http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11

CASE NO.:

Appeal (civil) 5401 of 2007

PETITIONER:

Union of India and Anr

RESPONDENT:

Vicco Laboratories

DATE OF JUDGMENT: 26/11/2007

BENCH:

Dr. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT:

J U D G M E N T

CIVIL APPEAL NO. 5401 OF 2007

(Arising out of SLP (C) No. 12476 of 2007)

Dr. ARIJIT PASAYAT, J.

Leave granted.

Challenge in this appeal is to the order passed by a

Division Bench of the Bombay High Court allowing the writ

petition filed by the respondent. Challenge in the writ petition

was to the show cause notice dated 29th April, 2005 issued by

the Commissioner of Customs and Central Excise, Nagpur

(hereinafter referred to as the 'Commissioner') on the ground

that the Commissioner was seeking to re-open and re-litigate

the issues which have been finally concluded by the decision

of the High Court and this Court in favour of the writ

petitioner and, therefore, the said show cause notice was

without jurisdiction and had been issued in arbitrary exercise

of power and that it is an abuse of process of law.

The petition was resisted on the ground that at the stage

of show cause notice there should not be any inference. In fact

the notice was issued pursuant to the liberty given by this

Court in C.A.Nos. 7896-97/2003 disposed of by a three-Judge

Bench by order dated December 7, 2004. The High Court

accepted the position that normally the High Court should not

interfere at the show cause notice stage. But in view of the

factual scenario the Court entertained the writ petition and

decided in favour of the respondent.

Background facts in a nutshell are as follows:

The respondent is a manufacturer of various products

including Vicco Vajradanti and Vicco Turmeric which are

stated to be ayurvedic medicines. A show cause notice dated

8th November, 1976 was issued requiring the respondent to

satisfy as to why the said products should not be classified as

"cosmetics" and not "ayurvedic medicines". This show cause

notice is hereinafter referred to as the "Ist SCN". After hearing

the respondent, the Commissioner under order, dated 4th

June, 1977 classified the said products as "cosmetics". The

same was challenged by the respondent by way of Civil Suit

No.143 of 1978 in the Court of Civil Judge, Senior Division,

Thane, which came to be decreed in favour of the respondent

holding that the said products were "ayurvedic medicines",

and therefore, cannot be classified as "cosmetics". The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11

appellants carried the matter in an appeal by filing First

Appeal No.613 of 1982 before the High Court without any

success as the same was dismissed on 27th April, 1988

holding that the products were "Ayurvedic medicines". The

Special Leave Petition preferred by the appellants being SLP

No.1918 of 1989 was dismissed on 6th September, 1990.

Simultaneously, the respondent had also filed the Special

Leave Petition No.14082 of 1988 which came to be disposed of

by an order dated 19th April, 1993, while affirming the

judgment of this Court with a rider that the claim for refund of

the amounts already paid, would be subject to ascertaining

whether the amounts were passed on to the purchasers or not,

and that the consequential relief shall be subject to the

provisions of section 11B of the Central Excise and Salt Act,

1944 (in short the 'Act') as amended by Act 40/1991.

On 28th February, 1986, Central Excise Tariff Act, 1985

(in short 'Tariff Act') was introduced, to be effective from Ist

March, 1986. Under the Old Tariff Act, the ayurvedic

medicines fell under the Notification No.234 of 1982, the

products being listed at Sl. No.21. In term of the Tariff Act,

the product was sought to be classified by the respondent

under Chapter 30 sub-heading 3003.30 and the same was

approved by Assistant Commissioner, Nagpur, by his order

dated 6th October, 1986. Pursuant to the direction by

the Commissioner, a show cause notice dated 3rd July, 1987

was issued requiring the respondent to show cause as to why

the products should not be classified as cosmetics falling

under Chapter 33. This was the second Show Cause Notice in

relation to the same products, and hereinafter is referred to as

the "2nd SCN". After the reply being filed to the 2nd SCN, the

same was recalled under the order dated 21st June, 1989. The

matter was, however, carried in appeal before the

Commissioner of Central Excise (Appeals) but the same was

withdrawn on 26th December, 1989.

