COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. SHREE BAIDYANATH AYURVED BHAWAN LTD

Citation: [2009] 5 S.C.R. 879

Court: Supreme Court of India

Bench: D.K. JAIN, RAJENDRA MAL LODHA

Case summary

COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. SHREE BAIDYANATH AYURVED BHAWAN LTD.pdf

Judgment text

[2009] 5 S. C. R. 879 COMMISSIONER OF CENTRAL EXCISE, NAGPUR II. SHREE BAIDYANATH AYURVED BHAW AN LTD. (Civil Appeal No. 4048 of 2001) APRIL 13, 2009 [D. K. JAIN AND R. M. LODHA, JJ. ] Central Excise Tariff Act, 1985: Classification - Dant Manjan Lal - Held: Is tooth powder and specifically covered by Chapter SH 3306 and not under Chapter SH 3003. 31 as medicament- It is used routinely for dental hygiene - By virtue of note 1(d) of Chapter 30, even if ... the product has some therapeutic _or medicinal prop~rties, it stands excluded from Chapter 30 - Common parlance test 0 continues to be determinative test for classification of product either medicament or cosmetic - Drugs and Cosmetics Act, 1940 - s. 3(a) - Interpretative Rules - Rule 3(a). Change in classification - Criteria for - Held: There has to be change in nature or use of the product - Mere difference in tariff entries would not change character of the product.

"\ Classification of product - Determining factor - Held: _ '- User's understanding is relevant factor- It is important to see 1 \ how user/consumer looks at a product and what is his perception in respect of such product - Common parlance test' continues to be determinative test of classification of product - Heading which provides most specific description is to be' preferred to headings providing a more general description. -.... Interpretation of statutes: Definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute - Section 3(a) of Drugs and Cosmetic Act, 1940 defines 'Ayurvedic, Sidha or Unani Drugs but that definition is not necessary to be imported in Central Excise Tariff Act. Maxims: Maxim 'Nemo debet bis vexari pro una et eadem causa' and maxim 'interest republicae sit finis litium' 8 - These maxims cannot be applied as rule of thumb in taxation matters.

The assessee is manufacturing a product named Dant Manjan Lal (DML). The product is a powder compounded with Geru, Peepall, Sonth, Kali Mirch, Tambakuh, Clove Oil, Camphor, Pepperment, Babul Chhal, Tumber Beej. Assessee claimed that DML is manufactured in accordance with the formulae given in Ayurved Sar Sangraha (an authoritative text on the Ayurved system of medicine) by using the ingredients mentioned therein. Ayurved Sar Sangraha is notified under the First Schedule of the Drugs and Cosmetics Act, 1940. It is also the case of the assessee that DML was sold in the name which is specified in Ayurved Sar Sangraha. Prior to 1975, the product DML was considered to be classifiable under Tariff Item 14E of the First Schedule of the Central Excise and Salt Act, 1944 which item covered medicines. Accordingly, it was not ,. subjected to levy of excise duty and exempted therefrom.

On March 1, 1975, Residuary Item 68 was incorporated in the Act, 1944 wherein all items not elsewhere specified in the tariff were liable to be classified. Assessee filed a fresh classification list and commenced paying excise duty as was leviable under Residuary Item 68 of the Act, 1944. On March 1, 1978, the Central Government issued an Exemption Notification No. 62178-CE whereby exemption was extended to " ..... all drugs, medicines, pharmaceuticals and drug intermediates not elsewhere specified. " Assessee claimed the benefit extended under BAIDYANATHAYURVED BHAWAN LTD. the said Notification and stopped paying duty on the product while filing fresh classification list. In March, 1980, Department issued notices to the assessee asking them to show cause as to why the product should not be subjected to tariff rate without 8 treating it as an Ayurvedic Medicine and without extending the benefit available under the Notification No. 62/78-CE. The matter came up before the Tribunal.

