2018 (8) TMI 772 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (16) G. S. T. L. 277 (App. A. A. R. – GST) – Challenge to Advance Ruling – Classification of Skin care preparations – 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 – in the Advance Ruling, it was held that other than 'Pailab' and 'Rupam', the remaining products mentioned in the list submitted by them are not offered primarily as medicaments and, therefore, not to be included under heading 3004.
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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?
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Held that:- As per the descriptions of the products printed on the labels of the products when packaged for retail sale and f
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Rakesh Kumar Sharma, Member And Ms. Smaraki Mahapatra, Member Present for the applicant: Sri Pradip Kumar Mukherjee, Authorised Representative, and Sri Anjan Dasgupta, Advocate This appeal has been filed by M/s. Akansha Hair & Skin Care Herbal Unit, holding GSTIN 19AAECA3926GlZQ (hereinafter referred to as the Appellant ), on 08.05.2018 against the Ruling dated 09.04.2018 pronounced by the West Bengal Authority for Advance Ruling. 2. The Appellant is a manufacturer of skin care preparations and had filed an application for Advance Ruling before the West Bengal Authority for Advance Ruling on the classification of 33 of its products, which are as follows: Sl. Name of the product Description 1 Baranga Brightens the skin all the more without black heads, pimples and scar. 2 Tanuruchi Controls excessive oil secretion and takes care of scar free face. 3 Twakamadhuri Keeps skin loss without freckles and spots. 4 Subarna Removes dead cells and black heads for oil skin. 5 Angarag Beautifi
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boils and pimples. 10 Swarnabho keeps skin soft, fair, glowing, stops pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discoloration and burning sensation of skin. Also helps growing of your baby 11 Komal Shree Keeps skin soft, fair, glowing, stop pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discoloration and burning sensation of skin. Also helps growing of our baby 12 Nabaroop (Aloe Vera and Chandan) Properly cleanses, exfoliates and moisturises the skin. Helps for removing make-ups and sunscreen which clogs pores. Strengthens the natural protection of the skin. Instantly enhances low and fairness. 1m roves the skin texture of skin and bod 13 Nabaroop (Rose and Cucumber) Properly cleanses, exfoliates and moisturises the skin. Helps for removing make-ups and sunscreen which clogs pores. Strengthens the natural protection of the skin. Instantly enhances low and fairness. 1m roves the skin texture of skin and bod 14 Nabaroop (Lem
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skin smooth, healthy and glowing. 19 Twaka Snigdha (Lemon) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. 20 Twaka Snigdha (Orange) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. 21 Twaka Snigdha (Neem) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oilyness. 22 Twaka Snigdha (Rose) Helps in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth. Helps to skin and tighten skin pores. Make skin soft and more elastic, reduces skin oiliness. 23 Sukhparash Prevents from pimples, blemi
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lab Anti-Crack Cream 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 (hereinafter referred to as the 'Tariff). 3. The West Bengal Authority for Advance Ruling (hereinafter referred to as WBAAR ) after hearing the matter and examining the documents decided vide its Ruling dated 09.04.2018 that: Preparations for the care of the skin namely, Rupam (Pimple Pack) and Pailab (Anti-Crack Cream), in the list submitted by the Applicant are classifiable as Medicament under heading 3004 of the Customs Tariff Act, 1975. Preparations listed as Swarnajyoti, Sunayana and Tarumitra-60 have not yet come into existence, and, therefore, no rulings are pronounced on their classification. The remaining products mentioned in the list submitted by them are not offered primarily as medi
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for each individual product. Authority for Advance Ruling is cautioned against accepting similar applications in future where multiple products are covered in a single application. However, since WBAAR had admitted the application and passed a Ruling, the Appeal filed is being taken up for disposal. 6. The Appellant has filed the Appeal on the following grounds: a. The Ruling of the WBAAR has erred in not passing a Ruling for products that have yet to come into existence. Under Section 95(a) advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in Sub Section (2) of Section 97 or Sub-Section (1) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; b. Classification is to be based on the true nature of the product and not on how they are offered; c. Classification is to be done on the settled principle of the Twin Test; d.