On 31St October, 1996, the Central Board of Excise

issued a circular withdrawing its earlier clarification dated 12th

May, 1989 in respect of Vicco Products and asked the

authorities to reopen and finalise the classification of Vicco

products on the basis of the judgment in Shree Baidyanath

Bhavan Vs. CCE Nagpur, reported in 1996(83) ELT 492 : 1996

(9) SCC 402. Consequently, fresh show cause notices dated 2nd

May, 1997, 18th September, 1997 and 27th October, 1997

came to be issued requiring the respondent to satisfy as to

why the products should not be classified as "cosmetic" falling

under Chapter 33. These three show cause notices are

hereinafter referred to as the "3rd SCNs". Meanwhile, by Telex

dated 8.9.1997, the Board further clarified that the circular

dated 31.10.1996 is general in nature and the Vicco products

having been subjected to the specific judgment and order of

the High Court affirmed by this Court, the circular would not

have overriding effect. The department further sought opinion

of the Law and Judiciary Department on 13.11.1997.

Thereafter, the Union of India moved an application being IA-1

of 1999 in this Court in Civil Appeal No.2123 of 1993 arising

out of the SLP No.14082 of 1988 which was filed by the

respondent for clarification of the order dated 19th April, 1993

with reference, to Shree Baidyanath's judgment (supra).

On 17.07.2000 the said application was withdrawn

stating that the authorities will act in accordance with the

provisions of law, which statement was recorded by this Court

while disposing of the said application.

On 14.5.2001 with reference to the 3rd SCNs, the Deputy

Commissioner passed orders classifying the respondent's

products as "cosmetics" falling under Chapter 33. The

respondent preferred appeal before the Commissioner of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11

Central Excise (Appeals) which came to be allowed by an order

dated 10.01.2002. The appellant carried the matter in appeal

before CEGAT, which came to be dismissed by an order dated

03.02.2003. The appellant filed special leave petition before

this Court. The same were converted into the Civil Appeals

No.7896-97 of 2003 and the appeals were dismissed by this

Court on 07.12.2004.

Again, on 29.04.2005 a fresh show cause notice came to

be issued requiring the respondent to satisfy as to why the

products should not be held as products under Chapter 33.

The same was questioned before the High Court and by the

impugned judgment the same was quashed.

The stand of the appellants in support of the appeal is

that the liberty granted by this Court in the earlier case was

on the footing that there was need for factual adjudication on

applying correct position. In the earlier round of litigation the

foundation of the revenue's case was the decision in Shree

Baidyanath Ayurved Bhawan's case (supra). This Court

categorically held in the said case as follows:

2. In this connection your kind attention is also

invited to the Board's Circular No. 11/91-CX-1

dated 19.4.03 (copy enclosed) whereby the Board

had circulated order No. 22/91-C, dated 8.1.91 of

CEGAT in the case of CCE, Indore Vs. M/s. Shree

Baidynath Ayurved Bhavan Ltd. to the fluid

formations. The Hon'ble Tribunal relying on its

earlier orders No. 438-439/85-C, dated 7.6.1985

(1985) (11) ELT 175 (tribunal) and No. 714-715/90-

C, dated 10.7.90 (1991 (51) ELT 502 (tribunal), all

in the cases of M/s. Shree Baidyanath Ayurved

Bhavan is not an Ayurvedic drug or medicine and it

is appropriately classificable under heading No.

33.06 of the. CETA, 1985. Aggrieved by the

judgments of the CEGAT the assessee had gone in

appeal to Supreme Court. The appeals of M/s.

Dabur India Ltd. on the same issue were also tagged

with the appeal of Shree Baidyanath Ayurved

Bhavan Ltd.

3. Now the Hon'ble Supreme Court vide its

judgment dated 30.3.1995 (1996 (83) ELT 392 (SC)

(copy enclosed), has dismissed the appeal of M/s.

Shree Baidyanath Ayurved Bhavan Ltd. and M/s.

Dabur India Ltd. and upheld the judgments of

CEGAT wherein it had been held that the product

"Dant Manjan Lal" is a toilet preparation and not a

medicinal preparation (Ayurvedic) and therefore not

classifiable as a medicine (Ayurvedic) and

accordingly not eligible for the benefit of exemption

notification. The judgment of Supreme Court is

being circulated to all the field formations of CBCE

for necessary action in the matter.

4. Therefore, keeping in view the aforesaid judgment

of Supreme Court the Board has decided to

withdraw its aforesaid instructions contained in

letter No.F.No.1031/14/88-CS.3 dated 12 5.1989.

