Dismissed

M/s. Aorom Herbotech

GST AAAR30 Dec 2024GUJ/GAAAR/APPEAL/2024/06

Case brief

AI extract

What is this about?

The court dismissed this appeal by M/s. Aorom Herbotech against an Advance Ruling. The appellant sought to classify herbal smokes as medicinal cigarettes (ISN 3004) but failed to prove manufacturing per Ayurvedic books. The court substituted the heading. The holding was that herbal smokes are taxable as tobacco substitutes (ISN 24029010) and not medicinal cigarettes.

What did the court decide?

The appeal against the Advance Ruling was dismissed, upholding the classification of herbal smokes under ISN 24029010.

M/s. Aorom Herbotech — Customs and Excise | GST AAAR (2024)

¶1

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¶2

¶3

(lll.lAIt,'I ,\l'l'ilt,l.A'l ll Atl l'IIOltl'l Y t'Oll Al)VANCli ltt,l.lN(; (;ool)s A)(r) SF,RVTCIiS^'r'r\X TAXNIJION I)/5, ITA.IYA KAIt IIIIAVAN, ASIII{AM I{()AI), fuIARKET AItMt))AllAt) 380 009. I

¶4

,\I)VAN(]] J ITUI,ING(APP] ]AI,) NO. GTJJ/GAAAI{/AP I' I', AI,I2O24 I O 6 (lN ,\PPl.lCn^'l lON NO. Advancc Ituling/S(iS'l'&(l(iS172022/A It/O1 )

¶5

l)a1c:Jo 1!-.2024

¶6

Namcandaddrcss ol-thc appcllant	M/s. AoromIIcrbotcch Sr.No.654/lPaiki,PlotNo.17, NrLadbinala, I)ccsaIIigl.ru,ay, [)alanpur, Ilanaskantha385001
(;\Il<br>qrj'1[13[;-rcllarrl	2ulAIlSIrA6807ClZ.l
AclvanccIiulingNo.and I)atc	(i(J.l/(iAAlt/l<l5812021datcd29.I0.202I I
JurisdictionOlficc	CcnlcrCommissioncratcAhmcdabad I)ivisionI)alanpur I{angcI)alanpur-l
I)atco1'appcal	11.03.2022
[)atcoII)crsonalIIcaring	15.t0.2024
Prcscntlbrthc appcllant	ShriAmishKhandhar,CA Ms.I)hwaniShah Ms.Arnrin Alwani.^(lA .^{Ms.Ilhagl,ashrccI)avc.C'A}

¶7

At thc or-rtsct wc would likc to makc it clcar that thc provisions ol- thc Cc:rtral^(ioods anci Scruiccs^'l'ax Act, 201 7 and^{(iujarat (loods} and Scrviccs 'l'ax Act,20l7 (hcrcinalicrrclcrrcd to as thc'C(iS't'Act.20l7'and thc'G(jS'l' Act, 2017') arc pari materia and havc thc samc provisions in likc ulatlcr and dill'cr lrom cach othcr only on a fbw spccific provisions.^'I'hcrclbrc, unlcss a rrcntion is particularly madc to such dissimilar plovisions, a rclcrcncc 1o lhc C(iS'l' Act, 20 I 7 would als<l mcan rclcrcncc to thc corrcsponding sirnilar provisions in tlrc G(lS'l' Acl,201l .

¶8

l'hc prcscnt appcal has bccn lllcd Lrnclcr Scction 100 ol'thc C(iS'l' .\cL. 2011 and lhc^(iGS l' t\ct,2017 by M/s. Aorom Ilcrborcch, (horcinalicr rcl'crrccl kr as Appcllanl) against thc Advancc l{uling No. GIJJ/GAAI{I{/58/202 I darcd 29.10.2021.

¶9

Ilriclly, thc l-acts arc cnumcratcd bclow lor casc ol-rclcrcncc:

¶10

thc appcllant is cngagcd in thc supply oI' 'Aorom I lerbat S. u,hich accorcling to tlrcm is classillablc r-rndcr 3004901 l;

¶11

1 .\

¶12

¶13

. thc inl rcdicnts uscd in manulacturing thc goods arc tcndu lcavcs, nutmc :. fcnncl powdcr, licluid glucosc, propylcnc glycol, sorbital, -"1th,^{r1, baking soda, llavoringadditivc Iclovc, paan, mint,} chocol Ltc, vanilla, c1cl, cn.rpty papcr tubcs & llltcr;

¶14

. consc( Lrcnl to firanul-acturing, thc proccsscd rnatcrial is injcctcd in thc cm rty papcr tubc with liltcr;

¶15

that th ' [ir.ral packing is of 10 hcrbal smokcs/20 hcrtral smokcs,

¶16

tha[ lrr bal smol<ing is an ancictrt placticc t(] ctllc r'nany discascs Iiottt root r cr.rliot'rcd in Ayurvccla knorvn as clhuntapurt /, al coltttttott practir : in ayurvcdic trcatmcnt/thcrapy such as panch-karrla.

