sustainable. Consequently, the interest and penalties also do not survive. In conclusion, we find that the Order-in-Appeal needs to be set aside.