B.P.L. PHARMACEUTICALS LTD versus COLLECTOR OF CENTRAL EXCISE, VADODARA

Citation: [1995] 3 S.C.R. 1235 · Decided: 04-05-1995 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

j 
B.P.L. PHARMACEUTICALS LTD. 
A 
v. 
COLLECTOR OF CENTRAL EXCISE, V ADODARA 
MAY 4, 1995 
[P.B. SAWANT AND K. VENKATASWAMI, JJ.] 
B 
Central Excise Tariff Act, 1985-Tariff Schedule-Sub-headings Nos. 
3305.90 and 3003.l'f-C/assification of Selenium Sulfide Lotion 
U.S.P.-Wliether medicine or cosmetic product-Selenium Sulfide the only 
active ingredient used but constituting only 2.5% of the entire solution-Used C 
for treatment of skin disease 'seborrhoeic dermatities' commonly known as 
dandruff-Label and literature showed it was for medicinal usi-Classijied 
as medicine under the Central Excise Tariff Act, 1944-Held, it is classifiable 
as medicine. 
D 
The appellant was manufacturer of 'Selenium Sulfide Lotion U.S.P.' 
which contain 2.5% of Selemium Sulfide which was the only active in· 
gredient. 97.5% of the lotion consisted of waier, surfactant and inter 
stabilizer. The product was used for treatment of skin disorder 'sebor-
rhoeic dermatitis' more commonly known as 'dandruff' and 'tinea 
versicolour'. The Food and Drug Atlministration had certified the product E 
as drug within the meaning of Section 3(b) of the Drugs and Cosmetics 
Act. The label of the product described it as a poison and a drug. It further 
advised use of the product as per the direction or physician. The literature 
relating to the product was addressed to physicians describing the product 
and the result of various studies relating to the product. The product was F 
being marketed through chemists. 
· The product was classified as a medicine unaer the Central Excise 
and Salt Act, 1944 and the said classification was upheld by the Central 
Board of Excise and Customs. However, after coming into force of the 
Central Excise Tariff Act, 1985, the product was classified as a "prepara- G 
tion for use on the skin" under sub-heading No. 3305.90 by the order of the 
Assistant Collector on the ground that Selenium Sulfide had only sub-
sidiary curative and prophylactic value . in the solution and therefore 
Chapter Notes No. 2 of Chapter 33 of the Central Excise Tariff Act, 1985 
was attracted and the product was cosmetic and not a medicine. On H 
1235 
1236 
SUPREME COURT REPORTS 
(1995) 3 S.C.R. 
A appeal, the Collector of Central Excise (Appeals) set aside the order of the 
Assistant Collector and held that the product was classifiable under 
sub-heading No. 3003.19 as a medicament. The respondent preferred an 
appeal to the CEGAT against the order of the Collector. 
In separate proceedings relating to the confiscation of the product 
B as they were allegedly not accounted for in the statutory RG-1 Register, 
the Additional Collector, Central Excise held that the product was a 
cosmetic and fell under sub-heading No. 3305.90 of the Central Excise 
Tariff Act 1985. The Additional Collector held that Selenium Sulfide was 
only a minor constituent of the solution and the product was commonly 
C known, bought and sold as 'selsun shampoo'. Being aggrieved, th~ appel-
lant preferred appeal to the CEGAT. 
The CEGAT by a common order in appeals of both the appellant as 
well as the respondent held that the product would fall under sub-heading 
No. 3305.90 of Chapter 33. The CEGAT, apart from concurring with the 
D reasons given by the Assistant Collector and the Additional tollector, also 
held that classification of the product as a drug under the Central Excise 
and Salt Act, 1944 was not conclusive as under the old Act of 1944 the tariff 
heading corresponding to the sub-heading No. 3305 covered 'preparation 
for the care of the hair' whereas under the new Act of 1985 sub- heading 
E No. 3305 covered 'preparation for use on the hair'. 
Hence the present appeals. 
Allowing the appeals, this court 
F 
HELD : 1. Having regard to the preparation, label, literature, char-
acter, common and commercial parlance, understanding and the earlier 
discussions of the Central Board of Excise and Customs, the product 
would fall under sub-heading 3003.19. [1260-E) 
2. The product in question is not intended for cleansing, beautifying, 
G promoting attractiveness or altering appearance. The product in question 
is intended as a medicine for curing the disease 'Tinea Versicolor' and as 
such ~pplied to the skin whenever necessary apart from curing dandruff 
by applying on the scale. It is admitted fact that even bald persons suffer 
dandruff and that being the position the view taken by the CEGAT that 
H the product will fall under the heading preparation for us

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