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t that the Ld. West Bengal Advance Ruling Authority has erred in not pronouncing its order on the products namely 'Swarnajyoti', 'Sunayana' and 'Tarumitra-60' as the products have not yet come into existence which is contrary to the definition of Advance Ruling as laid down under clause (a) of Section 95 GST Act, which specifically provides that supply of goods 'proposed to be undertaken' by an applicant also falls under the ambit of Advance Ruling. Hence, this Appellate Order will include Advance Ruling on the supply of goods proposed to be undertaken', namely Swarnajyoti, Sunayana and Tanumitra-60. 9. Central Tax (Rate) Notification No. 01/2017 dated 28.06.2017, under the Central Goods and Services Act, 2017 and Notification No FT-1125 dated 28.06.2017 under the West Bengal Goods and Services Tax Act, 2017, clearly state that Tariff item , sub-heading heading and Chapter shall mean respectively a tariff item, subheading, heading and chapter as spec
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roducts as medicaments. Reference has been made to the judgements passed by the Hon'ble Supreme Court of India in B.P.L. Pharmaceuticals Ltd. Vs. Collector [1995 (77) E.L.T. 485 (S.C.)] and Lohia Machines Ltd. vs. UOI & ORS [1987 (28) E.L.T. 234 (All.)]. The Appellant argued, citing the decision of the Hon'ble Tribunal in CCE, Pune vs. ESSEN Products (1) Ltd. [2006 (200) E.L.T. 342 (Tri. – Mumbai)], that packing is not indicative of classification under Chapter 33 of the Tariff as cosmetic or toilet preparation and that advertisement is not to be relied upon – essential character of the product is relevant. 11. The Appellant argued that the WBAAR pronounced their Ruling without considering the 'twin test' as settled by various pronouncements of the Hon'ble Supreme Court. They also argued that sole reliance on labels for classification is not lawful. The applicant also argued that the WBAAR has erred in law by classifying all items of talcum powder, sunscreen, mo
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a specified formulation . The American Heritage Medical Dictionary defines it as An agent that prompts recovery from injury or ailment; a medicine . World Health Organisation (WHO) defines medicine as the sum total of the knowledge, skills, and practices based on the theories, beliefs, and experiences indigenous to different cultures, whether explicable or not, used in the maintenance of health as well as in the prevention, diagnosis, improvement or treatment of physical and mental illness. 14. In other words, 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 . 15. Hence, it becomes imperative for us to look into the definition of injury . Miller-Keane Encyclopaedia and Dictionary of Medicine, Nursing, and Allied Health, Seventh Edition defines injury as harm or hurt; usually applied to damage inflicted on the body by an external force . Farlex Pa
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ckened mass of skin debris. Acne : Localized skin inflammation as a result of over activity of the oil glands at the base of specialized hair follicles. Acne happens when oil (sebaceous) glands come to life around puberty, when these glands are stimulated by male hormones that are produced in the adrenal glands of both boys and girls. Freckles : a small patch of light brown colour on the skin, often becoming more pronounced through exposure to the sun. Black Patches : Dark patches refer to the presence of several dark spots spread out over a specific point of the skin than the surrounding area. The notable change in colour is an indication that skin cells around that patch are producing more melanin than it is required. It can be caused by hormonal changes, post-inflammatory marks from acne or pimples, sun exposure, age spots and liver spots. Scarring : A mark left on the skin by healing of injured tissue. Exfoliation : It involves removal or peeling of the dead skin cells from the ski
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ce. 19. The Drugs and Cosmetics Act, 1940, defines cosmetic under clause (aaa) of Section 3 as under- cosmetic means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic; 20. The Indian Standard (I.S. 4707-2) published by the Bureau of Indian Standards, gives a list of substances which MUST NOT form part of the composition of cosmetic products . The above definition clearly signifies that products with ingredients including substances which are not listed in The Indian Standard (I.S. 4707-2) may be classified as cosmetics. Hence we cannot unequivocally accept that by virtue of their ingredients, the products qualify as medicaments and not as cosmetics. The Appellant submitted that four of its products, namely Romancho (Lavender), Romancho (Vani
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he purpose and use of the product needs to be ascertained before determining its nomenclature:- Romancho (Lavender/Vanilla/Kewra) are all labeled as Body Talc and the descriptions regarding their use on the retail packs are Feeling of freshness, increases luster of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples Komal Parash is labeled as Baby Body Talc and the description regarding its use on the retail packs are Feeling of freshness, increases luster of skin, gives relief from itching sensation and irritation of prickly heat, very helpful remedy in summer boils and pimples In other words, all the above four products are basically the same components, Talc or Talcum Powder to feel fresh, to increases the luster of skin, to give relief from itching sensation and irritation of prickly heat, and also claims to be very helpful as a remedy in summer boils and pimples 23. Talcum Powders are classified specifically und
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zing the skin, helping for removal of make-ups and sunscreen which clogs pores, helping in the normal firming and toning of skin along with hydrating the skin to make it glow, fresh and smooth, helping to skin and tighten skin pores, makes skin soft and more elastic, reducing excess skin oil, protecting from sun-burn injury. 25. None of the above descriptions 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 as already discussed in Para 14 and Para 15 above. 26. The General Explanation to Chapter 33 states that The products of headings 33.03 to 33.07 remain in these headings whether or not they contain subsidiary pharmaceutical or disinfectant
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included. 28. A review of the remaining items (27 in number) supplied by the Appellant, will help to classify them under respective Chapter headings, as per their description: Sl.No. Name of the product Classified under Reasons for classification 1 Baranga 33 Other powder 2 Tanuruchi 33 Face powder 3 Twakamadhuri 33 Face powder 4 Subarna 33 Face powder 5 Angarag 33 Face powder 6 Tanurima 33 Baby powder 7 Swarnabho 33 Keeps skin soft, fair, glowing, stops pre-mature ageing and wrinkling of skin, prevents sun burn rashes, dryness, discolouration and burning sensation of skin 8 Nabaroop (Aloe Vera and Chandan 34 Organic surface active products and preparations for washing the skin, in the form of liquid or cream 9 Nabaroop (Rose and Cucumber 34 Organic surface active products and preparations for washing the skin, in the form of liquid or cream 10 Nabaroop (Lemon) 34 Organic surface active products and preparations for washing the skin, in the form of liquid or cream 11 Nabaroop (Neem) 34
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