¶17

In vic r ol' thc lbrcgoing lacts, thc appcllant had sougl.rt^Advancc Iluling on thc bc ow tncnlioncd qucstions vL

¶18

I . Delernt' nqtion rtf the lictbility lo pay Tax on Sales of loront^{I lerhal} Smokes^(regttlar .flavour) as per T'ax Invoice^No.: lll/GST/S0^clt. 07/0(t/202t made kt : M/s. Sonde lixim Pvt. Lld.,^l.ohegon Mahctrtrslt'ra, regording. IGST.

¶19

Deterni nation td lhe liability b pay^'l'ux on Scrles o/ lorom^llerbtl Sntokes I egular .flavour) as per^7-ax lnvoice^{enc,losecl heretvithry'} Oujcrrcrt .\ lcs rcgurcling^(:GS'l- and^SGS'l-.

¶20

Oonsc ,r-tcnl- to hcaring Aorom l lcrbotcch, tllc^{(iu.iaratAr-rtholiLylirr}

¶21

Advancc I{uling , GAAI{1, rccordcd thc^{Ibllowingfinciings vrz}

¶22

that in tcrrrs o['scction notc l(b) of^{chaptcr 30, lhc chaptcrdocs not} covcr. prcparations such as tablcts, chcwing^{gulr or patcl-rcs} Ilransi^{crmal syslcms] intcndcd to assist smokcrs to stop srnoking;}

¶23

a thc al pcllant has not madc a casc that thc^{subjcct goodsarc} ayurvr dic mcdicincs manulircturcd in^{accordanccwithtl-rc} Autho itativc Ayurvedic books as spccificd in thc^{firstschcclrrlc to} thc l)r' gs ancl^(losmctic Act, 1940;

¶24

that i; common parlancc, goods arc bought^{as cigarcttcs without} tobact r/nicotinc & not as an ayurvcdic^{tncdicarncnt; that applicant's} propo :d I tSN 3004, is not applicablc to thc^goocls;

¶25

a tl-rat cr lrlanalt)ry nolcs to chaplcr^{24 spccilics tlrat it covcls not onll'} unmar rrlacturcd and manulacturcd^Lobacco but^{also tranulacti-Lrcd} tobacc.r substitutcs, which do not contain^tobacco;

¶26

a that c garcttcs of lobacco substitutcs^{arc covcrcd at Sr. No. 14 o1'} Schccl rlc IV to notification No.^{112017-C'L'fi)& is lcviablc to (lS l'} (D 2S'' " & CGS'I' Compcnsation ccss of Ils^{4,0061-pcr thousand.}

¶27

'l'hc (,AAIi, vidc thc impugncd ruling datcd 22.3-2022, hcld as

lollows:

,'
It I
e#

EULINC

lhr^..iil !'r\1. trr. L.,rlrl( r(

¶33

Aggricvcd by thc alorcsaid aclvancc ruling, thc appcllant is bclbrc r-rs, raising thc lollowing contcntions, vL

¶34

a substitutcd goods should havc similar charactclistic whicl-r is rcplaccablc onc and scrvc thc samc purposc;

¶35

a llcrbal sr-nokc cannot bc considcrcd as substitutcs to cigarcttcs sirccl o lobacco/nicotinc is rnissing in hcrbal smokc;

¶36

usagc ol'bolh thc products arc tolally dil'fcrcnt & thcy arc nol idcntical;

¶37

tobacco cigarcttcs arc not rcplaccablc with hcrbal sr-nokcs;

¶38

attribtrtcs ol- hcrbal srrokc do not malch^,,vitlr listcd goods that arc globally considcrccl as substilr-rtcs ol'tobacco cigarcttcs.