It held that in common trade parlance, DML is neither treated nor understood as an Ayurvedic Medicine and hence could not be classified as such, and hence was not eligible to exemption under Notification No. 62/78-CE. This order was challenged before this Court. It was held in *Baidyanath that the product DML is to be classified on the basis of the common trade parlance test and applying· that test, the tribunal was correct in its finding that DML was not known as an Ayurvedic Medicine. The finding of the tribunal that DML was toilet requisite was upheld. During the pendency of the appeals before this Court, Central Excise Tariff Act, 1985 was enacted which replaced the Schedule to the Act, 1944. Chapter 30 of the New tariff Act dealt with pharmaceutical products. '·-, Chapter Sub-heading 3003. 30 provided for no excise duty leviable on medicaments, including those used in ~ Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic \ System.

In October 1991, Board advised its field formations to classify the product as toilet requisite. The assessee approached the Board by way of representation putting forth the plea that after the introduction of New Tariff Act and the amendments made in 1996, there is a specific ~ definition of Ayurvedic Medicine and hence classification , of its product DML should be done on the basis of that \ definition alone and not the common trade parlance test. The Board relied on *Baidyanath and directed classification as toilet requisite. Department issued notice to assessee to show cause as to why DML be not classified as a toiletry under Chapter 33 of New Tariff Act. In view of conflicting opinions of different benches, matter was referred to larger bench of Tribunal which held that the product DML was classifiable under Chapter Heading 33. 06 of the New Tariff Act. The Department and assessee filed appeals before this Court.

Dismissing the appeals of assessee's and allowing appeals of Department, the Court HELD: 1. Merely because there is some difference in the tariff entries, the product will not change its character. Something more is required for changing the classification especially when the product remains the same. There cannot be justification enough for changing the classification without a change in the nature or a change in the use of the product. The exception being where Tariff Act itself provides for a statutory definition, obviously, the product has to be classified as per the definition. [Paras 30 and 31) [903-B, CJ . BPL Pharmaceuticals Ltd. v. Collector of Central Excise, Vadodra (1995) 3 SCC 1, relied on. 2. The description of goods cannot be treated as definition. Chapter Sub-heading 3003. 31 provides process for manufacture of certain medicaments including those used in Ayurvedic system and sale of the l same; it is not a definition clause.

Classification of a +-product, interpretative Rule 1 of rules for interpretation of the Schedule says, is to be determined according to the terms of the heading and any relative Section or Chapter Notes and provided such headings or Notes do not otherwise require. Chapter Sub-heading 3003. 31 is an entry double dash (--) occurring under the single dash (-) heading for medicament including those in Ayurvedic /1. BAIDYANATHAYURVED BHAWAN LTD. Systems. As per general explanatory Note 1 appended to rules for interpretation, single dash (-) indicates the said article or group of articles to be a sub-classification of the article or group of articles covered by the said heading and double dash (--) indicates, the said article or group of articles to be a sub-classification of the immediately preceding description of article or group of articles which has single dash (-). It is, thus, clear that Chapter Heading 30. 03 would cover every Sub-heading as well.

Therefore, to find out whether the product described against Subheading 3003. 31 is a medicament or not, aid to Note 2 of Chapter 30 for the purposes of Heading 30. 03 is necessarily called in. Note 2 to Chapter 30 defines medicaments for the purposes of Heading 30. 03 as products comprising two or more constituents which have been mixed or compounded together for therapeutic 0 or prophylactic uses or unmixed products suitable for ) such uses. The use of expression ~·uses" in Note 2 is not without significance and is surely distinct from the expression "properties" used in Note 1(d) of Chapter 30. The term "uses" brings within its comprehension, the act of user and, thus, there is merit in the submission that common parlance test is inbuilt in Chapter Heading 30. 03. [Para 34] [904-A-H; 905-A] Puma Ayurvedic Herbal (P) Ltd. v. Commissioner, Central Excise,Nagpur (2006) 3 SCC 266, relied on. Shree Baidyanath Ayurved Bhawan Ltd. v.