You may therefore decide classification of the

goods in question in the light of Hon'ble Supreme

Court's said judgment under intimation to the

Board.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11

It was submitted that fresh materials had been

considered and it has been found that the products are to be

classified under Entry 33.04 and 33.06 and not by Entry

3003.31. Reference is also made to the Notes in Chapter 30

and Chapter 33. So far as Chapter 30's notes are concerned

reference is made to notes 1 and 2 and notes of Chapter 33

which read as follows:

"Chapter 30 1. This Chapter does not cover:

(a) Food or beverages (such as, dietetic, diabetic

or fortified food, food supplements, tonic

beverages and mineral waters) (Section IV);

(b) Plasters specially calcined or finely ground for

use in dentistry (Chapter 25);

(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;

(e) Soap or other products of Chapter 34

containing added medicaments;

(f) Preparations with a basis of plaster for use in

dentistry (Chapter 34);

(g) Blood albumin not prepared for therapeutic or

for prophylactic uses (Chapter 35).

2. For the purposes of heading No.30.03:

(i) 'Medicaments' means goods (other than foods

or beverages such as dietetic, diabetic or

fortified foods, tonic beverages) not falling

within heading No.30.02 or 30.04 which are

either:-

(a) Products comprising two or more

constituents which have been mixed or

compounded together for therapeutic or

prophylactic uses; or

(b) unmixed products suitable for such uses

put up in measured doses or in packings for

retail sale or for use in hospitals.

(ii) 'Patent or proprietary medicaments' 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

container 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;

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11

(g) The United States Pharmacopoeia;

(h) The National Formulary of the U.S.A.;

(i) The Dental Formulary of the U.S.A. and

(j) The State Pharmacopoeia of the U.S.S.R'

or which 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 a symbol, monogram, label,

signature or invented words or any writing which is

used in relation 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 right either as proprietor or

otherwise to use the name or mark with or without

any indicating of the identity of that person.

Chapter 33

2. Heading Nos. 33.03 to 33.07 apply, inter

alia, to products, whether or not mixed (other

than aqueous distillates and aqueous

solutions of essential oils), suitable for use as

goods of these headings and put up in

packings with 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 and includes

products whether or not they contain

subsidiary pharmaceutical or antiseptic

constituents or are held out as having

subsidiary curative or prophylactic value.

4. In relation to products of heading Nos.

33.03, 33.04 and 33.05, conversion of powder

into tablets, labelling or relabelling of

containers intended for consumers or

repacking from bulk packs to retail packs or

the adoption of any other treatment to render

the products marketable to the consumer,

shall be construed as 'manufacture'.

6. Heading No. 33.05 applies, inter alia, to the

following products; brilliantines, perfumed hair

oils, hair lotions, pomades and creams, hair

dyes (in whatever form), shampoos, whether or

not containing soap or organic surface active

agents".

It was submitted that the products are sold across the

counter and without prescription. The outward packings also

described as cosmetics.

The primary stand also is that the High Court should not

have interfered at the show cause notice stage.

In response, learned counsel for the respondent with

reference to history of the long drawn litigation submitted

that the High Court has rightly taken note of various factual

aspects and quashed the show cause notice.

In Dabur India Ltd. v. Commissioner of Central Excise,

Jamshedpur, (2005 (4) SCC 9), this Court reiterating its

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11

earlier decision in Commissioner of Central Excise, Calcutta v.

Sharma Chemical Works (2003 (5) SCC 60) held that merely

because a product is sold across the counters and not under

a doctor's prescription does not by itself lead to the

conclusion that it is not a medicament. It was also held that

in the product the percentage of medicament may be small

but that by itself does not ipso facto mean that the product

is not a medicament. It was held that generally the

percentage or dosage of the medicament will be such as can

be absorbed by the human body and that the medicament

would necessarily be covered by fillers/vehicles in order to

make the product usable.

In Meghdoot Gramodyog Sewa Sansthan, U.P. vs.

Commissioner of Central Excise, Lucknow (2005 (4) SCC 15)

this Court had held that the products cannot be classified as

cosmetics solely on the basis of outward packing of the

products. It was specifically held that the composition and

the curative properties of the product being admitted, it was

not open to the department to hold the product to be

cosmetics merely by reason of the outward packing.