¶39

a chaptcr rrolc ol chaptcr 24 clcarly statcs that it ciocs ntt1 covcr' mcdicinaI cigalctLcs;

¶40

a that cigarcttcs having mcdicinal propcrty shall bc classificcl as rr-rcdicinal cigarcttcs;

¶41

a that thc product hcrbal smokcs arc not intcndcd to assist thc srrokcrs to stop smoking;

¶42

a l!-tal wef 1.1 .2022, cl.raptcr notc o[ chaptcr 30 as amcndcd starcs thar products, such as tablcts, chcwing glnn or patcl'rcs ltlansdclrnal systclnsl, containing nicolinc & intcndcd to assisl tobacco usc ccssation Ihcading 2404 l;

¶43

a LhaL tlrc products contairring nicotinc can onJ1, bc cor-rsidcrccl as intcndcd to assist tobacco usc ccssatior-r & is covcrcd unclcr chaptcr' hcacling 22104:

¶44

Llrat prorlr-rct^jnvolvcs inhaling hcrbal smokc; it hclps curc couglr. cold, brouchitis, asthrna; it also hclps incrcasc kapha and vata lirr trcating or prcvcnting thc discascs;

¶45

a that dhurlapana litcrally mcans srnoking nrcdicinaJ dlugs; [hat dl'rurnapana in ayurvcda is rccognizcd as approvcd mcthod by Ministry olAyush as wcll as National Institutc o[-Ayurvcda;

¶46

a thal thc product 'hcrbal smokc' is manul-acturcd in accordancc rvith ar"rthoritativc ayurvcdic books;

¶47

a tl'rat tl.rc appcal is not hit by Iirnitalion; in casc whcrc limitation cxpirccl during thc pcriod 1 5.3.2020 till 14.3.202 l, irolwirhsrar.rdine thc actual balancc pcriod ol limitation rcmaining, all pcrsons sl.rall I'ravc a linritation pcriod o1'90 days lronr 15.3.2022; that thc appcal is sLrt'rur i I tccl rvilh i rr cxtcndcd ti :nc pcrioci.

¶48

E I)crsonal hcaring in thc nrattcr was hcld on l-5.10.20l'.1, whcr.cin Shri

¶49

Amish Khandhar, CA, Ms. l)hwani Shah, Ms. Amrin Alwani, C Ilhagyashrcc t)avc, CA, appcarcd and rcitcratcd thc submissions mad J

,:.

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appcal. I)uring. lrc coursc o1'pcrsonal hcaring thc autholizcd rcprcscntativc subnritLcd il cas( surllnary. rcitcrating thc avcrrncnts aircadv raisccl, as Iistcc{ oLtl supra.^'l'hcy rlso sr-rbrr-rittccl a ccrtificalc o1'analysis ol'thcir pt'ociuct^issr.rcci b1, M/s. Accuprc r l{cscarch [,abs I'}Ltd, Ahmcdabad.

¶55

I.'INDINGS

¶56

Wc I'ra, c carclully gonc through and considcrcci thc^{appcal papcls,} wriltcn subr.nissi )ns fiicd by thc appcllanl, submissions madc at^{thc timc tll'} pcrsonal hcaring thc Aclvancc l{uling givcn by thc GAAI{ and olhcr matcrials availablc on rcc|d.

¶57

Ilclbrc advcrting on kr thc n-rain issuc, wc notc thal thc appcllant lras lilcd thc appcal :gainst tl'rc impr:gncd rr.rling clatccl 29.^10.202 I on l2.i.l0?l scction 100 o1- rc CGS'I Act, 2017, which^{dcals ivith appcal to appcllatc} alrthority statcs zt i undcr: lrclcvant cxtractsl

¶58

Seclion l0(t :lppeol lo Appellate Authority. - (l) l'ha con, t'rned officer, lhe iuristliclional ol/icer or an uT4tliconl oggricvetl^{b)t un.v} lth,ttnce rtr, ,tr pronounced untler sub-seclion (4) o./ section 9r. may uppeal lo lht' ,Tppellule / /horil1t. (2) livcry u1 1rcal^{untlerthis sectionshall be} liled^{utithina period o/ thirtyclul.'.s fiont} the clule on 'rhich the ruling soughl lo be appealetl against is contmunicatetl lrt lhc r:oncernccl t 'licer the lurisdictionul o.fficer und the applicutl.. I'rovidr I thut the tppellata lulhorily ma1t. il il is slllis/ieLl thut the tpy;ellanl t ur I b1, u .tr,11r',0u, r'ttLrsc.fiont prtsenling the ultpau!^v ithin^{tha .suid} 1x:t^irt,l tlals. tllov il to be ytresenlcd tvithin a l rtltcr^{periotl not c-rtctdirt,'1}