Collector of CenKraf Excise, Nagpur (1996) 9 SCC 402; BPL Pha~ceutical Limited v. Col/ector of Central Excise, Vadodra (1995) 77 ELT 500 (SC); Collector of Central Excise v. Andhra ,Sugar Limited (1989) Supp. 1 SCC 144; Oswal Agro Mills Ltd. v. Collector of Central Excise &Ors. 1993 (6) ELT 37 SC; Amrutanjan Ltd. v. Collector of Central Excise (1995) 77 ELT 500 SC; Commissioner of Central Excise, Calcutta v. Sharma Chemcial Works (2003) 154 ELT 328; Meghdoot Gramodyog Sewa Sansthan v. Commissioner of Central Excise, Lucknow (2004) 174 ELT 14 SC, referred to. 3. The primary object of the Excise Act is to raise revenue for which various products are differently classified in New Tariff Act. Resort should, in the 8 circumstances, be had to popular meaning and understanding attached to such products by those using the product and not to be had to the scientific and technical meaning of the terms and expressions used.

The approach of the consumer or user towards the product, thus, assumes significance. What is important to be seen Is how the consumer looks at a product and what Is his perception in respect of such product. The user's understanding is a strong factor in determination of classification of the products. The contention of the assessee cannot be accepted that because DML is manufactured exclusively in accordance with the formulae described in Ayurveda Sar Sangrah which is authoritative text on Ayurvedic system of treatment and is notified in the First Schedule to the Drugs and Cosmetics Act, 1940 and the said product is sold under the name 'Dant Manjan Lal' which is the name specified for the said product in Ayurveda Sar Sangrah, the common parlance test is not applicable. As a matter of fact, this contention is based on misplaced assumption that Chapter Sub-heading 3003. 31 by itself provides the definition of Ayurvedic Medicine and there is no_ requirement to look beyond.

[Para 38) [906-G-l(; 907-A-D] 4. Section 3(a) of the Drugs and Cosmetics Act, 1940 defines 'Ayurvedic, Sidha or Unani Drug' but that definition is not necessary to be imported in New Tariff Act. The definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute. The object of Excise Act is to raise BAIDYANATHAYURVED BHAWAN LTD. . ,-!. revenue for which various products are differently classified in New Tariff Act. [Para 41] [910-C] 5. There is no doubt that a specific entry must prevail over a general entry. This is reflected from Rule 3(a) of the general Rules of interpretation that states that .. heading which provides the most specific description l' shall be preferred to headings providing a more general description. DML is a tooth powder which has not been held to be Ayurvedic Medicine in common parlance in Baidyanath*.

Common parlance test continues to be one of the determinative tests for classi'ftcation of a product ' whether medicament or cosmetic. There being no change "\ in the nature, character and uses of DML, it has to be held to be a tooth powder - as held in Baidyanath*. DML is used routinely for dental hygiene. Since tooth powder is .. specifically covered by Chapter Sub-heading 3306, it has } to be classified thereunder. By virtue of Chapter Note 1(d) of Chapter 30 even if the product DML has some therapeutic or medicinal properties, the product stands excluded from Chapter 30. [Para 42] [910-E-G] 6. It is true that maxim Nemo debet bis vexari pro una et eadem causa is founded on principle of private justice as it states that no man ought to be twice put to trouble , if it appear to the court that it is for one and the same cause. The maxim Interest republicae sit finis litium 4concerns the State that law suits be not protracted. This maxim is based on public policy.

These maxims cannot be applied as a rule of thumb in the taxation matters. In the' matters of classification of goods, the principles that have been followed by the courts are that there may not be justification for changing the classification without a change in the nature or a change in the use of the ~ product; something more is required for changing the classification especially when the product remains the , . _ ' same. Earlier decision on an issue inter parties is a cogent factor in the determination of the same issue. The applicability of maxim Res judicata pro veritate occipitur in the matters of classification of goods has to be seen in that perspective. The interpretation given by this Court .. in Baidyanath* with regard to this product has been considered and applied by us after amendment because Chapter Sub-heading 3003. 31 does not contain definition of Ayurvedic Medicine and the product DML in nature, character and uses remains the same as it was prior to amendment.