In Naturalle Health Products (P) Ltd. v. Collector of

Central Excise, Hyderabad (2004 (9) SCC 136) it was held

that the essential character of medicine and the primary

function of the medicine is derived from the active

ingredients contained therein and it has certainly a bearing

on the determination of classification under the Act. Further

re-iterating its earlier decision in Amrutanjan Ltd. v. CCE

(1996 (9) SCC 413) this Court held that "the mere fact that

the ingredients are purified or added with some preservatives

does not really alter their character."

First round of show cause notice dated 8.11.1976

states as follows:

"M/s Vicco Laboratories Ltd. furnished

Photostat copies of the certificates bearing Nos.

A/Cert/12/75 dated 6.1.1976 and

A/Cert/388/76 dated 6.1.70 issued by Food

and Drug Administration, Maharashtra State,

Bombay in support of their claim.

M/s Vicco Laboratories, Dombivli are

hereby required to show cause to the Asst.

Collector, central Excise, Kalyan Division,

Kalyan why "Vicco Vajradanti Paste" and Vicco

Turmeric Vanishing Cream should not

continue to be classified as tooth paste. T.I.

No.14FF and Cosmetic & Toilet preparation

T.I. 14 FF respectively as these products are

marketed and are known in the Trade parlance

as tooth paste and vanishing cream and not as

Ayurvedic medicies."

Suit No.143/1998 was filed challenging the show cause

notice.

Whether the two products Vicco Vajaradanti and Vicco

Turmeric Skin Cream were Ayurvedic Medicines or

Cosmetics (toothpaste, vanishing cream, cosmetic cream)

was adjudicated in Thane Suit No.143 of 1978, where

evidence was led by the plaintiff (Vicco Laboratories) and by

the defendants (Revenue Department). Amongst the issues

framed were issue Nos. 1 to 3 reading as follows:

(i) Do Plaintiffs prove that their products

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11

Vicco Vajaradanti and Vicco Vanishing Cream

are Ayurvedic medicinal preparations?

(ii) Do Defendants prove that Vicco

Vajaradanti falls under item 14 FF of first

schedule of Central Excise and Salt Act, 1944?

(Tooth paste including dental cream)?

(iii) Do defendants prove that Vicco Turmeric

Vanishing cream falls under item 14F (1) of the

said schedule? (Cosmetic and toilet

Preparation for the care of the skin).

Eleven witnesses were examined on behalf of the

plaintiff and three witnesses on behalf of the Department.

The finding of the trial Court on issue Nos. 1 to 3 is as

follows:

"In the result the plaintiff have proved

their product Vicco Vajaradanti and Vicco

Turmeric as Ayurvedic medicinal preparations

whereas the defendants have failed that they

fall under tariff items 14FF and 14F.

Therefore, Vicco Vajaradanti is not merely a

tooth paste but a medical formulation meant

for treatment of tooth and gum trouble

whereas Vicco Turmeric does not simply give a

promise beauty but is meant for treatment of

dermatitis. Accordingly, the issue No.1 is held

in the affirmative and the issue Nos. 2 and 3 in

the negative."

In appeal No.613/1982 filed by the Department in the

Bombay High Court, the High Court by judgment dated

27.4.1988 held:

"Whether the two products are medicine or

merely tooth, paste and vanishing cream or

rather a cosmetic cream has to be decided on

this record. On the record as is available to us,

it is more than amply proved by overwhelming

evidence that the products would be excisable

under Entry 14 E and at the rates prescribed

from time to time in respect of the said entry.

The consumers and doctors, and the later

category will include the general practitioners

dentists and Ayurvedic experts, consider that

the two products are medicines and further

that they are Ayurvedic medicines. In this

respect even the first two witnesses who were

examined on behalf of the defendants were

ultimately forced, much against their

inclination, to concede that these products

were prescribed by doctors and sold by them,

under doctors' prescriptions. The third witness

examined on behalf of the defendants has not

carried the matter any further and her evidence

is almost totally useless as far as these

proceedings are concerned. In addition to this,

we have the classifications made by various

governmental authorities including the Sales

Tax Commissioner accepting the status of the

two products as Ayuvedic medicines. Last but

not the least, we have unshaken testimony of

P.W. 11 Dr Antarkar, admittedly an expert on

Ayurvedic medicines.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11

There is overwhelming evidence,

therefore, on the record which is almost one

sided-to establish that the two products under

consideration must be regarded as Ayurvedic

medicines although they may also be used as

tooth paste and are used as cosmetic cream.

