Moisturex cream meant for curing skin is medicament; Supreme Court lays down principles to identity medicament products

COMMISSIONER OF CENTRAL EXCISE, MUMBAI-IV V. CIENS LABORATORIES (2013) (Supreme Court)

'Moisturex' cream having medicinal ingredients and meant for curing of skin ailments/diseases is a medicament (duty @15%) and not cosmetic (duty @70%)

Facts:

The assessee was engaged in manufacture of product 'Moisturex', which it sought to classify as 'medicament', liable to duty at 15% under Heading 30.03. However, the Department classified product as cosmetics liable to duty @ 70% under Tariff Heading 33.04.

The Supreme Court held in favour of assessee as under:

• For deciding whether a product is 'medicament' following principles are relevant:
• Presence of pharmaceutical ingredients that have therapeutic or prophylactic or curative properties, is relevant and proportion of such ingredients is not decisive; 
• Even if a product is sold without a prescription of a medical practitioner or over/across counter, it may be 'medicament';
• People who actually use such products must understand it to be 'medicament'; 
• Its primary function has to be "cure" and not "care", i.e., it must be used mainly in curing or treating ailments or diseases.

• Accordingly, 'Moisturex' cream having medicinal ingredients, though in small quantities, is not primarily intended for protection of skin but for curing of skin ailments/diseases, is a medicament (duty @15% : Tariff Heading 30.03) and not cosmetic (duty @70% : Tariff Heading 33.04).