[Para 45) [911-F-H; 912-A-B] Commissioner of Central Excise, Nagpur v. Vicco r. Laboratories (2005) 17 ELT 17 SC, referred to. .. __ Case Law Reference: "' (1995) 3 sec 1 relied on Para 30 ( (2006) 3 sec 266 relied on Para 35 (1996) 9 sec 402 referred to Para 3 (1995) 77 ELT 500 SC referred to Para 18 (1989) Supp. 1 SCC 144 referred to Para 19 ~ / 1993 (6) ELT 37 SC referred to Para 19 (1995) 77 ELT 500 SC referred to Para 19 (2003) 154 ELT 328 referred to Para 19 (2004) 174 ELT 14 SC referred to Para 19 (2005) 17 ELT 17 SC referred to Para 19 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4048 of 2001. ~ From the Judgment & Order dated 13. 12. 2000 of the .. Custom Excise and Gold (control) Appellate Tribunal West BAIDYANATH AYURVED BHAWAN LTD. Regional Bench at Mumbai against the impugned Final Order no. C-1/4292/WZB/200, in Appeal No. E/2237/99 Born. WITH C. A. Nos. 2396-2397 of 2003, 9739-9746 of 2003, 6691 •· of 2003, 1521 of 2003. K. Radhakrishnan, T. V.

Ratnam, Kiran Bhardwaj, Anil Katiyar and B. Krishna Prasad for the Appellant. , C. A. Sundram, Vivek Kohli, Ashwani Sharma, Rohini Musa, Abhishek Gupta, Sudeep Vijayan, Zafar and Anandh Kannan for the Respondent. The Judgment of the Court was delivered by • R. M. LODHA, J. 1. The only issue in this batch of thirteen civil appeals is in respect of classification of "Dant Manjan Lal" (DML) manufactured by M/s. Baidyanath Ayurved Bhawan Limited ('Baidyanath', for short). While Baidyanath contends that the product DML is a medicament under Chapter Subheading 3003. 31 of the Central Excise Tariff Act, 1985, the stand of the Department is that the said product is a cosmetic/ toiletry preparation/tooth powder classifiable under Chapter Heading 33. 06. ~\ 2. The true classification of the product DML has been i \ subject of fluctuating opinion among the benches of the ~ , Customs, Excise and Gold (Control) Appellate Tribunal (for short, 'Tribunal').

West Regional Bench of the Tribunal decided the classification in favour of Baidyanath and held that DML is classifiable under Chapter Sub-heading 3003. 31. The similar view has been taken by East Regional Bench of the Tribunal. However, the larger bench of the Tribunal to which the issue of classification of DML was referred, has held that DML is classifiable under Chapter Sub-heading 3306. 10. It is for this reason that the Department as well as Baidyanath have preferred separate appeals. ·' -. follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to • part only of the items in a set, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise > description of the goods.

j (b) Mixture, composite goods consisting of different materials or made up of different components, and goods put up in sets, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration. 4. Goods which cannot be classified. in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5.

For legal purposes, the classification of goods in the ·--t sub-headings of a heading shall be determined according to the terms of those sub-headings and any related Chapter Notes and, mutatis mutandis, to the above rules, ' on the understanding that only sub-headings at the same ' ' ~ level are comparable. For the purposes of this rule, the relative Section Notes also apply, unless the context otherwise requires. GENERAL EXPLANATORY NOTES ~ 1. Where in column (3) of this Schedule, the description -'of an article or group of articles under a heading preceded by "-" the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where, however, the description of an article or group of articles is preceded by"--", the said article or group of articles shall be taken • to be a sub-classification of the immediately preceding description of article or group of articles which has "-". "- 2.