¶59

ln tcnrs o1'sccl on )00. ibicl, cvcry appcal^shall bc^{Illcd within a pcrioclol'} thirly days ll'onr rhc datc on which^{thc ruling sought to bc appcalcd againslis} commLrnicatcd 1,, thc appl'cant.^'l'hc applicant in liolm^{GS'l' AIiA -02, in Sr'} No. 2 has inlbrr: rccl thal thc datc of communication^{ol'thcimpugncd rLllingis} 29.10.2021.'I'huciirrc, thc appcal should^{havc bccn filcd by 28.l 1.202i.'lhc} proviso to sccti rn 100, ibid,^giv cs thc Appcllatc Authorily^{powcrto grant} conclonation Iol r linll-rcr pcriod ol30^{days in casc olsufficicnt calrsc.} I l. 'l'lrc a: rcllant l-ras howcvcr rclicd r-rpon thc orclcr datcd 10.I .2022 ol' tirc llon'blc A1 cx Court in thc Suo Moto^{Writ Pctitiorr(C) No. i/2020,} whcrcin thc l lor' blc Court hclcl as undcr:

¶60

5^'t.tt' ng inlo consitlerutittn lhe argutncnls^{udt:onccdb)' leurnetl cottttsclrtntl} tha irt ttttct of the strge o[ lhe^{tirus on ptrblic haulthantl udversitie.sluccclb.</sup> liligut^t.; in lhe prevailing^{condilictns' v'e deemit upProprialelo disltttscof the} l4l I^,. 21 o.l'2022 u,ith rhe ./bllowing^dit'ections.}

¶61

L'l'hc r^"tler tltrtatl 23.03.2020^{is rcslored und in conlinuolion of the sub}

¶62

¶63

¶64

or(let,\ dotcLl 08.03.2021.27.A1.2021 ond 23.09.202f . it is tlirecletl lhcrl^thc period.fi'om 15.03.2020 till 28.02.2022 shall stand excltrded.for the^{purpo"'e^'} of limitcrtiort as may be prescribetl under^{any general} or^{.speciul lat'sin respecl} of aLl .itrdiciul or quasi.judicittl^{proceeding"'.}

¶65

lll. [n ca.se.s v,here the limilalion v,ould hat,e expired during^{lha period} betv,een I5.03.2020 lill 28.02.2022, notwilhstanding the actual^baloncc trtcriod^{of limilation remaining. ull persons.;hallhove a limitulittnpcriotl} ol 90 day,r liont 01.03.2022. ln the evenl the acluul baktnce^period of limildtiotl rannining. 'ilh e//'ecl lront 01.03.2022 is^grc tar lhtrn^90tlul,:.s. rlru r !,,nir'r 1',.1 i, fl tllall u1t1l r^.

¶66

In r icu ol thc lirrcgoins, u,c ilnd that thc appcal hlts hlctr lllccl^u'ithin thc pcriod ol' I inritatior-r.

¶67

'l'hc primary issuc to bc dccidcd is thc ratc of GS'l' to bc paicl by appcllant on salcs o['Aorom llcrbal Smokcs. Whilc dclcrmining thc^ratc of GS'l', thc impugncd ruling classificd thc appcllant's product undcr^I ISN 24029010. It is thc appcllant's claim that thcir product should bc classificd undcr I ISN 300,1.

¶68

Ilclirrc rccording our lindings, r,vc would likc to rcproducc thc lclcvzu-rt poltions ol'thc^{(-'ustorns .l'ariff} Acl and 1l-rc l:xplanatoD' notcs ol- thc I ISN, in rcspcct ol'thc rival chaptcrs/cn trics, vL

¶69

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¶81

t'hc a1 trcllant has submittcd brochurc in rcspcct o[' thcir lrrodlrcts

¶82

'l'hc rclcvant cx1l .icts, is rcproduccd bclow for casc of rcl'crcncc.

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WhY^Smoke AOROM^?

Our Flovours

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¶88

^A,OrOm qvE srRE
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I Poon lChocoiote Clove I Requlor
f

¶89

'l'hc appcllant has mcntioncd thc list ol ingrcdicnts

¶90

Lrscd. thc

¶91

nr an r,r1'acluring proccss as undcr, vL

¶92

z. The appellant^rs s(art'!9^{andis enSaged rn mahulacturinB of herbal 5rnoke'whl'h}

¶93

rs free from nico(rne and lobacco'^Lrst of^{ingredren!5 used'and manulacturine}

¶94

p'ocess lIereol ,r explarned as !ndeI

¶95

Lisr ol ln redients used to^{nranrrlacture her} lsnroke

¶96

rcndu leave5, Nu!me8, tennel^{pov/der, PIopYlene} Slycol,^{Menthol,Flavorrng} addrt,ve lClove,^{paan, mrnt, chocola(e,Cloveetc} )^{Emptypaper !ubesw1!hilter'} (Nerrher^-ooacco nor Nrcotrne r5 used)

¶97

Manufaaturin 55

¶98

. Leaves wathinfl

¶99

Tendu Leaves are fr.st washed rn a vacuum washer at applcant's facility, and lhey are kept in Ihe water lor oveaniBht before^proaessinB lurther.