The High Court however held that the plea of plaintiff

Vicco Laboratories raised an oral arguments that the

products were "exclusively ayurvedic medicines (and

therefore, wholly exempt under Entry 14E) could not be

accepted since there were no pleadings to that effect:

therefore they were taxable at 12= % as "patent and

proprietary medicines". (Entry 14E)

The respondent and the Revenue both approached this

Court by SLPs being SLP No. 14082 of 1988 (by Vicco

Laboratories) and SLP No. 1918 of 1989 (by Department)

against the judgment and order dated 27.4.1988 of the

Bombay High Court. SLP No.1918/1989 was dismissed by

this Court on 6.9.1990 whereas consent order dated

19.4.1983 came to be passed in SLP No.14082/88.

"We have heard Sri K.K. Venugopal, learned senior

counsel for the appellants and Sri K.T.S. Tulsi,

learned Additional Solicitor General for the

respondents. Leave granted.

2. The parties have broadly agreed to certain

terms for the final disposal of this appeal.

3. In terms of the said agreement the parties accept

judgment of the Bombay High Court that the

products in question are rightly classifiable as

Ayurvedic Medicines. The stand of the Revenue is

that Ayurvedic medicines are excluded from tariff

Item No. 14-E and are classifiable under tariff item

68 of the erstwhile Central Excise Tariff and entitled

to full exemption under Serial No. 21 of Notification

No. 234/82-CE dated 1st November 1982, a position

which the appellants accept.

4. The question of the refund of the amounts paid

would depend on whether the amounts were passed

on to the purchasers or not. The consequential

relief, if any, shall therefore, be subject to the

provisions of Section 118 of the Central Excises and

Salt Act, 1994 as amended by ACT 40 of 1991.

5. In terms of the compromise we affirm the

judgment of the Bombay High Court dated 27th

April, 1988 subject to the modifications indicated

above.

6. The appeal is disposed of accordingly, No.

costs."

Clarification application filed before this Court by the

Department that the Consent Order dated 19.4.1993 did not

apply to the Tariff Act was dismissed as withdrawn on

17.7.2000.

Meanwhile, the Tariff Act, came to be passed which

repealed the old Tariff Act. The new entries were:

Chapter 30 - dealt with Pharmaceutical products

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11

Chapter 33 - dealt with Essential Oils and Resinoids,

Perfumery, Cosmetic or Toilet Preparations.

Meanwhile before the judgment and order of Bombay

High Court and of this Court in Thane Suit, afresh (2nd) round

of Show cause notices for the period December 1986 to March

1989 were issued. In the show cause notice it was alleged as

follows:

"Whereas it appears that these products namely

Vicco Vajradanti Powder Paste are meant for oral or

dental hygiene and are used as tooth powder and

tooth paste, the same appear to be classifiable

under sub-heading 3306.00 and chargeable to duty

at 15%. Similarly, Vicco Turmeric appears to be a

Vanishing Cream falling under subheading 3304.00

and;

"Whereas no material change in the composition of

above mentioned products has been taken place,

these products appear to be tooth powder, tooth

paste and vanishing cream classifiable under

heading 3306.00 and 3304.00 respectively, and

Whereas, Vicco Turmeric Cream has mainly

prophylactic cosmetic effect and it cannot be

considered Ayurvedic medicine, it appears to be

Vanishing Cream only and;

Whereas as per Note 1(d) of Chapter 30-

"Preparation of Chapter 22 even if they have

therapeutic and Prophylactic properties, they are

classifiable, under Chapter 33 and are excluded

from Chapter 30 and;

Whereas, Vicco Vajradanti Powder is put up in the

form of "Dant Manjan" and paste has been put up

in the form of "Tooth Paste" and Vicco Turmeric has

been put up in the form of Cosmetic/ Vanishing

Cream; and

Whereas, for the last so many years you were

advertising and marketing these products as tooth

powder, tooth paste and vanishing cream

respectively. Accordingly, Vicco Vajradanti Powder

and Paste appear to be preparation for oral and

dental hygiene falling under sub-heading 3306.00

and Vicco Turmeric appears to be falling under sub-

heading 3304.00."

Advice was received from the Central Board of Excise and

Customs by letter dated 12.5.1989 which stated as follows:

"Sir,

Sub: Central Excise - Vicco Vajradanti (powder

and paste) and Turmeric - Classification under

the Central Excise Tariff Act, 1985 -regarding.

l am directed to refer to your letter F. No. V.

