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Moisturex cream is a medicine and attract duty at 15%

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


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:

1) 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.
2) 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) - COMMISSIONER OF CENTRAL EXCISE, MUMBAI-IV V. CIENS LABORATORIES (2013) 38 taxmann.com 337 (SC)

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