¶100

[eaves Cuttinp:

¶101

Leaves thal are kept in wate. overnight are drarned of{ water and then c!,1 rn the l,ne s !e ol:0.8 mm to t.O mm.

¶102

Leaves 0ryin i"

¶103

These cut.r.gs are then dned rn a nalural seltrng. The drving lakc: !!o!t 2 _ 3

¶104

8a5e flavorin

¶105

For each ;(rlogram ol dried tendu^{leaves,a mrxtureof 4 lrtcrsof !ater, 200} grarrs ol nutmeg powder,2OO grams of fennel^powder and 8 Srams of bak!n8 soda is heated on a medium flame on a^{stoveforhalf an hour-Afterfrlterrng} thrs rnrxture, the leaves are darnpened in rt for about^{half an hour.}

¶106

Roastinp:

¶107

After hait an hour, these leave5 are squeezed orf lhe mixture and^{thenput into} lhe roasting machrne where they are given even heat till they^attarn0% moisture.

¶108

¶109

F la,. 1-!t

¶110

Thr )asted leaves are then^put into the mixture^{where lor ea(h kilogram;50} 8ra '^{of PG,2OO} 8ram5^{of liquid(1C00g water: 550 ItiquidGlucose),I8} 'rol, 3 g Sorbrlol and 5 I of flavoring^{addrtivers addedand rnrxed ior about}

¶111

hn 'r hour. Aiter thr5^proae15 !he^{mater!airsready to inleal / re3cY iofherbal} s.r: i.s making.

¶112

l-!-1, Thr ,rocegsed rnateria: is then rnlecled in the empty^{pape. tube wrthtrller.} Th :: how herbalsmole^{is made. Then, lheseherbal smokes arepackedlnto} the .al packrng of lO herbal smokes / 20^{herbal smokeg a pack,ready to be} sc

¶113

The r cal smoke rs totally drfferent^{from re8ula. cr8aretteswhich is avarlablein} the n ket. The major drffe.e.ce between herbal smoke and regular cigarette5^rs ! ha. ' regula. crgarettes contain toba.co or nrcotrne and are regulated^by THE GAR€II:S AND OTI'jIR TOBACCO PRODUCTS (PROHIBITION Of A DV: SEfu]iNT ANO REGUTAiION OI TRADE ANO COMM€RCE, PIIODUCTION, SUi'' AND DISTRiBUTION) ACI, 2003. ReSular Cigare es nrc harrni..rl to health, 1erbal Smokcs manuiactured by the aOpellant are used a5 .redrc,nes for ,'rour resorrJtory dr!oroe|.,

¶114

l(r. 'l'h. Ilrst avcrmcnt raiscd by thc appcllant is that thcir proclLrct viz Aororr I lcrbal S nrokcs, is rrot a substitutc ol'cigarcttcs. GAn I{ had classillcd thc goods undcrⁱ ISN 2402 whilc dctcrmining thc GS I'ratc.^{Wc woulcl likc to} rcpl'odllcc thc I lrN cxplanatory notcs to thc said hcading, Ior casc of rrnclcrstandinq.'':

