M/S. MULLER AND PHIPPS (INDIA) LTD. versus THE COLLECTOR OF CENTRAL EXCISE, BOMBAY-I

Citation: [2004] SUPP. 2 S.C.R. 39 · Decided: 05-05-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

> 
MIS. MULLER AND PHIPPS (INDIA) LTD. 
V. 
THE COLLECTOR OF CENTRAL EXCISE, BOMBAY-I, 
MAY 5, 2004 
[RAJENDRA BABU, CJ. AND G.P. MATHUR, J.] 
Central Excise Tariff Act, 1985-Tariff Heading 30.03 and 33.04-
Excise duty-Levy oF-Classification of Prickly Heat Powder and Processed 
Talc-As Proprietary medicines or cosmetics/toilet preparations-Held : 
A 
B 
When State authorities take up commodity taxation, Court is to be guided C 
by the manner of classification of goods and not by the etymological 
meaning of the product or expert's opinion thereto-On facts, products in 
question has been treated throughout by various departments as drug, has 
been utilised with reference to commercial parlance and understanding as 
drug and also for the purpose of Drug Act and Sales Act classified as drug, 
hence to be classified as medicinal preparations and not as toilet D 
preparations-Central Excise Act, 1944. 
Question arose with regard to the classification of Prickly Heat 
Powder and Processed Talc-whether as 'patent or proprietary 
medicines' or as 'cosmetics or toilet preparations" for the purpose of E 
excise duty. Collector (Appeals) held that in view of the medicinal 
ingredients in the product which are meant to cure the disease called 
Mi/aria Rubra/prickly heat, prickly heat powder is classifiable as a drug 
or a medicinal preparation under the erstwhile Tariff Item 14E (upto 
28.2.1986) and under Heading No. 30.03 (from 1.3.1986). Appellate F 
Tribunal took into account that the Central Excise Tariff is now based 
on Harmonized System Nomenclature (HSN) and the opinion and 
recommendation of the Committee that prickly heat powder is 
preparation for the care of skin cannot be brushed aside simply 
because similar products are manufactured or sold under drug licence G 
and held that the product is a preparation for the care of the skin and 
not medicament as claimed by the appellant-Company. Hence that 
present appeals. 
Appellant-Compaily contended that prickly heat powder contains 
range of medkines and are used only for the treatment and prevention H 
39 
40 
SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R. 
A of a skin ailment known as Mi/aria Rubra!prickly heat; that prickly 
heat powder is manufactured under a Drug Licence which is issued 
under the Drugs Act; that the Drug Controller has opined that due to 
the high content of boric add the product would be classifiable as drug; 
that the Central Government, Sales Tax Tribunal and also the 
B Pharmacology Department has held that the product was a drug; that 
from 1970 till 1985 prickly heat powders have been classified as 'Patent 
or Proprietary Medicines' and the Collector (Appeals) also held the 
same whereas the Tribunal set aside the order; and that in the 
commercial parlance the product is known and understood as patent 
C or proprietary medicine used for the prevention and treatment of the 
disease. 
Allowing the appeals, the Court 
HELD : I.I. In the matters where commodity taxation is taken 
D up by the State authorities the Court should be guided by the manner 
of classification of the goods which are brought to tax rather than the 
etymological of the product in question or expert's opinion thereto. 
146-81 
1.2. When the Central Excise Tariffs are based on internationally 
E accepted nomenclature fom1d in the Harmonized System Nomenclature 
(HSN), any dispute relating to tariff classification must so far as possible 
be resolved with reference to nomenclature indicated by HSN unless 
there be an express different intention by the Central Excise Tariff Act, 
1985 itself and when the Central Excise Tariff Act is enacted on the basis 
F and pattern of the HSN the same expression used in the Act must as far 
as practicable be construed to have the meaning which is expressly giwn 
to it in the HSN when there is no indi~ation in the Indian tariff of a 
different intention. However, in the instant case throughout the meaning 
given to prickly heat powder by the departments like Drug Controller 
G and Central Sales Tax authorities is that the product in question is a 
medicinal preparation. 147-G-H; 48-A-CI 
Collector of Centra! Excise, Shillong v. Wood Craft Products Ltd .. 
119961 3 sec 454, referred to. 
H 
1.3. Applying the principles enunciated in BPL Phurmaceuticals 
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MULLER AND PHIPPS (lNDIA) LTD. v. C.C.E. [RAJENDRA BABU, CJ.] 41 
Ltd. case and taking into consideration various circumstance as to the A 
manner in which prickly heat powder had been trea

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