# B.P.L. PHARMACEUTICALS LTD v. COLLECTOR OF CENTRAL EXCISE, V ADODARA - **Citation:** [1995] 3 S.C.R. 1235 - **Court:** Supreme Court of India - **Decided:** 1995-05-04 - **Case number:** Civil Appeal Nos. 25162517 of 1994 - **Bench:** P.B. Sawant, K. Venkataswami - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/b-p-l-pharmaceuticals-ltd-v-collector-of-central-excise-v-adodara-12984 - **Pages:** 26 ## Headnote B Central Excise Tariff Act, 1985-Tariff Schedule-Sub-headings Nos. 3305.90 and 3003.l'f-C/assification of Selenium Sulfide Lotion U.S.P.-Wliether medicine or cosmetic product-Selenium Sulfide the only active ingredient used but constituting only 2.5% of the entire solution-Used C for treatment of skin disease 'seborrhoeic dermatities' commonly known as dandruff-Label and literature showed it was for medicinal usi-Classijied as medicine under the Central Excise Tariff Act, 1944-Held, it is classifiable as medicine. D The appellant was manufacturer of 'Selenium Sulfide Lotion U.S.P.' which contain 2.5% of Selemium Sulfide which was the only active in· gredient. 97.5% of the lotion consisted of waier, surfactant and inter stabilizer. The product was used for treatment of skin disorder 'seborrhoeic dermatitis' more commonly known as 'dandruff' and 'tinea versicolour'. The Food and Drug Atlministration had certified the product E as drug within the meaning of Section 3(b) of the Drugs and Cosmetics Act. The label of the product described it as a poison and a drug. It further advised use of the product as per the direction or physician. The literature relating to the product was addressed to physicians describing the product and the result of various studies relating to the product. The product was F being marketed through chemists. · The product was classified as a medicine unaer the Central Excise and Salt Act, 1944 and the said classification was upheld by the Central Board of Excise and Customs. However, after coming into force of the Central Excise Tariff Act, 1985, the product was classified as a "prepara- G tion for use on the skin" under sub-heading No. 3305.90 by the order of the Assistant Collector on the ground that Selenium Sulfide had only subsidiary curative and prophylactic value . in the solution and therefore Chapter Notes No. 2 of Chapter 33 of the Central Excise Tariff Act, 1985 was attracted and the product was cosmetic and not a medicine. On H 1235 1236 SUPREME COURT REPORTS (1995) 3 S.C.R. A appeal, the Collector of Central Excise (Appeals) set aside the order of the Assistant Collector and held that the product was classifiable under sub-heading No. 3003.19 as a medicament. The respondent preferred an appeal to the CEGAT against the order of the Collector. In separate proceedings relating to the confiscation of the product B as they were allegedly not accounted for in the statutory RG-1 Register, the Additional Collector, Central Excise held that the product was a cosmetic and fell under sub-heading No. 3305.90 of the Central Excise Tariff Act 1985. The Additional Collector held that Selenium Sulfide was only a minor constituent of the solution and the product was commonly C known, bought and sold as 'selsun shampoo'. Being aggrieved, th~ appellant preferred appeal to the CEGAT. The CEGAT by a common order in appeals of both the appellant as well as the respondent held that the product would fall under sub-heading No. 3305.90 of Chapter 33. The CEGAT, apart from concurring with the D reasons given by the Assistant Collector and the Additional tollector, also held that classification of the product as a drug under the Central Excise and Salt Act, 1944 was not conclusive as under the old Act of 1944 the tariff heading corresponding to the sub-heading No. 3305 covered 'preparation for the care of the hair' whereas under the new Act of 1985 sub- heading E No. 3305 covered 'preparation for use on the hair'. Hence the present appeals. Allowing the appeals, this court F HELD : 1. Having regard to the preparation, label, literature, character, common and commercial parlance, understanding and the earlier discussions of the Central Board of Excise and Customs, the product would fall under sub-heading 3003.19. [1260-E) 2. The product in question is not intended for cleansing, beautifying, G promoting attractiveness or altering appearance. The product in question is intended as a medicine for curing the disease 'Tinea ## Text _Characters 0–39,197 of 53,809. This is a partial read: ask again with offset=39197 for what follows._ j B.P.L. PHARMACEUTICALS LTD. A v. COLLECTOR OF CENTRAL EXCISE, V ADODARA MAY 4, 1995 [P.B. SAWANT AND K. VENKATASWAMI, JJ.] B Central Excise Tariff Act, 1985-Tariff Schedule-Sub-headings Nos. 3305.90 and 3003.l'f-C/assification of Selenium Sulfide Lotion U.S.P.-Wliether medicine or cosmetic product-Selenium Sulfide the only active ingredient used but constituting only 2.5% of the entire solution-Used C for treatment of skin disease 'seborrhoeic dermatities' commonly known as dandruff-Label and literature showed it was for medicinal usi-Classijied as medicine under the Central Excise Tariff Act, 1944-Held, it is classifiable as medicine. D The appellant was manufacturer of 'Selenium Sulfide Lotion U.S.P.' which contain 2.5% of Selemium Sulfide which was the only active in· gredient. 