¶115

!.1.0: Ci8lrr. rhcroot!' clirrlllor rnd cl8rr.aa.!. of lobr.@ or o(tobtc(o rubrlilol.r. l{02.10 - Ci8rrs. ch.rooB l,H cl8rrillo3, coniljnrnt loba.co :r02.111 - CiBr.'!tl.s coolrinrnl lob..co :.to2_9u - orlcr Thls Jrnp 13 r.sE,ct.d lo cr*!rt^($'rsppcd or nol), chcrooG. cr8rnlloa and L!8rftncs. mtd. of or oi iobacao suhslrtul.!. OdEr srlbking lobacco.^whcthcr oI nol corlltunirls lohraco res ia aryproponion, rr.r.lud.d (hcrdllg 2a.03) lhrr' ' rdio8 coi€r! : fll r ,lrB, ch.roolr^.nd clgrrtlror,^{ron!.lnll|8 lob..c!.} i oro{ucB rrl!! h. mddc sholh of tobrco or of nuxnu.s of loba.co arJ loLtc(o .tiiurcs, ngzrdl'css of 0r pl,,foniorlt of ioblcco erd lob.cco tuhn'lul.r F.r.nt rn th. l:l⁽ l!rctrc.^{aoolalIinItobr.co.} rn Fm cipn?rlB .onrrrnrnr onl\ toblcco. tlris h.rinp also rrrlud.s lhosc ,ntdc l-rom ..rurcs of otracco rnd rot,ad6 s,r6snrures. ngardlcss oithc p(of'(,(rons of toL'..co :ind trcco slbiiturcs in thc rnutul!ll)^I ,drs, cherools, clE.rlllor,lnd cigir.lt.s o[ lohscco ruhilitulB. f,,r craInPlc. rarcuc. l's:nokci^") nNdc tront^{\pccrall!prcrcstcdicavcs,} f^{H \rrrt\of lclruec,} :rinin, :,eiih., t,'1,r..,, tr!, .rc,rr,ft :ll1!'do.s not (orcr lnol:{rrdl cr8"U.c6 (Cltpl.r -10. H.*c\tr. $8srctr6 coo'rrntis :-T'(, .l t:odEtr it'ccrfi.rll) fo.niul.ltC lo dr!.orrr8c l.!c Mbrl oi rfr'ltnl hur^qh,ch "at6s^{rEdrcinprop.(rc!ltru'n clssificdi, l-brsht3dtDg}

¶116

What is cvidc rt llom thc abovc is that thc hcading cxcludcs rtt ccl ic in a^I c igarcttcs (chal Lcr 30). It is li rrt hcr statccl that cigarcttcs containing c

ol ll

typc ol- prodr"rcts spccifically lonlrulalcd to discouragc thc habit ol'smol<ir.rg but u,hich do not posscss mcdicinal propcrlics lcrnain classillcd in his hcading.

¶121

11 . 'l'hc first qucstion that ariscs bascd on thc abovc, is whcthcr thc product is a nrcclicinal cigarctlcs? I'hc appcllant's claim is that hclbal snroking is an ancicnt practicc to curc rlany cliscascs lrorrr root mcrrtioncd in A1,r-rn,cria ancl that this practicc spccilically urrdcr a proccclr"rrc o1' [)hoonrltarra. Wc Ilncl that in pala 10.2 ol'thc impugncd ruling, GAAI{ rcprocluccd scction 3(a) ol'thc l)rugs and^(]osrrctics Act, 1940, which stalcs that Ayurvcdic, Siddha or' lJnnai I)rug, inclLrdcs all rncdicincs intcndcd lor intclnal or cxtcmal usc lirr or in 1l.rc cliagnosis, lrcatrncnt, mitigation or prcvcntion o['discasc or disordcr in human bcings or anirnals, and nranulhctured cxclusivclv in accortlancc \fith thc firrnrulac rlcscribcd in lhc authoritativc books of .,\r,urvctl. Sidrlha ancl [ ]nani l'ibb systcrrs of rncclicinc, spccihcd in thc liirst SchcclLrlc. (inn It. Iirrthcr eocs on rccord that thc appclJant was not in a position to sr-rbstantiatc/1-rin point thc ar-rthoritativc bool<s o1'Avurvcci, accolcling ru rvhich thc subjcct goods havc bccn manul'acturcd. On lrcing spccilicall;,askccl dLrring thc coursc ol'pcrsor.ral hcaring, thc appellant lailcd to inlonn thc narnc ol thc authoritativc book ofAyurvcd. lrufther, during thc coursc ofpcrsonal hcaring it rvas also inlblmcd that thcy do not hold any liccnsc pcrrnitting tlrcnr to rnanulacture thc said goods.^'l'his bcing thc fbct, lcads us to a conclusion thc appcllant has t'ailcd in making oul a casc o[ thcir product f'alling Lrndcr thc catcgory ol''rrcclicinal cigarcttcs'. l'his vicw is Ir-rlthcr substar-r tiatccl liont thc lcltcr clatccl I .l .2021 , addrcssccl to^'l'hc [)ircck)r, n yush Mantralay, Ncw I)c]hi" l,hcrcin thc apltcllant in paragraph 2 statcs as unclcr:

¶122

" tr4ie httvc alreaclt' acquiretl machiner_t' & :;oma o/ it is in tr.urt.sit. [4ia

