2026-VIL-379-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Classification - Ayurvedic medicines or Cosmetics and toiletry preparations - The appellant company was engaged in manufacture of Ayurvedic proprietary medicines, cosmetics and toiletry preparations without obtaining Central Excise Registration and clearing the goods without payment of duty - Whether the goods manufactured by the appellant company are Ayurvedic medicines classifiable under Chapter 30 or cosmetics/toiletry preparations classifiable under Chapter 33 of the Central Excise Tariff Act - HELD - Based on the documents produced by the appellant company, including the Ayurvedic drug license, GMP certificate, and opinion from the Directorate of ISM Drugs Control, it is concluded that the appellant company was manufacturing only Ayurvedic medicines. The onus is on the Revenue to prove that the goods are not Ayurvedic medicines, which has not been discharged in the present case. The Supreme Court in Commissioner of Central Excise Kolkata v. Sharma Chemical Works has held that mere sale across the counter without prescription does not make a product a cosmetic, and the main criteria is the use to which the customer puts the product - the Revenue has not produced any test report or test results with regard to the products in question. In that view, it cannot be termed that appellant-company is manufacturing cosmetics and toiletry preparations - The products are Ayurvedic medicines classifiable under Chapter 30 - The demands of duty confirmed against the appellants, along with interest, imposition of penalties on all the appellants and confiscation of the seized goods are not sustainable and set aside - The appeals are allowed
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