97.5% of the lotion consisted of waier, surfactant and inter stabilizer. The product was used for treatment of skin disorder 'seborrhoeic dermatitis' more commonly known as 'dandruff' and 'tinea versicolour'. The Food and Drug Atlministration had certified the product E as drug within the meaning of Section 3(b) of the Drugs and Cosmetics Act. The label of the product described it as a poison and a drug. It further advised use of the product as per the direction or physician. The literature relating to the product was addressed to physicians describing the product and the result of various studies relating to the product. The product was F being marketed through chemists. · The product was classified as a medicine unaer the Central Excise and Salt Act, 1944 and the said classification was upheld by the Central Board of Excise and Customs. However, after coming into force of the Central Excise Tariff Act, 1985, the product was classified as a "prepara- G tion for use on the skin" under sub-heading No. 3305.90 by the order of the Assistant Collector on the ground that Selenium Sulfide had only subsidiary curative and prophylactic value . in the solution and therefore Chapter Notes No. 2 of Chapter 33 of the Central Excise Tariff Act, 1985 was attracted and the product was cosmetic and not a medicine. On H 1235 1236 SUPREME COURT REPORTS (1995) 3 S.C.R. A appeal, the Collector of Central Excise (Appeals) set aside the order of the Assistant Collector and held that the product was classifiable under sub-heading No. 3003.19 as a medicament. The respondent preferred an appeal to the CEGAT against the order of the Collector. In separate proceedings relating to the confiscation of the product B as they were allegedly not accounted for in the statutory RG-1 Register, the Additional Collector, Central Excise held that the product was a cosmetic and fell under sub-heading No. 3305.90 of the Central Excise Tariff Act 1985. The Additional Collector held that Selenium Sulfide was only a minor constituent of the solution and the product was commonly C known, bought and sold as 'selsun shampoo'. Being aggrieved, th~ appellant preferred appeal to the CEGAT. The CEGAT by a common order in appeals of both the appellant as well as the respondent held that the product would fall under sub-heading No. 3305.90 of Chapter 33. The CEGAT, apart from concurring with the D reasons given by the Assistant Collector and the Additional tollector, also held that classification of the product as a drug under the Central Excise and Salt Act, 1944 was not conclusive as under the old Act of 1944 the tariff heading corresponding to the sub-heading No. 3305 covered 'preparation for the care of the hair' whereas under the new Act of 1985 sub- heading E No. 3305 covered 'preparation for use on the hair'. Hence the present appeals. Allowing the appeals, this court F HELD : 1. Having regard to the preparation, label, literature, character, common and commercial parlance, understanding and the earlier discussions of the Central Board of Excise and Customs, the product would fall under sub-heading 3003.19. [1260-E) 2. The product in question is not intended for cleansing, beautifying, G promoting attractiveness or altering appearance. The product in question is intended as a medicine for curing the disease 'Tinea Versicolor' and as such ~pplied to the skin whenever necessary apart from curing dandruff by applying on the scale. It is admitted fact that even bald persons suffer dandruff and that being the position the view taken by the CEGAT that H the product will fall under the heading preparation for use on the hair is \ • i .. B.P.L PHARMACEUTICALS LTD. v. C.C.E. 1237 not sustainable. (1258-F) 3.1. In order to attract note 2 to chapter 33 of the Central Excise Tariff Act, 1985, the product must first be a cosmetic, the product should be suitable for use as goods under heading 33.03 to 33.08 and they must A be put in packing as labels, literature and other indications showing that they are for use as cosmetic or toilet preparations. Contrary to the above B in the present case none of the requirements are fulfilled. (1256-FJ 3.2. In the present case the labels of the product give the warning, precaution and directions for use making it different from that of ordinary shampoo which will not contain such warning or precaution for use. [1258-H, 1259-A) c 4.1. The reasons given by the Authorities that the product contains 2.5% w/v of Selenium Sulfide which has only a subsidiary curative or prophylatic value is without substance. The position is that therapeutic quantity permitted as per technical references including U.S. Phar- D macopoeia is 2.5%. Anything used in excess is likely to harm or result in adverse effect. The important factor is that Selenium Sulfide is the main ingredient and is the only active ingredient. (1256-F, G) 4.2. Addition of insignificant quantity of perfume to suppress the smell will not take away the character of the products as drug or medicine. E [1260-CJ 5.1. Notwithstanding the fact that the appellants had described the product as Selsun Shampoo, the Central Board of Excise and Customs had classified the same as patented proprletory medicine. The