¶123

inve,stccl an approx. affiount o/ lts. .50 lakh. We mct thc .Joint Com ntiss i on et', 1; DC,,I ( lyurvedic) Jbr in/brmation regard i ng l),urvedic 11t'c'lr,rt'. lJtrt tltr'v huv.' t'r,/itsed lo granl us,4yurveclic ItL'cn,\A .\lLt l in.{ t)ut' {2441!t14!29^{,t not /trll unclcr crny calegorv in t|1:111'vs6{ix} books.^"

¶124

lcrnphasis^supplicdl

¶125

'l'hc sccond qucstion that ariscs is whcthcr- thc cillarcl.lcs manulacturcd by thc appcllant, containing ccrtain lypcs ol' products arc spccilically lirrrrLrlatcd to cliscouragc thc habit ol' smokirru. In thc brochurc subrnitlctl br thc uppcllant during thc coursc ol' pcrsonal hcalins. rrnil rlLrcstion "Wlto urc we ".il inlcr.alict statcs as lir llrlu,s : l r.clcvanr cr tr.acts l

l'ir9c

litL, Lirttt int,,ntitL' tt.('Ltl'(li t)t1 tll( \ttlt)filtt! l)itllt'ttt t<sup>l,cJt,,t i,,tit '^{,,' t} tⁱ tt ol((t't. \tt t))ltL'lo lltt't'otrltt.titttl lJrul il.\ tlt)l rtttl.t l^lt t'^{t t i} t^{r t li tt} L lllul tlluh.\ tt.t)ttti't' .sltokitt.y lil itrlt. rullt(r il i.v lhe .scn.sLtliotr ttl tlrc .;nttkitty^{\1 lti(11} dl litttc\ lot^(t\lltr , r lt ,1tritt, ' lt' \lttll^t11h)kittt: .t.\ttitl

¶130

Our tloul i: ,t pnn'ida o solulion to lhose v'ho.itrsl w nl lo .sttnkc becuuse it vill^htrtl: cool <\i lo ll '.\e u(l(licls v'ho rculb'wanl lo quit bul are u^{rit'lirrtrtf tltc .setlsulitttttrtul} tltc huhit.'

¶131

'l'his clcally sho ,s that thc producl ol'thc appcllant is a substitutc ol cigarcttc irnd is a lso rrranr i'actr"rr'cd and nrarl(ctcd with thc said ainr in rrind.^'l hcrclirrc. tirc avcrnlcrll o l' hc appcllant in pata l3 to thc ctl-cct that^"/1 i.\ subntittcd tlt(tt s Lrch unde r.\ l0n(, ng i.s lucluoll.y it'tcorrecl cts the herbcrl ,tntoke.s^{manuf i.rt'ttttctl} by' tlte ulrycllont tre tlot inlendcd to assisl lhc smokers ltt.stttS;.sntrtkins",^llclics lact.

¶132

In^, icw ot' thc lbrcgoing, wc concur with thc l-rnding^{o1' (jAAIt} that thc product is classiliablc undcr I ISN 24029010 morc so sincc it is trot^rt mcdicinal cigar\ rtc and sccondly sincc thc appcllant himsclt, in^{his brochrrrc} claims that thc i)roducl^{in clucslion, is a substitutcto cigarcttcand is als<r} intcnclccl to aclcli ts who rcall),want to cluit thc smoking^habit.

¶133

'lhL ncxt avcrtllcnt ol' thc appcllarlt is tllat tllc chaptcr IlttLc ol' chaptcr 2-1, r'cpr', ciuccd .st4rt'rt, statcs that^{it docs not covcr tllcdicinal ciga|cttcs.} that cigarcttcs raving r-ncdicinal^{propcrty shall bc classillcclas tucclicirrli} cigarcttcs. Wc tavc alrcacly hcld in^{paragraph 17, that thc appcllanthas ttot} succccdcd in csr rblishir.rg that thcir^{product is n.rcdicinalcigarcttcs. 'l'l.ris[.rcing} thc casc, thc clui stion ol'rclying on thc^{notcol'clraptcr24, is not tcnablc.}

