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

Citation: [2009] 5 S.C.R. 879 · Decided: 13-04-2009 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Disposed off

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

... 
[2009] 5 S.C.R. 879 
COMMISSIONER OF CENTRAL EXCISE, NAGPUR 
A 
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: 
B 
Classification - Dant Manjan Lal - Held: Is tooth powder c 
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 
E 
in tariff entries would not change character of the product. 
"\ 
Classification of product - Determining factor - Held: 
_1 '- User's understanding is relevant factor- It is important to see 
\ 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. 
F 
G 
-.... 
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 
879 
H 
880 
SUPREME COURT REPORTS [2009] 5 S.C.R. 
A 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 
8 eadem causa' and maxim 'interest republicae sit finis litium' 
- 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 
C 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 
D 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 
E 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. 
F 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, 
G 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 
H specified." Assessee claimed the benefit extended under 
-
,. 
) 
COMMISSIONER OF CENTRAL EXCISE, NAGPUR v. 
881 
BAIDYANATHAYURVED BHAWAN LTD. 
the said Notification and stopped paying duty on the 
A 
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 
C 
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 
D 
was not known as an Ayurvedic Medicine. The finding of 
the tribuna

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