............................................................. ··········· 26. Chapter 30 to the extent, it is relevant for the present matter, is as follows: "CHAPTER 30 PHARMACEUTICAL PRODUCTS NOTES 1. This Chapter does not cover: (a) ................. (b) .............. ·... (c) ................. (d) Prnparations of Chapter 33 even if they have therapeutic or prophylactic properties; . i-- (e) ................. (f) ................. t~ ·' COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. (g) ................. 2. For the purposes of the heading No. 30. 03, (i) 'Medicaments' means goods (other than foods or beverages such as dietetic, diabetic or fortified ,. foods, tonic beverages) not falling within heading ~ No. 30. 02 or 30. 04 which are either : (a) products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses; or (b) unmixed products suitable for such uses. 3............... J. 4. ·············· 5...............

6............... 27. Relevant portions in Chapter 33 is thus: CHAPTER 33 ESSENTIAL OILS RESINOIDS; PERFUMERY, COSMETIC OR TOILET PREPARATIONS .. ,..... ). NOTES 1........................................................... 2. Heading Nos. 33. 03 to 33. 08 apply, inter alia, to products, whether or not mixed (other than aqueous distillates and aqueous solutions of essential oils), suitable . _. for use as goods of these headings and put up in packings ·. with labels, literature of other indications that they are for use as cosmetics or toilet preparations or put up in a form ___. ,, clearly specialized to such use and includes products ' whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value. 3. ·················· 4.................. . Heading Sub- Description of goods Rate No. heading of ,. No. duty (1) (2) (3) (4) 33. 06 3306.

00 Preparations for 15% • oral-ur dental Hygiene, including dentifrices (for example toothpaste and Tooth powder) and denture Fixative pastes and powders" 28. In 1996-97, Chapter 30 to New Tariff Act came to be amended. Chapter Sub-heading No. 3003 now stands as under: "MEDICAMENTS (INCLUDING VETERINARY -{ . ,,. MEDICAMENTS) 3003. 10 -Patent or proprietary medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic 3003. 20- Medicaments (other than patent or proprietary) other than those medicaments which are exclusively Aurvedic, Unani, Siddha, Homoeopathic or Bio-chemic -Medicaments, including those used in Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic systems _j 3003.

31 - - Medicaments (including veterinary Medicaments) used in Ayurvedic, Unani, Siddha or Homoeopathic Systems, manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and .. Cosmetics Act. 1940 (23 of 1940) or ................. and sold under the name as specified in such book or pharma- .. l copoeia;" 29. Baidyanath's product DML has not been treated as Ayurvedic Medicine to qualify for exemption from payment of excise duty under Notification No. 62/78-CE dated March, 1, 1978 by this Court. This Court approved common parlance test applied by the Tribunal that DML could not be described as · ! definition of Ayurvedic Medicine? We do not think so. What is provided in column 3 of Schedule is description of goods 9. 1995 Supp. (3) sec 1. ~ ' against sub-heading 3003. 31. We are afraid description of goods cannot be treated as definition.

There is merit in the contention of the learned senior counsel for the Department that Chapter Sub-heading 3003. 31 provides process for manufacture of certain medicaments including those used in Ayurvedic system and sale of the same; it is not a definition .. clause. Classification of a product, interpretative Rule 1 of rules ). , for interpretation of the Schedule says, is to be determined according to the terms of the heading and any relative Section or Chapter Notes and provided such headings or Notes do not otherwise require. Chapter Sub-heading 3003. 31 is an entry double dash(-) occurring under the single dash (-) heading for medicament including those in Ayurvedic Systems.

As per general explanatory Note 1 appended to rules for interpretation, single dash (-) indicates the said article or group of articles to be sub-classification of the article or group of articles covered • by the said heading and double dash (--) indicates, the said article or group of articles to be a sub-classification of the immediately preceding description of article or group of articles which has single dash (-). It is, thus, clear that Chapter Heading 30. 03 would cover every Sub-heading as well. Therefore, to find out whether the product described against Sub-heading 3003. 31 is a medicament or not, aid to Note 2 of Chapter 30 for the purposes of Heading 30. 03 is necessarily called in. Note 2 to Chapter 30 defines medicaments for the purposes of Heading 30. 03 as products comprising two or more constituents which have been mixed or compounded together . ;; for therapeutic or prophylactic uses or unmixed products suitable for such uses.

