Tuesday, March 14 2006 09:53 Hrs (IST) - World Time -

New Delhi: The Supreme Court has held that excise authorites should determine the primary use of a whether medicinal or cosmetic for levying duty on it as its subsidiary benefit has no relevance in this regard.

This judgement was delivered while deciding a case of manufacturer of ayurvedic products in which the excise authorities brought all its ayurveda and herbal preparations under the category of cosmetics.

While the excise duty under the Central Excise Tariff Act, 1985 for cosmetic products is quite high, the products falling within the category of medicament attract nil duty.

The court maintained that though the word 'medicament' is not defined anywhere, the term 'cosmetic' is defined under the Drugs and Cosmetics Act, 1940 and 'what is to be seen is the primary use of the product'.

"While a medicinal product or a medicament is meant to treat some medical condition, it may happen that while treating a particular medical problem, after the problem is cured, the appearance of the person concerned may improve. The product used for the purpose cannot be described as cosmetic simply because it has ultimately led to improvement in appearance of person," a Bench comprising Justice Ashok Bhan and Justice Arun Kumar said.

It said "In order to be a medicinal preparation or a medicament it is not necessary that the item must be sold under a doctor's prescription. Similarly, availability of the products across the counter in shops is not relevant as it makes no difference either way".