COMMISSIONER OF CENTRAL EXCISE, DELHI versus ISHAAN RESEARCH LAB (P) LTD. & ORS.

Citation: [2008] 13 S.C.R. 208 · Decided: 08-09-2008 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

[2008] 13 S.C.R. 208 
A 
COMMISSIONER OF CENTRAL EXCISE, DELHI 
V. 
ISHAAN RESEARCH LAB (P) LTD. & ORS. 
(Civil Appeal Nos.7357-7372 of 2001) 
B 
SEPTEMBER 8, 2008 
... 
[ASHOK BHAN AND V.S. SIRPURKAR, JJ] 
Central Excise Act, 1944: 
Third Schedule- Chapter 30, Sub-Heading 3003.30 and 
c Chapter 33 - Classification - Bio-cucumber, Bio-coconut, Bio-
costus, Bio-kelp,Bio-milk, Bio-margosa, Bio-peach, Bio-quice, 
Bio-saffron, Bio-soya, Bio-wheat, Bio-wintergreen and Bio-
walnut - HELD: Tribunal rightly classified these items as 
medicinal products covered under Chapter 30 - Burden was 
D on Revenue, but there has been no attempt on its part, to 
prove that the products were cosmetics - Besides, before 
~ 
Tribunal the expert analysed all the products as containing 
the elements of Ayurvedic medicinal value and all the items 
were produced under drug licence issued in terms of Drugs 
E and Cosmetics Act. 
s. 4 -
Valuation of excisable goods for purpose of 
charging excise duty -
Tribunal has rightly held that the 
companies to whom the assessee sold its product were not 
related person - Parties have further agreed to abide by the 
F guidelines provided for valuation of the products of assessee. 
~ 
s. 11-A(1) - Proviso - Extended period of limitation for 
raising the demand and imposing penalty - HELD: Products 
in the instant case having been held to be covered under 
Chapter 30, as 'Ayurvedic medicines', there is no need to go 
G into the question of limitation - Additionally, the products were 
comparable, if not identical to the products in a decided case 
-
There was no mis-statement of facts or suppression of 
material facts and the Tribunal has rightly held that proviso to 
.... 
s.11-A(1) is not applicable, and rightly set aside the demand. 
H 
208 
\ 
I 
COMM. OF CENTRAL EXCISE, DELHI v. ISHAAN 
209 
RESEARCH LAB (P) LTD. & ORS. 
In the instant appeals the Revenue challenged the A 
decision of the Customs, Excise and Gold (Control) 
Appellate Tribunal holding that 22 items manufactured 
by the assessee-respondents were classifiable as 
"Ayurvedic Medicines" under Central Excise Sub-
~ 
Heading 3003.30, liable to excise duty at the rate of 10% B 
advaloem, and not as "cosmetics" and "Toilet 
preparations" under Chapter 33 of Central Excise Tariff, 
liable to excise duty at the rate of 40% advalorem as was 
claimed by the Revenue; that IMPL and ILL(Mfwere not 
related persons and the price at which the assessee sold c 
the items to the said two companies would form the basis 
for determining the assessable value of the goods; and 
that the extended period of limitation was not applicable 
in all the cases. 
· 
During _the course of hearing, it was conceded on D 
behalf of the assessee that two items, namely '.'Bio-
Henna" and "Bio-Henna Leaf" would not fall under the 
classification "Ayurvedic Medicines" under Chapter 30; 
and on behalf of the Revenue it was conceded that four 
items, namely, "Bio-apple", "Bio-fruit", "Bio-mud" and E 
"Bio-myristica" would not be classifiable as cosmetics 
under Chapter 33. Further "Bio-Bhringraj" stood covered. 
as "Ayurvedic Medicine" under Chapter 30 in view of the 
decision of this Court. Thus, out of 22 items, the parties , · 
put forth their claims only with regard to 15 items, namely, 
F 
Bio Aloevera, Bio-cucumber, Bio-coconut, Bio-costus, 
Bio-kelp, Bio.milk, Bio-margosa, Bio-peach, Bio-pro, Bio-
quince, Bio-saffron, Bio-soya, Bio·-wheat, Bio-wintergreen 
and Bio-walnut 
Dismissing the appeals, the Court 
G 
HELD: 1.1 The products in question were rightly- held 
by CEGAT to be covered under Chapter 30 and not Chapter 
33 of the Central Excise Tariff. Before the Tribunal the expert 
opinion was pressed into se~ice. The expert analysed in H 
210 
SUPREME COURT REPORTS 
[2008) 13 S.C.R. 
A detail all these products and noted that the products 
contained the elements having Ayurvedic medicinal value. 
It was also noted rightly by the Tribunal that all these items 
were produced under the drugs licence issued under the 
Drugs and Cosmetics Act. [para 29] [233-D-E] 
B 
1.2 It was obvious from the labels of the products 
which were also inspected by the Court that there is a 
claim made in each of the fable of the medicinal properties 
of the product. It is also found that there was a specific 
claim that the items in question were not cosmetic 
C products. The common parlance test is not "be all and 
end all" of the matter. Even otherwise, after the decision 
in Shri Baidyanat

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