respondents have accepted the same. Therefore, there is no force in the submission that F the product must be equated with shampoo. (1256-B, CJ 5.2. That the product is understood in the common and commercial parlance as a patent and proprietory medicine was also, found by the Central Board of Excise and Customs as early as in 1981 and accepted by the Excise Authorities. There is no good reason to change the classification G merely on the ground of coming into force of the Central Excise Tariff Act, 1985 without showing more that the product has changed its character. (1259-H, 1260-A, 1259-F) Indian Metals and Ferro Alloys Ltd. v. Collector of Central Excise, (1991) 51ELT165 SC, relied on. H 1238 SUPREME COURT REPORTS [1995] 3 S.C.R. A CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 25162517 of 1994. From the Judgment and Order dated 29.10.93 of the Central Excise and Salt Act, 1944 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in O.Nos. 336 & 337 of 1993 in A.No. E/610/88-6 & B E/1935/89-C. Ravinder Narain, S. Shroff, Ms. Amrita Mitra, Nitinbhai, Ranjan Narain and Sonu Bhatnagar for the Appellant. M. Gaurishankar Murthy, S.D. Sharma and V.K. Verma for the C Respondent. The Judgment of the Court was delivered by K. VENKATASW AMI, J. These two appeals preferred under Section 35L of the Central Excise and Salt Act, 1944 are directed against the orders D of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as the 'CEGAT' for short} in order nos. 336 and 337/93C dated 29.10.93. By the orders impugned, the CEGAT has upheld the classification of the product manufactured by the appellants on behalf of their Principals, Abbott Laboratories (India) Limited, Bombay and marketed E under the brand name 'Selsun' (hereinafter called as the 'Product') as a cosmetic under sub-heading 3305.90. Brief facts are the following : The appellants have a factory as 39 G.I.D.C., Vapi, Bulsar and are p engaged in the manufacture of 'Selenium Sulfide Lotion U.S.P.' containing 2.5% Selenium Sulfide w/v. The said product was manufactured by the appellants under a loan licence form the Abbott Laboratories in accordance with Abbott's specifications, raw materials and packing materials and quality control. The said product was sold under the Abbott Laboratory's brand name 'Selsul)'. It is claimed that 'Selenium Sulfide' is the only active G ingredient and it is used in the required therapeutic quantity, i.e. 2.5% w/v and the other ingredients merely serve the purpose of a bare medium. It is not seriously disputed that the product namely, 'Selsun' is prescribed by physicians for the treatment of skin diseases known as 'Seborrhoeic Dermatitis' commonly known as 'dandruff and 'Tinea Versidolour' which H is caused by an organism known as 'Pytyriasis versicolour'. This product ' I B.P.L.PHARMACEUTICALSLID.v. CC.E. [K. VENKATASWAMI,J.] 1239 has been described and held out to be a drug or a medicinal product and A 1 is not held out to be a cosmetic or toilet preparation. In support of this claim, the appellants have produced the label and the literature connected with this product. Details in the label and also the literature will be referred to at the appropriate place. It is also claimed that this product is considered to be an ethical product in medical literature and the same should B be used under medical advise. It is also claimed that the product is manufactured under a Drug _, . licence dated 20th September 1981 issued by the Food and Drug Administration. The said Administration has given a certificate certifying that 'Selsun' is a drug within the meaning of Section 3(b) of the Drugs and c Cosmetics Act. It is the case of the appellants that Selsun is not available in the Departmental Stores, but only with Chemists who have a licence under the Drug and Cosmetics Act to sell the same. Abbott Laboratories send their literature only to physicians for their recommendations to their patients. To support the stand taken by the appellants that the product is D a drug/medicine they have filed affidavits of chemists stating that the I product is a patent and proprietary product and that the chemists require a valid drug licence to buy, stock and sell the same. Normally it is sold to the customers who come with a prescription for Selsun from a Registered Medical Practioner. In addition to that, the appellants have also filed letters from Doctors and users of the Product specifically stating that E Selsun is a useful product in the treatment of the diseases already mentioned above. ~· It is an admitted fact that this product prior to 28.2.1986 (i.e. before the coming into force of the Central Excise Tariff Act, 1985) was classified F as a drug under item 14E of the First Schedule to the Central Excise and Salt Act, 1944. As a matter of fact an issue was once raised whether the product in question and fall under the head of 'riiedicine' or 'cosmetic' and the Central Board of Excise and Customs by its detail~d and exhaustive order dated 17.1.1981 held that the product was a drug or a medicine and G the reasons for coming to that conclusion as given by the Board will be \ referred to later on while discussing the issue. After the coming into force of the Central Excise Tariff Act, 1985, the appellants filed