CX- Classification - Care or Cure - medicament or cosmetic - 'Moisturex', is prescribed by dermatologist for treating dry skin conditions - is medicament: Supreme Court
By TIOL News Service
NEW DELHI, AUG 20, 2013: CARE or cure', is the clue for the resolution of the lis arising in these cases. If the product by name ‘Moisturex' is held to be a medicament for cure, the decision goes in favour of the assessee and if the product is held to be one for care of the skin, the decision benefits the Central Excise. The Tribunal has held in favour of the assessee and, thus, the Central Excise is in appeals.
It is the contention of the counsel for the Central Excise Department - appellants that the product ‘Moisturex' is mainly used for care of the skin and thus, they are to be classified as cosmetic or toilet preparations and are to be treated under Heading 33.04. It is further contended that even if such cosmetic products contain certain subsidiary pharmaceutical contents or even if they have certain subsidiary curative or prophylactic value, still, they are to be treated as cosmetics only. It is also contended that the product is sold across or under the counter and the same can be purchased without prescription of a medical practitioner and hence it is not medicament.
On the other hand, it is submitted on behalf of the assessee that the very presence of pharmaceutical substances will change the identity of the product since such constituents are used not for care of the skin but for cure of certain diseases relating to skin.
Following the guiding principles from several judgements, the Supreme Court observed,
++ Firstly, when a product contains pharmaceutical ingredients that have therapeutic or prophylactic or curative properties, the proportion of such ingredients is not invariably decisive. What is of importance is the curative attributes of such ingredients that render the product a medicament and not a cosmetic.
++ Secondly, though a product is sold without a prescription of a medical practitioner, it does not lead to the immediate conclusion that all products that are sold over / across the counter are cosmetics. There are several products that are sold over-the-counter and are yet, medicaments.
++ Thirdly, prior to adjudicating upon whether a product is a medicament or not, Courts have to see what the people who actually use the product understand the product to be. If a product's primary function is "care” and not "cure”, it is not a medicament. Cosmetic products are used in enhancing or improving a person's appearance or beauty, whereas medicinal products are used to treat or cure some medical condition. A product that is used mainly in curing or treating ailments or diseases and contains curative ingredients even in small quantities, is to be branded as a medicament.
In the present case, the Supreme Court observed,
"In the case of ‘Moisturex', there is no dispute that the said cream is prescribed by the dermatologist for treating the dry skin conditions and that the same is also available in chemist or pharmaceutical shops in the market. The cream is not primarily intended for protection of skin. The ingredients in the cream, the pharmaceutical substances do show that it is used for prophylactic and therapeutic purposes. The Central Excise Tariff Act has unambiguously clarified as to what is a medicament for curing an ailment relating to skin. Heading 33.04 dealing with beauty or make-up preparations and preparations for the care of the skin has specifically excluded medicaments. There is also an indication under the same entry that medicinal preparations used to treat certain complaints are to be provided under the Heading 30.03 (medicaments) or 30.04 (products containing pharmaceutical substances used for medical, surgical, dental or veterinary purpose)."
Tribunals, having regard to the pharmaceutical constituents present in the cream ‘Moisturex' and its use for the cure of certain skin diseases, had rightly held that the same is a medicament liable to be classified under the Heading 30.03 (medicament). Thus, there is no merit in these appeals. They are accordingly dismissed.
(See 2013-TIOL-38-SC-CX)
