LexM/S. ALPINE INDUSTRIES versus COLLECTOR OF CENTRAL EXCISE, NEW DELHI.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
MIS. ALPINE INDUSTRIES A v. -t COLLECTOR OF CENTRAL EXCISE, NEW DELHI. JANUARY 14, 2003 [M.B. SHAH AND D.M. DHARMADHIKARI, JJ.] B v Central Excises and Salt Act, 1944; Section 35 L(b)/Central Excise Tariff Act, 1985; Headings 30.03 and 33.04: Classification of product- Principles-Held, Terms and expressions used in tariff generally understood c by its popular meaning by its user and not by its scientific/technical meaning-- Use of the product by a particular group of personnel would not be determinative of nature of the product- Commercial parlance theory applies ~ for determination of nature of product. Classification of product 'Lip Salve '-Medicament or preparation for D skin care under the Heading 30.03 or 33.04-Held, product Lip Salve is a protective cream against skin irritants-Conforms to description of a preparation for the care of the skin other than medicament-Hence falls under entry 33.04-lnterpretation of Statutes. Appellant-assessee manufacturing the product 'Lip Salve' claimed it to be classifiable under the Heading 30.03 of the Cer.tral Excise Tariff E Act for payment of excise duty. The Customs Excise & Gold (Control) Appellate Tribunal by majority held it to be classifiable under the Heading 33.04 as a 'preparation for skin care' and not a 'medicament'. Hence the present appeals. F It was contended for the assessee that the product 'Lip Salve' is a 'medicament' and it is being supplied exclusively to Defence Department for use by military penonnel posted at high altitude for treatment of lips. On behalf of Revenue, it was submitted that the product 'Lip Salve' was being used for proteetion of lips and skin against damage caused by natural G factors; and that the drugs licence mentioned it to be a 'licence for ointment and cream for external application as a non-pharmacopoeia item'. ,,.~ ·~ Dismissing the appeals, the Court HELD: 1.1. It is well established that in interpreting tariff entries H 313 314 SUPREME COURT REPORTS [2003] I S.C.R. A in taxation statute like Excise Act, the primary object is to raise revenue and for that purpose various products are differently classified. The terms and expressions used in tariff are not to be understood in its scientific and technical meaning l;mt have to be understood by their popular meaning. 1316-F) B Shree Baidyanath Ayurved Bhavan Ltd v. Collector of Central Excise, Nagpur & Ors., 11996) 9 SCC 402, relied on. 1.2. It is firmly established that on the question of classification of product under Central Excise Tariff Act, "commercial parlance theory" C has to be applied. It is true that the entire supply by the appellant of its product "Lip Salve" has been to the Defence Department for use of military personnel but that would also not be determinative of the nature of the product for classifying it. (317-D-E] 1.3. It is found that the product is a protective/preventive preparation D for chapping of lips. The product 'Lip Salve' is not only suitable for use of soldiers operating in high altitude areas but also it is of use for every one as a protection from dry, cold weather and sun rays. The product essentially is protective of skin of lip. It is. lip care product and not a 'me.dicament'•Merely because it has some curative effect on cracked or chopped lips it is not seen as a 'medicament': It is neither prescribed by E any doctor nor obtainable from the Chemist or Pharmaceutical shops in the market. 1317-G, HJ F 1.4. In accordance with the rules for interpretation of the Schedule under the Central Excise Tariff Act, 1985, for the purpose of classification, 'chapter notes' can be taken aid of for understanding the various entries under different Headings of the Tariff. Preparations covered by Chapter 33 even if they have 'therapeutic or prophylactic properties' are excluded from Chapter 30. 'Medicament' has been defined as 'goods which are .. either products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic use'. On G a reading of relevant notes of Chapter 30 under Heading 'Pharmaceuticaa Products', it is clear that preparations which fall under Chapter.33 even if they have therapeutic or prophylactic properties are not covered under Heading 30.03 as 'medicaments'. Thus_, the product 'Lip Salve' is a kind of "barrier cream" or a protective cream against skin irritants~ It clearly falls under entry 33.04 as it confor
Excerpt shown. Read the full judgment & AI analysis in Lexace.