¶134

21 . 'l h, appcllant's ncxt avcrmcnl is that ure/ 1.1 .2022, chaptcr notc 1(b) ol'chaptcr 0, as alrcndcd, statcs thal thc^{chaptcr docs not covcr proclrtcts,} such as tublct. chcvuil)q^qLlnr or^patchcs ltransdcrntal^{s)/stcltlsl,cont4irlirtg} ilMlt^{ir'1q .tint,. ,dcci to itssisttobacctl t-tsc ccssatiot.t llrcacling1404} l. I lre ir\ cllcnI pul I 'r'tlr is that sincc thcir^{prtlduct docs tlot containttie otitlc. it} shoulcl lall wit rin thc ambit of^chaptcr 30^{and not chaptcr 24. Whilc thc} arncndccl cl-rapt'r' notc statcs that it^{docs nol contain products vr: tablcts'} chcwit-rg gLlm tr. patchcs, containing^{nicolinc,intcndcdto assist tobacco ttsc} ccssation, thc lr ct is that thc^product ol'thc^{appcllant, is ncithcrof thc abovc.} 'l'his docs not rrcan that lirr a tobacco substitutc to lirll within thc arrbit ol' chaptcr 24 it sl^ruld ncccssarily contain, nicotirlc.^{l'hat'rvc bclicvc.is}

',.1 I

corrcct rcading ol- thc chaptcr notc in clucslion. I{clying on thc llSN notcs ol' l.:1.01. u,c havc hclcl that thc product in clucstion rvould lall rvithin its ambit. \othirrg, has bccn produccd, as is alrcady Incntioncd .\upr(t.lo substantiatc thc lhct that it wor,rld l'all undcr chaptcr 30, whcrc thc appcllant intcnds to classil_r, his product.

¶139

l,astly, wc lind that thc appcllant has raiscd an avcrmcnt that ploduct involvcs inhaling hcrbal smokc; it hclps curc cough, cold, bronchitis, asthnra; it also hclps incrcasc kapha and vata lor trcating or prcvcnting thc tliscascs; that dhumapana litcrall,"-' mcans stnoking rrrcdicirral dlr-rgs; that tlhunrtrpanir in ayr-rrvcda is lccognizcd as approvccl mcthocl b1, Ministrl' ol' A-r ush as rvcll as National lnstitutc ol'Ayurvcda. Ilorvcvcr. thc appcllant in thc adclitional sr-rbmission, viclc crrail datccl 18. 10.2024 to thc l{cgistry, has sLatcci as Ibllows:

¶140

Reoistrc60n wilh Aot/u'h ond MSM€.

¶141

The Appellant submitted^an emailwith^{AaYuth DEpartmentfor raquirement of re8istradon ot} produrts manufactu.ed whereas no funher communicadon o. the email is received lill dale.

¶142

o Alongside,^{the emailwa9Submissionwasdonewith lndustrial Commi5tjonerale to inquire on} all rndustriat li.enser^{requiredby theAppellantforlisted products wherebya lette. war} rece;ved kom !he ol{ice ofMSM!^{CommissionereletlatinglheAppella nt is required} loobta,n re8isrration iiom UoYAM and^no olhe^r .e.tification /^{licentingis required tobEoblained.}

¶143

I ao.tldering the g!ideline5^{f.om MSME Commissionerate, an applicadon was made} with tl'n,!!rv ol t lr.ro Small and tlediirm Enlerpri5e and !he^{Appellant was} awaroed with UDYArvl Regrstratjon No.^"UDYAM-GJ 04-0003206" wilh.lassif1cation of activity under^{"Manufacl,rre} of^{pharmaceuh.als, medicinal ch€mical and botanicalproducts"}

¶144

What Lhis rc-corr lirrrs is whal rvas slatcd during thc coursc ol- pcrsonal hcaring -that thc appcllant docs no1 hold any liccnsc lirr r.nanulhcturc o['Ayr-rrvcclic nrcdicir-rc l'r'om any rcgulatory body, pcrmitting thcm to rnanul'acturc tl-rc said goocls, which as pcr thcir claim is a mcdicinc.

¶145

ll. In vicw ol'thc abovc Irndings, wc rcjccl thc appcal Iilcd by appcllant M/s Vl/s. Aorom Ilcrbotcch, against thc Atlvancc Ilrrling No. (;t j,(i,\n It/ltiittil0ii datccl 29. 10.202 I ol'thc (iu.iarat Authority, lirr Arlr,'ancc Ii rlirirr

¶146

.-) V f'rh----L-r., ( I{a.iccvYlirpno ) (Ii V Siva Naga Kurnari) ffi Mcmbcr (S(;S1') Mcmbcr ((l(;S'l') 71 l)lacc:,\hn-rcdabad [)arc:3a lz .2024 (

¶147

l'itrrr'I!ol Il

M/s. Aorom Herbotech

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M/s. Aorom Herbotech

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