The use of expression "uses" in Note 2 is not without significance and is surely distinct from the expression "properties" used in Note 1(d) of Chapter 30. The term "uses" brings within its comprehension, the act of user and, thus, there is merit in the submission of the learned senior counsel for the Department that common parlance test is inbuilt \ . ,,,. / in the authoritative textbooks on Ayurveda ? " 36. In Puma Ayurvedic Herbal (P) Ltd. , the question that 1o. (2006) 3 sec 266. ,A~ arose for consideration before this Court was whether the products manufactured by the appellant therein were covered ·under the category of medicaments or cosmetics. The following products were under consideration: 1. Puma neem facial pack (Neemal), 2. Puma anti-pimple herbal powder (Pimplex), 3. Puma herbal facial pack (Herbaucare), 4. Puma herbal remedy .. for facial blemishes, 5. Puma herbal massage oil, 6. Puma J. herbal massage oil for women, 7. Puma hair tonic powder (Sukeshi), 8.

Puma scalp tonic powder (Scalpton), 9. Puma anti-dandruff oil (Dandika), 10. Puma shishu rakshan tel, 11. Puma neem tulsi. This Court referred to various decisions of this Court and held: "From the above judgments it follows that the law is settled on the twin test for determination of classification of a product. We have already found that the twin test is • satisfied in the present case regarding most of the items under consideration. " 37. Applying twin test for determination of classification of products (including common parlance test), this Court in Puma Ayurvedic Herbal (P) Ltd. held that items 1,2,3,4,7,9,10 & 11 were medicaments while items 5,6 & 8 were liable to be classified as cosmetics under Chapter sub-heading 33. 04. 38. We endorse the view that in order to determine whether product is covered by 'cosmetics' or 'medicaments' or in other A words whether a product falls under Chapter 30 or Chapter. 33 : twin test noticed in Puma Ayurvedic Herbal (P) Ltd.

, continue to be relevant. The primary object of the Excise Act is to raise revenue for which various products are differently classified in New Tariff Act. Resort should, in the circumstances, be had to popular meaning and understanding attached to such products by those using the product and not to be had to the scientific and technical meaning of the terms and expressions used. The '"--, approach of the consumer or user towards the product, thus, assumes significance. What is important to be seen is how the consumer looks at a product and what is his perception in BAIDYANATHAYURVED BHAWAN LTD. [R. M. LODHA, J. ] respect of such product. The user's understanding is a strong factor in determination of classification of the products. We find it difficult to accept the contention of the learned senior counsel for Baidyanath that because DML is manufactured exclusively ,.

in accordance with the formulae described in Ayurveda Sar Sangrah which is authoritative text on Ayurvedic system of ~. treatment and is notified in the First Schedule to the Drugs and Cosmetics Act, 1940 and the said product is sold under the name 'Dant Manjan Lal' which is the name specified for the said product in Ayurveda Sar Sangrah, the common parlance test is not applicable. As a matter of fact, this contention is based on misplaced assumption that Chapter Sub-heading 3003. 31 by itself provides the definition of Ayurvedic Medicine and there is no requirement to look beyond. ;. 39. West Regional Bench of the Tribunal in its order dated } 13. 12. 2000 which is subject matter of Civil Appeal 4048/2001 observed thus : "The Drugs and Cosmetic Act, 1940 provides for licence to be obtained for manufacture of Ayurvedic, Sidha, Homoeopathic and Unani medicines. Technical Advisory Board to advise Central and State Government on technical matters.

