Ayurvedic skin care preparations which cannot treat injury or ailment are to be classified as ‘cosmetics’ and not as ‘medicaments’ : AAAR
Facts: M/s Akanksha Hair & Skin Care Herbal Unit is a manufacturer of skin care preparations and had filed an application for Advance Ruling before the West Bengal AAR on the classification of 33 of its products. The Appellant had argued that its skin care preparations are Ayurvedic Medicaments meant for therapeutic or prophylactic uses and put up in packaging for retail sale, and entirely correspond to the description of goods under Tariff Head 3004 of Customs Tariff Act, 1975 (“Tariff”). The Hon’ble West Bengal AAR held that only preparations for the care of the skin namely, Rupam (Pimple Pack) and Pailab (Anti-Crack Cream), in the list submitted by the Appellant are classifiable as Medicament under heading 3004. Remaining products were not found to be offered primarily as medicaments and, therefore, not to be included under heading 3004. Further, no ruling was given in respect of 3 products which had not come into existence.
Issue Involved: Whether Ayurvedic Products manufactured by the Appellant, are classifiable under Chapter 33, or any other Chapter, or as medicaments under Chapter 30 of the Tariff.
Ruling: The Hon’ble AAAR, West Bengal vide its Order dated August 01, 2018, observed that to determine whether or not a product or a formulation is to be labelled as a “medicament” it is necessary to consider its efficacy in treating or remedying an “injury” an “ailment” or an “illness”. After detailed discussion on meaning of these terms, it was held that none of the descriptions given by the Appellant qualify for categorising the products as “medicaments” or “medicines” as they are not used in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings; rather they are more in tandem with the definition of ‘cosmetics’ as we find in the Drugs and Cosmetics Act, 1940, because none of the problems that these products treat can be classified as “injury” or “ailment”. Thus, the ruling of Hon’ble West Bengal AAR was modified to conclude that remaining 31 products of the Appellant, supplied or intended to be supplied, are not to be classified under Chapter 30, but are to be classified under Chapter 33 (Cosmetics) or Chapter 34 (Soaps), and are to be taxed accordingly.
Citation :  96 taxmann.com 243 (AAAR-WEST BENGAL)