a classification list dated 10.3.1986 before the Assistant Collector, Central Excise, Bulsar classifying the product falling under H 1240 SUPREME COURT REPORTS [1995] 3 S.C.R. A sub-heading 3003.19. The Assistant Collector provisionally accepted the same subject to the result of chemical test for which the product was sent. After receiving the report and after hearing the appellants the Assistant Collector by order dated 30.12.1987 held that the product in question will fall uuder sub-heading 3305.90 and not under 3003.19 as claimed by the B appellants. The reasons for coming to that conclusion by the Assistant Collector were the following: c D E F G H "As per the arguments putforth by the party at the time of personal hearing I also referred the technicaVchemical literature of the product and as per the information on the container of the product the selenium sulfide USP is 2.5% which is very small proportion looking to the following other ingredients: Surfactant 17.0% Inter stabilizer 5.2% and water 75.3% and thus as a whole selenium sulfide has got very subsidiary curative or prophylactic value as to other ingredients have in proportion of 97.5% will have the substantial effect. It is also further revealed from the Cosmetics-Science and Technology edited by Edward Sangairal at page 647. The most recently developed preparation of this type is the detergent suspension 'Selsun' which is used in conjunction with the hair cleaning process to counteract seborrhoeic scalp condition. The suspension itself is an effective germistatic agent but the prime reason for its success may be that each use of selsun demands a 5 to 10 minutes cleaning massage. Such a scalp cleaning routine is a very effective 'antidandruff or antibacterial treatment. The preparation of selsun suspension is shown in formula: Selenium disulphide 2.5% Surfactant 17.0% Inter stabilizer 5.2% Water 75.3% I I B.P.L.PHAb!ACEUilCALSLTD.v. C.C.E [K. VENKATASWAMI,J.] 1241 and also Selenium sulfide lotion also figures in U .S.P XX page-721 A ' wherein, it is shown to contain a suitable buffer, detergent and despersing agent. It is further stated on page 5 of the CosmeticScience and Technology and 'Undoubtedly, many products conform to the definitions of both drugs and cosmetics under the Act, such as complex remedies, acna remedies, hormone preparations, B antiperspirants and many other preparations which can logically be called both drugs and cosmetics. " . Now as per Chapternotes No. 2 of Chapter 33 of Central Excise Tariff Ac~ 1985 heading No. 3303 to 33.08 illler alia apply and include products. Whether or not they contain subsidiary phar- c maceutical or antiseptic constituents or are held out as having subsidiary ·curative Prophylactic value, thus as discussed in the foregoing paras. The product under questions having subsidiary curative and prophylactic value is classifiable under sub-heading No. 3305.90. D Further, considering the question why 'Selsun suspension' is not classifiable as medicament under Chapter 30, it will be interesting to refer to Note No. 1( d) of Chapter 30 of Central Excise Tariff Act, 1985 which inter a/ia provides that Chapter 30 does not cover of preparation of Chapter 33 even if they have therapeutic E or prophylactic properties. Further more rule 3(b) of interpretation of Schedule of Central Excise Tariff Act, 1985 states that when goods are not classifiable .. by reference to 3(a) or 3(b) they shall be classified under the sub-heading which 1Jccurs last in numerical order among those F which equally merit consideration." The officers of the Departmem during a check of the premises of the appellants on or about 7.11.1986 found that a quantity of 17950 bottles of 60 ml. each were offending goods liable to confiscation under the Central G Excise law as the goods were found to have been not accounted for in the ' statutory RG-1 Register though in fully manufactured and marketable ' condition. A show cause notice was issued on that ground. The matter was heard by the Additional Collector, Central Excise before whom the appellants contended that the goods subjected for confiscation were not fully prepared ones and therefore there was no violation of any of the provisions H 1242 SUPREME COURT REPORTS [1995] 3 S.C.R. A of the Central Excise Law and the goods in question were classifiable under Chapter 30 as a drug/medicine and they will not fall under Chapter ' 33 as claimed by the Department. The Additional Collector by order dated 21.12.1987 held that the product will fall under Chapter 33 and the goods were found in a fully B prepared manner and, therefore, the confiscation was proper and a fine of Rs. 35,000 was imposed in lieu of confiscation. A penalty of Rs. 25,000 was also imposed on the appellant. The Additional Collector, Central Excise gave the following reasons in support of his conclusion that the product would fall under sub-heading 3305.90:- c D E F G "(a) That the other manufacturers of similar type of product (i.e. Selsun suspension of Mis. B.P.L. Pharmaceuticals Pvt. Ltd., Va pi) are in possession of licence for 'cosmetics' and evidently mentioned on the respective bottles. (b) That the medicinal properties (i.e. Selenium Sulfide) meant for preventing "Dandruff' comes form 2.5% of