Among the members of this Board are persons well versed in ayurvedic medicines, including teacher in Dravya Guna and Kalplana and a practitioner 1. in ayurvedic medicine. It also provides for a Ayurvedic, Sidha, and Unani Drugs Consultant Committee. The manufacture of ayurvedic medicament is subject to ·supervision and checks by officers appointed to carry out the provisions under the Drugs and Cosmetic Act, 1940. Section 3 (a) of the Drugs and Cosmetics Act, 1940 -... ,_. :.. { defines "Ayurvedic, Sidha or Unani Drug" as follows: Ayurvedic, Sidha or Unani drug" includes all medicines intended for internal or external use for or in the diagnosis, ~ treatment, mitigation or prevention of disease or disorder 908 SUPREME~URT REPORTS [2009] 5 S. C. R. "'-' inhuman beings or animals and manufactured exclusively in accordance with the formulae described in the (' authoritative books of "Ayurvedic, Sidha or Unani Tibb system of medicine, specified in the First Schedule.

" A comparison of this definition and the entry now • contained in heading 3003. 30 of the Tariff shows that the J_ two are virtually identical for the purpose of both the Drugs and Cosmetics Act and the Tariff, after its amendment, the medicament which is made exclusively in accordance with the formulae described in the First Schedule to the Act is to be considered as ayurvedic medicament. The effect of insertion of the new entry in the tariff is that to bring it on a par with the Drugs and Cosmetics Act, 1940. The term "ayurvedic medicament" in the tariff will " have the same meaning as the meaning in the Drugs and Cosmetics Act. Therefore, if the product under l consideration conforms to the requirements specified in that Act and the tariff, it will be entitled to be so classified. There would be no requirement that the Central Excise authorities must independently test it for its efficacy as medicament by apply the provisions of Note (2) to the Chapter.

It must be emphasized that these considerations were not present before the Supreme Court which passed . r its orders on the classification of Dant Manjan Lal. The Tribunal, and on appeal the Supreme Court, was concerned with the classification of the goods under Item 14E of the earlier Central Excise Tariff. The Tribunal has therefore rightly applied the test as to whether the product was a medicament, as is normally understood by persons in the trade, was shown to possess the therapeutic or )'-_A prophylactic properties, was demonstrated as to be medicament by being prescribed for a limited period, for '""""' a specific disease or disorder. By virtue of the amendment made to the tariff, these considerations cannot be gone • . J into. The judgment of the Supreme Court therefore cannot be a deciding factor in determining its classification under the heading as it now stands. This in fact is the view that has been expressed by the Commissioner (Appeal), Patna, ,.

whose order was cited by the advocate for the appellant. ). We therefore hold that the product was rightly classifiable under heading 30. 03 as claimed by the appellant. " We do not agree. The approach of the West Regional Bench .. • is fallacious in what we have indicated above as it overlooks and ignores common parlance test which is one of the well recognized tests to determine whether the product is classifiable as medicament or cosmetic and that has been consistently followed by this Court including with regard to this ~ very product. It also overlooks the well-settled legal position that without a change in the nature or a change in the use of the ~· . ·; product and in the absence of a statutory definition, the product ) will not change its character. The product DML remains the same in its composition, character and uses. We have already held above that Sub-heading 3003.

31 does not define ' Ayurvedic Medicine and, therefore, there cannot be any justification enough for changing the classification of the product DML which has not been held to be Ayurvedic Medicine by this Court. 40. The learned senior counsel for Baidyanath heavily ~ relied upon the statement of the Finance Minister during the parliamentary debate on the question of levy of excise duty on Ayurvedic medicines. In the entire debate there is no reference to the product DML with which we are concerned. The part of statement of Finance Minister reads,'........... there is no excise duty on Ayurvedic Medicines manufactured according to the Ayurvedic formulae, some medicines appears to be Ayurvedic '--'"\ medicines. ' The Finance Minister also stated, '........ he must . raise the dispute on that. It will be decided by the Collector. It '· will be decided by the appeliate authority. There is a method to decide it. ......... ' VVe are afraid the statement made by the ....