Ch. 39 (30) 1/89/ 1369, dated the 4 n

January, 1989 on the subject mentioned above

and to say that the matter of classification of

Vicco Vajradanti (powder and paste) and Vicco

Turmeric Cream manufactured by M/s Vicco

laboratories has been got examined in

consultation with he Advisor (Ayurvedic and

Siddha) in the Directorate General of Health

Services.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11

2. The Board has taken note of Note (2) to

Chapter 30 and 33 of the Schedule to the

Central' Excise Tariff Act, 1985 coupled with

the opinion of the Advisor (Ayurvedic and

Siddha) in the Directorate General of Health

Services including the decision of the Bombay

High Court feels that there are stronger

reasons to treat the subject good as Ayurvedic

medicines.

3. Accordingly, it is viewed that the above-

mentioned products would be appropriately

classifiable as Ayurvedic Medicaments under

sub-heading No.3003.30 of the Schedule of the

Central Excise Tariff Act, 1985".

At this juncture, it would be necessary to take note of

the stand of learned counsel for the appellants that in the

packages meant for export different descriptions were given.

In this context it is to be noted that in the packing meant for

export instead of the word 'Ayurved', the expression 'Herbal'

is used. The special permission was taken from the Drugs

Control Authority for such use. The letter dated 14.6.1996 of

the Government of India, Ministry of Health & Family Welfare

(Department of ISM & H) is relevant. The same reads as

follows:

"New Delhi, dated 14.6.1996

To

The Asstt. Drug Controller (India),

New Custom House, Fort,

Bombay-400038.

Sub: Export of Vicco Vajradanti Tooth Paste,

Powder and Turmeric Cream- regarding

A representation received from the firm in

regard to export of the subject products with

labeling acceptable to importing countries and

the modification made in the labels, which are

otherwise used in the country. Having

examined the matter, it is opined that there

may be no objection in export of subject

products labeled as herbal products. This

permission is limited to export purpose only.

Sd/- Illegible.

(Ashwini Kumar)

For Drug Controller General (I)

Copy to:

Shri G.K. Pendharkar,

Vicco Laboratories,

25, Jerbai Wadia Road,

Parel, Bombay -400012"

Normally, the writ court should not interfere at the stage

of issuance of show cause notice by the authorities. In such a

case, the parties get ample opportunity to put forth their

contentions before the concerned authorities and to satisfy the

concerned authorities about the absence of case for

proceeding against the person against

whom the show cause notices have been issued.

Abstinence from interference at the stage of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11

issuance of show cause notice in order to relegate

the parties to the proceedings before the concerned

authorities is the normal rule. However, the said rule

is not without exceptions. Where a Show Cause

notice is issued either without jurisdiction or in an

abuse of process of law, certainly in that case, the

writ court would not hesitate to interfere even at

the stage of issuance of show cause notice. The interference at

the show cause notice stage should be rare and not in a

routine manner. Mere assertion by the writ petitioner that

notice was without jurisdiction and/or abuse of process of law

would not suffice. It should be prima facie established to be

so. Where factual adjudication would be necessary,

interference is ruled out.

Case of the respondent that the classification

of the said products having attained finality

pursuant to the decision of this Court, the appellants have no

jurisdiction to issue impugned show cause notice on the

ground on which it has been issued and it virtually amounts

to re-opening of the issue which stands concluded by the

decision of this Court, and that therefore it is an abuse of

process of law. The High Court after referring to the history of

litigation rightly concluded that the matter stood concluded

by judgments of this Court and the High Court in respondents'

case.

In the earlier judgment this Court had given liberty to the

Department in the following terms:

"Although the adjudicating authority had

found in the course of the hearing that the market

survey indicated that the product in question was

known as a cosmetic we do not go into the question

as this was not the ground on which the show

cause notice was issued. The show cause notices

having proceeded on a misapprehension of the tests

laid down in Shree Baidyanath's case, the same

cannot be sustained.

The appeals are accordingly dismissed without

any order as to costs. It will be open to the

Department to take such test if otherwise so entitled

in respect of the products for the purpose of

classifying the products under the appropriate tariff

heading as they may be advised."

However, as rightly observed by the High Court the

impugned show cause notice was nothing but a repetition of

the earlier show cause notices with slight variations which in

no way was relatable to any different test.

When the factual scenario is considered in the

background of the legal principles set out above, the

inevitable conclusion is that the appeal is sans merit,

deserves dismissal which we direct. Costs made easy.