Selenium Sulfide which is at a minor constituents as against the total composition of the product and the remaining percentage are of farming agent, flavouring agent, thickening agent and buffer etc." (c) That the "Selsun Suspension" is an "Anti-Dandruff" and is properly formulated "Shampoo"; • ( d) That the usage of the said "Selsun Suspension" is equivalent to other shampoos available in the market; ( e) That in common parlance the said Selsun Suspension is commonly known, bought and sold as "Selsun Shampoo' and not as "Selsun Suspension" or "Lotion!!; (I) That if the said product is P. & P. Medicines then naturally the said product could have been sold by owner of the medical shop on presentation of valid Doctor's prescription; (g) That with intention to evade Central Excise duty, the said M/s. Abbott Laboratories (India) Ltd., Bombay have H delivered/removed the words "Dandruff Treatment Shampoo" I I . . ' B.P.L.PHARMACEUTICALSLTD.v. C.C.E. [K VENKATASWAMI,J.) 1243 in the old bottles as mentioned in new bottles "Selenium A Sulfide Lotion U .S.P. Selsun the medical treatment for Dandruff". (h) That the goods in question were filled in the respective bottles of 60 ml. on 31.10.86 at 14.00 hrs. hence the goods have been completely manufactured in all respect and as per the conB tents of the panchnama which has been agreed by the Director, Shri J.T. Shah, in his statement dated 27.11.1986. As such the seizure effected is correct and the plea that the goods placed under seizure remains to be rubber stamped with date of manufacturing, both number and date of expiry is not C acceptable." Aggrieved by the orders of the Assistant Collector and the Additional Collector of Central Excise, the appellants preferred Appeals to the Collector of Central Excise (Appeal) and CEGAT respectively. The First Appellate Authority by order dated 20.2.1989 found that the product in question will fall under Chapter 30 and not under Chapter 33 as held by the ASsistant Collector, Central Excise. He gave the following reasons: D E 'The ASsistant Collector arrived at his conclusion that Selsun has subsidiary value on· the proportion of the ingredients of Selsunwhich are as under:- Selenium disulphide 2.5% Surfactant l'l.0% Inter stabilizer 2.5% Water· 75.3% He. further observed that the other ingredients will h,ave the substantial aspect. On !he contrary it is seen that the sel~nium sulphide is the only active ingredient in the preparation and that the other ingredients merely serve the purpose of base, medium F G .and the dispersing agent. H 1244 SUPREME COURT REPORTS (1995] 3 S.C.R. A As per Chapter Nate 2 to Chapter 33 those i\ems or products which contain only subsidiary pharmaceutical or antiseptic con- \ stituents or have only subsidiary curative or prophylactic value will only be covered under Chapter 33.Jn the instant case the appellant adduced evidence contained in the standard technical works on B the subject, the opinion of the technical experts and the fact that the product is known among the people who deal in it, to show that selsun is essentially a medicine only and, therefore, it cannot be classified in Chapter 33 as a cosmetic. It is rightly classifiable as medicine falling under Chapter heading 3003.19.' . . c Aggrieved by the above said order of the first Appellate Authority, the respondent preferred an appeal to the CEGAT. The appellants also filed Appeal to the CEGAT as noticed earlier against the order of the Additional Collector dated 21.12.1987. The Tribunal by a common order, while holding that the confiscation was not legal reversed the conclusion D of the Collector (Appeals) Central Excise who held that the product in question will fall under Chapter 30 and not under Chapter 33. In other words, the Tribunal concurred with the reasonings given by the Assistant Collector as well as the Additional Collector for classifying the product in question under sub-heading 3305.90. The CEGAT apart from accepting the reasons given by the Assistant Collector and the Additional Collector E . in their separate orders for holding that the product in question will fall under sub-heading 3305.90 also held that the classification of the subject goods as a medicine under the old tariff will not be conclusive of classification of the said goods under the new tariff (3305.90) since the earlier tariff heading covered, inter a/ia, "preparation for the care of the hair ..... includF ing scharnpoos whether or not containing soap or organic surface active agents" and the corresponding heading of the new tariff reads 'preparation for use on the hair' including shampoos whether or not containing surface active agent. Further the new tariff incorporates the rules of interpretation which were not there under the old trariff." Aggrieved by that the present G appeals are filed by the appellants. The respondent has not filed any appeal against that portion of the , order of CEGAT holding the confiscation as bad. Therefore, the only issue which is common in both these appeals is whether the product 'Selenium Sulfide Lotion U.S.P.' - 'Selsun' is classifiable as 'medicine' under subH heading 3003.19 as contended by the appellant or is clamifiable as ,, B.P.L. PHARMACEUTICALS LID. v. C.C.E. [K. VENKATASWAMI,J.] 