Finance Minister in the Parliament does not advance the case of the assessee at all insofaras classification of DML is concerned as method to decide classification has rightly been observed to be within domain of the authorities. ,. • 41. True it is that Section 3(a) of the Drugs and Cosmetics A Act, 1940 defines 'Ayurvedic, Sidha or Unani Drug' but that definition is not necessary to be imported in New Tariff Act. The definition of one statute having different object, purpose and scheme cannot be applied mechanically to another statute. As stated above, the object of Excise Act is to raise revenue for which various products are differently classified in New Tariff Act. 42. There is no doubt that a specific entry must prevail over ~ general entry. This is reflected from Rule 3(a) of the general Rules of interpretation that states that heading which provides -l the most specific description shall be preferred to headings providing a more general description. DML is a tooth powder I..

which has not been held to be Ayurvedic Medicine in common ~ 1 parlance in Baidyanathl • We have already observed that common parlance test continues to be one of the determinative tests for classification of a product whether medicament or cosmetic. There being no change in the nature, character and uses of DML, it has to be held to be a tooth powder - as held in Baidyanathl1. DML is used routinely for dental hygiene. Since F tooth powder is specifically covered by Chapter Sub-heading 3306, it has to be classified thereunder. By virtue of Chapter Note 1(d) of Chapter 30 even if the product DML has some therapeutic or medicinal properties, the product stands excluded from Chapter 30. 43. The learned senior counsel for Baidyanath relied upon the judgment of this Court in Vicco Laboratories to show that >'---~ in Baidyanath 11, no tests for classification were laid down. First, in Baidyanath 11, common parlance test applied by the Tribunal _,.. has been approved.

Second, and more importantly, with regard to the very product (DML}, this Court held that it could not be BAIDYANATHAYURVED BHAWAN LTD.. [R. M. LODHA, J. ] ~-J ' classified as Ayurvedic Medicine and rather the product is toilet requisite. Baidyanath 11, no doubt relates to old Tariff period __, -I i. e. prior to enactment of new Tariff Act but since the product in \I its composition, character and uses continues to be the same, ... even after insertion of new sub-heading 3301. 30, we have ~ already held that change in classification is not justified as . A.. common parlance test continues to be relevant for classification. Vicco Laboratories is of no help to the assessee. 44. In what we have already discussed above, it is not necessary to refer to other decisions cited by the learned Senior Counsel for Baidyanath. Be it noted here that Mr. C. A.

Sundaram, learned Senior Counsel submitted before us that matters should be decided by this Court as raising neat question of law about classification of product DML on the available material and any further inquiry or remand was . J unnecessary. ~ 45. Before we part with the case, we may address to the plea of res judicata raised by the learned Senior Counsel for the Department. Mr. K. Radhakrishnan pressed into service few legal maxims in this regard. It is true that maxim Nemo debet bis vexari pro una et eadem causa is founded on principle of private justice as it states that no man ought to be twice put to trouble if it appear to the court that it is for one and the same cause. The maxim Interest republicae sit finis litium concerns the State that law suits be not protracted. This maxim is based -\ on public policy. In our opinion, these maxims cannot be applied as a rule of thumb in the taxation matters.

In the matters of classification of goods, the principles that have been followed by the courts - which we endorse - are that there may not be justification for changing the classification without a change in the nature or a change in the use of the product; something more is required for changing the classification especially when . t ·~ the product remains the same. Earlier decision on an issue inter parties is a cogent factor in the determination of the same issue. The applicability of maxim Res judicata pro veritate occipitur in the matters of classification of goods has to be seen in that perspective. The interpretation given by this Court 1 in Baidyanath 1 with regard to this product has been considered and applied by us after amendment because Chapter Sub-heading 3003. 31 does not contain definition of Ayurvedic Medicine and the product DML in nature, character • and uses remains the same as it was prior to amendment. 46.

As a result of the foregoing discussion, appeals of Baidyanath must fail and are dismissed. The Department's appeals are allowed. The parties shall bear their own costs. D. G. Appeals disposed of. > .. )