ORDER
Chittaranjan Satapathy, Member (T)
1. Heard both sides. The issue in the present Appeals relates to the appropriate classification of the product SELSUN BLUE claimed to be preparation having therapeutic value in the use for the cure of diseases of the scalp, namely Saborrhoetic Dermatitis (popularly known as ‘Dandruff) and Tinea Versicolor. According to the appellants, the therapeutic properties are imparted to the product, by the presence of the active ingredient, Selenium Sulfide in a 1% w/v concentration. While the Appellants claim the product as classifiable under Tariff Heading 3003.10 of the First Schedule to the Central Excise Tariff Act, 1985 (hereafter, “the CETA”) as a “medicament”, the department contends that the product is classifiable under Tariff Heading 3305.99 of the CETA as a “preparation for use on the hair”. During the relevant period, the entries under the CETA stood as under :-
30.03 Medicaments (including veterinary 33.05 Preparations for
medicaments) use on the hair
303.10 - Patent or proprietary medicaments, 3305.99 - Other
than those medicaments which are exclusively
Ayurvedic, Unani, Siddha, Homoeopathic or
Biochemic.
2. The appellants also manufacture SELSUN which has Selenium Sul-fide in a 2.5% concentration, and in respect whereof, the Hon’ble Supreme Court, by its judgment in BPL Pharmaceuticals Ltd. v. Collector of Central Excise has conclusively determined the issue of classification under heading 3003 as a medicament.
3. The Department’s challenge to the classification claimed by the Appellants is on the following counts:
(a) Selenium Sulfide is present in a 1% concentration in SELSUN BLUE as against 2.5% in SELSUN which was held to be a medicament by the Hon’ble Supreme Court.
(b) Selsum Blue is sold over the counter and not solely against a prescription of a Registered Medical Practitioner.
4. The appellants contend :-
(i) The Indian Pharmacopoeia (1996) does not have an entry for Selenium Sulfide. The therapeutic quantity of Selenium Sulfide prescribed as per the US Pharmacopoeia is 1% to 2.5%. The USP Directory also recognizes both SELSUN and SELSUN BLUE as medicaments containing Selenium Sulfide in therapeutic quantities. It is also Indisputable that the Appellants sell the product SELSUN BLUE with the letters ‘USP’ to indicate the fact that the product is made in consonance with the standards prescribed in the US Pharmacopoeia.
(ii) The authoritative texts such as Goodman & Gilman. Martindales Extra Pharmacopoeia, Remington’s Pharmacopoeia etc., also clearly set out that the therapeutic quantity of Selenium Sulfide is 1% to 2.5% and SELSUN BLUE is listed as a product containing Selenium Sulfide in therapeutic quantities.
(iii) The appellants manufacture SELSUN BLUE under the Drugs Licence being Licence No. 675, and the Licence has been granted and renewed from time to time by the Drugs Controller, State of Maharashtra.
(iv) SELSUN BLUE is prescribed by Registered Medical Practitioners for the treatment of Dandruff and Tinea Versicolor as affirmed by various Registered Medical Practitioners in their Affidavits.
(v) The label pasted to and product literature put together with SELSUN BLUE also clearly bear out that the product is for the Medical Treatment of Dandruff and the inscription “POISON” to indicate that the product could have side-effects if abused by excessive/unregulated usage.
(vi) The product SELSUN BLUE is sold only through Medical Stores, is known to trade and commerce and is bought and sold as a medicinal preparation for the treatment of dandruff/tinea versicolor. It is settled law that in determining classification, the understanding of trade and commerce is an important guide.
(vii) The Hon’ble Supreme Court, in Commissioner of Central Excise v. Sharma Chemical Works 2003 (154) E.L.T. 328 (S.C.) has held that where the therapeutic properties of the product are not in dispute and the strength is also as prescribed by the appropriate pharmacopoeia, the mere fact that the product is sold across the counter and not against a prescription of a Registered Medical Practitioner or the fact that the percentage of medicament is less would not mean that the product is not a medicament. The Hon’ble Supreme Court further held that in determining classification the main criteria is the use the product is put to by the customers who use it. The ratio of the said judgment of the Hon’ble Supreme Court when applied in the facts of the present case, clearly warrants be classification of SELSUN BLUE as a medicament under heading 3003 of the CETA.
5. The appellants have also relied on the following judgments:-
(a) Sujanil Chemo Industries v. Commissioner of Central Excise 2005 (181) E.L.T. 206 (S.C.)
(b) Muller & Phipps (India) Ltd. v. Collector of Central Excise
(c) Dabur (India) Ltd. v. Commissioner of Central Excise 2005 (182) E.L.T. 290 (S.C.)
(d) Hagel Capsule Industries Limited v. Commissioner of Central Excise
(e) Sarvotham Care Ltd. v, Commissioner of Central Excise
(f) Kamal Chandravadan Shah v. Commissioner of Central Excise
6. The learned D.R. argues that mere certification by the Drugs control authorities is not sufficient to decide classification under the C.E.T. In this regard he cites the following circulars of the Board :-
(i) Circular No. 333/49/97-CX., dt. 10-9-97
(ii) Circular No. 360/76/97-CX., dt. 3-12-1997
7. We have considered arguments from both sides. We find that subheading 3003.10 covers patent or proprietary medicaments. The impugned product ‘SELSUN BLUE’ contains selenium sulfide in 1% concentration. The US Pharmacopoeia lists selenium sulfide of concentration 1% to 2.5%. Hence, Selsun Blue, in our view has to be held as a medicament following the decision of the Hon’ble Supreme Court in the case of BPL Pharmaceuticals (cited supra). As regards the second contention of the department that the product is sold across the counter, we are of the view that the appellants have effectively countered this contention by placing reliance on the Hon’ble Supreme Court’s decision in the use of Sharma Chemical Works (cited supra). In view of these two decisions of the Hon’ble Supreme Court and the fact that the impugned product contains the active ingredient Selenium Sulphide of a concentration mentioned in the US Pharmacopoeia, we are inclined to hold that the same is classifiable under subheading 3303.10 as contended by the appellants. Hence, we set aside the impugned order and allow the appeals with consequential benefit to the appellants.
(Pronounced in Court on 13-1-06)