1245 'cosmetic' under sub-heading 3305.90 as claimed by the respondent. A Mr. Ashok Desai, learned Senior counsel appearing for the appellants took us through the orders of the authorities below including the Tribunal and also the earlier order of the Central Board of J;xcise and Customs dated 17.1.1981. According to the learned counsel the Tribunal B has misdirected itself in construing the scope of Chapters 30 and 33 in general and in particular in understanding the Chapter notes and also the interpretation clause. The learned counsel reiterated as his submission the reasoning given by the Central Board of Excise and Customs in its order dated 17.1.1981. He also invited our attention to the numerous affidavits and letters filed by the Chemists, Doctors and the Customers. He conC tended that except advancing arguments that those affidavits and letters should not be relied upon as they are stereotyped no other concrete material was placed before the Court by the respondent to discredit them. According to the learned counsel in the common as well as commercial parlance the product will not be considered as a shampoo to be brought D under Chapter 33. The learned counsel also cited decisions in suport of his arguments which will be referred to at the appropriate place. Learned counsel appearing for the Department contending contra submitted that the Tribunal was right in understanding the scope of the Chapters as well as the Chapter notes and the interpretation clause. Merely E because under the earlier tariff item, the product was classified as a drug, the same cannot be pressed into service notwithstading the new classification brought in by the Central Excise Tariff Act, 1985. He also criticisd the stereo-typed affidavits and letters filed by the appellants to support the • claim that Selsun is a medicine characterising them as 'manufactured F evidence'. According to the learned counsel the product in question having only a subsidiary value of therapeutic or prophylactic use, it will fall under Chapter 33 having regard to Chapter notes as pointed out by the Tribunal. According to the learned counsel the commercial parlance cannot be a sure guide for classifying the product under one Chapter or the other and, therefore, the reliance placed on 'commercial parlance theory' cannot be G accepted. Learned counsel also cited some decisions in support of his contention which will be referred to at the relevant place. Before considering the rival contentions elaborately, it is necessary and useful to set to relevant portions inthe tariff items, Chapter notes and R 1246 SUPREME COURT REPORTS (1995]3 S.C.R. A the Rules for the interpretation of the Schedule. Relevant portions in Chapter 30 are set out below :- B "Pharmaceutical products ·Notes: 1. This Chapter does not cover : (a) (b) C ( c) Aqueous distillates or aqueous solutions of essential oils, suitable for medicinal uses (Chapter 33), ( d) Preparations of Chapter 33 even if they have therapeutic or prophylactic properties; D 2. For the purposes of heading No. 30.03, E F G H (i) (ii) 'Patent or proprietary medicament' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals, which bears either on itself or on its containers or both, a name which is not specified in a monograph, in a Pharmacopoeia, Formulary or other publications, namely:- (a) The Indian Pharmacopoeia; (b) The International Pharmacopoeia; (c) The National Formulary of India; ( d) The British Pharmacopoeia; ( e) The British Pharmaceutical Codex; (f) The British Veterinary Codex; (g) The United States Pharmacopoeia; • I B.P.L PHARMACEUTICALS LTD. v. C.C.E. [K. VENKATASWAMI, J.] 1247 (h) The National Formulaxy of the U.S.A A (i) The Dental Formulaxy of the U.S.A.; and G) The State Pharmacopoeia of the U.S.S.R. or which is a brand name, that is, a name or a registered trade B mark under the Trade and Merchandise Marks Act, 1958 ( 43 of 1958), or any other inark such as a symbol, monogram, Iable, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to mdicate .a connectiim in the course of trade between C the medicine and some person, having the right either as proprietor or otherwise to use the name ·or mark with or without any indication of the identity of that person.' · Heading No. 30.03 Medicaments (including veterin.axy medicaments) , D Sub-Heading No. Patent or proprietary ·medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic; 3003.19 - Other Relevant portions in Chapter 33 are set out below: "ESSENTIAL OILS AND RESINOIDS: PERFUMERY, COSMETIC OR TOILET PREPARATIONS NOTES: 1. This Chapter does not cover: (a) Soap or other products of headi!.'g No. 34.01; (b) Gum, wood or sulphate turpentine or other products · E F G of Chapter 38; or H 1248 A B c ·.·o E F. G H SUPREME COURT REPORTS [1995] 3 S.C.R. (c) Perfumery, cosmetics and toilet preparations containing alcohol or opium, Indian hemp or otlier narcotics · and for this purpose these expressions have the meanings respectively assigned to them in Section 2 of the Medicinal and Toiler Preparations (Excise Duties) Act, 1955_ (16 of 1955). 2 •. Heading Nos. 33.03 to 33.08 apply, inter. alia, to products, whether or .not mixed (other than aqueous distillates and ~queous solutions of essential oils), suitable for use as go<;>· ~ B.P.L.PHARMACEUTICALS LID.v. C.C.E. (K. VENKATASWAMl,J.) 1249 Relevant rules for the interpretation of the schedule are set out· A ~ below:- "3. When by application of sub-rule (b) of rule 2 or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:- B (a) (b) (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last c in the numerical order among those which e9ually merit consi~eration." It is also necessary to set out the corresponding previous tariff items as they stood prior to 1.3.1986, namely, 14E and 14F relating to patent or D proprietary medicines and toilet preparations respectively. They read as follows:- "Tariff Item 14E - Patent or Proprietary Medicines: 14E. Patent or proprietary medicines not containing alcohol, E opium, Indian hemp or other narcotic drugs or other narcotics other than those medicines which are exclusively Ayurvedic, Unani, Siddha or Homeopathic. ) Explanation l Patent or Proprietary Medicines means any drug or medicinal preparation, in whatever form, for use in the internal or F external treatment of or for the prevention· of ailment in human beings or animals which bears either on itself or on its container or both, a name which is not specified in a monograph in a pharmacopoeia, formulary or other publications notified in this behalf by the Central Government in the Official Gazette, or which G is a brand name, that is, a name or a registered trade mark under .\ the Trade and Merchandise Marks Act, 1958 ( 43 of 1958), or any other mark such as symboi monogram, labei signature or invented words of any writing which is used in relating to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the H 1250 A B c D E F G H SUPREME COURT REPORTS (1995) 3 S.C.R. right either a proprietor or otherwise to use the name or mark with or without any indication of the identity of that person. Explanation II - 'Alcohol', 'opium', 'Indian hemp', 'Narcotic Drugs' and 'Narcotics' have the meanings respectively assigned to them in Section 2 of the Medicinal and Toilet Preparations (Excise Duties) Act 1955. Item No. 14E - Cosmetics and Toilet Preparations: 14F. Cosmetics and toilet preparations not containing alcohol or opium, Indian hemp or other narcotic drugs or narcotics, namely:- (i) Preparations for the care of the skin, beauty or make-up preparations and manicure or pedicure preparations, such as, beauty creams; vanishing creams, cold creams, make-up. creams, cleansing creams, skin foods and skin tonics, face powders and grease paints lipsticks, eye-shadow and eyebrow pencils, nail polishes and varnishes, cuticle removers and other preparations for use in manicure or chiropody, sub-burn preventive preparations and sub-tan preparations, barrier creams to give protection against skin irritants, personal (body) deodorants, depilatories. (ii) Preparations for the care of the hair, such as; brilliantines, perfumes hair oils, hair lotions, pomades and creams, hair dyes, shampoos whether or not containing soap or organic surface active agents. (iii) Shaving creams, whether or not containing soap or organic surface active agents. Explanation I. -'Alcohol', 'opium', 'Indian hemp', 'Narcotic Drug' and 'Narcotics' have the meanings respectively assigned to them in Sections 2 of the Medicinal and Toilet Preparation (Excise Duties) Act, 1955. Explanation Il. - This item includes cosmetics and toilet preparations whether or not they contain subsidiary pharmaceutical or antiseptic constituents, or are held out as having subsidiary curative or prophylactic value. ) B.P.L. PHARMACEUTICALS LID. v. C.C.E. {K. VENKATASWAMI, J.] 1251 Explanation Ill. - This item includes unmixed products only when A they are in packing of a kind sold to the consumer and put up wi(h labels, literature or other indications that they are for use as cosmetics or toilet preparations or put up in a form clearly specialised to such use." It will be useful to set out the reasons which weighed with the C:~ntral B Board of Excise and Customs to hold that the product in question is a drug or medicine, of course under the old tariff entry namely, 14E. Those reasons given by the Board are the following :- "(a) It was used for the treatment of a disease known as SeborC rhoeic Dermatitis, commonly known as Dandruff. (b) It was manufactured under a Drug licence. (c) The Food and Drugs Administration had certified it as a drug. ( d) That the Drug Controller had categorically opined that Selenium Sulphide present. in Selsun was in a therapeutic concentration. ( e) The brand name "Selsun" was derived from the name of the D drug Selenium Sulfide. E (I) It was included as a drug in the National Formulary, U.S.- Pharmacopia and the Merck Index . . (g) It fulfilled the requirements of a drug as understood in commonparlance. (h) Selenium Sulfide was sold only on medical prescription and used as a medicine; F (i) Selsun was not a medicated shampoo, which was recommended G as conditioners with subsidiary medicinal effect. Selsun was on the contrary being recommended by physicians; Gl Various standard books and treaties such as (i) The Pharmacological Basis of Therapeutics by Goodman and Gilman (ii) Harry's Cosmeticology referred to Selsun as a drug. H A B c D E F G 1252 SUPREME COURT REPORTS (1995] 3 S.C.R. (k) It was being marketed as a Patent or Proprietary medicine through Registered Pharmacists who hold valid drug licence, and not by any dealer like other shampoos; (l) Abbott's literature referred to it as a drug and such literature was addressed to physicians, also the label on the container mentioned t.hat the product was to be used as directed by physicians. (m) Affidavits of leading doctors established that Selsun was being manufactured for use as a drug. (n) The Sales Tax authorities taxed Selsun as a drug. ( o) Selsun was repeatedly held by the Excise authorities as a drug. (p) Johnson's Prickly Heat Powder and Nycil have been recognised as drug and Selsun stood on a stronger ground; ( q) That the Excise Department had made inquiries form the trade and found that other shampoos like Clinic, Tata, Halo Etc. were much cheaper and that their advertisement campaigns were "to leave the hair silky, soft and healthy" whereas Selsun was not so advertised. On the contrary there are precautions in use mentioned." Similarly it is very relevant to bear in mind the label, literature and medicinal properties concerning the product in question. The labels specifically mention as follows: (i) That it is a poison; (ii) Gives a cautionary note that the product should be used for external use only and should be kept out of the eyes and away from children and also that it should not be used immediately after bleaching, tinting or permanent waving of the hair or on inflamed scalp; (iii) That is should be used twice weekly initially and then as often as necessary or as directed by the physician. H (iv) That it is a medical treatment for dandruff. ..., . B.P.LPHARMACEUTICALSLTD.v. C.C.E. (K. VENKATASWA'.!J,J.( 1253 (v) That it contains selenium sulphide SSP 2.5% w/v. A (vi) That the hair should be washed first and then the Selsun should be massaged into the scalp and left for 2 or 3 minutes and thereafter rinsed thoroughly. Regarding the literature which is given by appellants in the Paper B Book, the same can be briefly set out as follows :- (1) That the literature is for use only by Registered Medical Practioners or a Hospital or a Laboratory. (2) The literature indicates that Selsun effectively controls C Dandruff and clears scalp and Seborrhea and thereby controls Acne, stitis external and Bleph-aritis. (3) The literature shows that Selsun is an effective and safe treatment for the disease Tinea Versiocolor and Pityriasis Veresicolour D which are an infection of the skin and appears frequently on the trunk, neck, face and prominal portions of the arms and legs. ( 4) The literature also informs physicians of the results of various studies relating to the effectiveness of Selsun for curing the above diseases. E (5) The literature states that if neglected, Dandruff can lead to itching, scaling, falling of hair, acne and blepharitis. ( 6) Physicians are also informed regarding the directions of use and it is suggested that the scalp should be rinsed for 3 to 4 changes F of water and after 'treatment' the hands should be washed thoroughly, specially under the finger nails'. So far as medicinal properties of the product are concerned it can be gathered from the technical and/or pharmaceutical references that G Selenium Sulfide has anti fungal and anti-seborrhoeic properties and is used in a detergent medium for the treatment of Dandruff on the scalp which is milder form of Seborrhoeic dermatitis and Tinea Versicology 2.5% of this compound is the Therapeutic quantity. At the risk of repetition, it must be pointed out .. that on the side of H 1254 SUPREME COURT REPORTS [1995] 3 S.C.R. A the respondents, no other material is produced to discredit the affidavits and letters filed by the appellant before the CEGAT. As a matter of fact, it is seen from the order of the Central Board of Excise that such affidavits and letters were also produced in the year 1981 and they were taken note of by the Central Board of Excise. Nonetheless, the learned counsel B appearing for the respondent, as pointed out earlier, critised the affidavits as 'manufactured evidence'. We could like to comment on this that it is not fair to call the affidavits and other leiters as 'manufactured evidence' as they were not produced before the Court for the first time. They were produced long ago before the Central Board of Excise and instead of talcing steps to produce materials to dislodge that evidence, it is not open C to the learned counsel for the respondent to merely state from the Bar that the affidavits and letters are manufactured evidence. D We have given above in detail the facts and circumstances leading to the filling of this appeal. Let us now take up the issue _placed for the decision of this Court. In the earlier paragraphs we have seen that the product in question viz. 'Selsun' has been, for a long time, classified by the Excise Authorities as a patent and proprietary medicine accepting the decision of the Central Board of Excise and Customs rendered on 17.1.1981. The principal reason E for changing this classification, as appears from the orders of the Authorities below, is the coming into force of the new Central Excise Tariff Act 1985 read with schedule thereunder and also the rules for interpretation of that schedule.