The Hindu Business Line : Oily twist to a hairy tale

WHERE there is a will there is a lawsuit, said Addison Mizner. "A lean compromise is better than a fat lawsuit," counsels George Herbert. But Gore Vidal looks at a brighter side when remarking, "Litigation takes the place of sex at middle age."

For the non-litigants too, there can be a vicarious engagement, when thumbing through legal journals! Such as what I find in a recent issue of Excise Law Times.

Let me begin with the P.K. Biswal case that came up before the Mumbai tribunal, because it is about scarf, from a 100-per cent export oriented unit registered in Gujarat. When the consignment "declared to contain scarves" arrived at the container depot in Delhi, the authorities were of the view that the valuation of the goods given in the shipping bill was "very high."

More worryingly, the scarves were substandard. "They appeared to be cutting from saree materials." What a sorry tale, that is, of our export! I fear if some other exporter is shearing dhotis into handkerchiefs or bandanas.

From that headgear problem, let's move on to head and hair, to see what happened in the Kerala Ayurvedic Pharmacy Ltd case that the Bangalore tribunal had to decide upon. The dispute was whether `Kesini Hair Oil' manufactured by the company should be classified as `proprietary Ayurvedic medicine' as the assessee wanted, or as `a preparation for hair' as the department preferred.

At the commissioner (Appeals) level, the decision was in favour of the company, on the reasoning that "ingredients used in the product are from authorised texts on Ayurveda." But the tribunal was not impressed with that line of thinking.

"While such authoritative texts may be useful to determine whether a particular product is an Ayurvedic medicine or an allopathic medicine, they cannot be made the basis for determining classification of goods," said M. Moheb Ali, tribunal member.

He pointed out, "It is nobody's case that the product is not a preparation for hair." He then went on to apply the principles of classification laid down by the apex court in the Alpine Industries case. "The mere fact that a product has some curative effect is not enough to classify the product as a medicament," the court had then said. Also of assistance to Moheb Ali was a tribunal decision in the Arya Vaidya Pharmacy (CBE) Ltd case, where `Kesini' powder was held to be a preparation for hair.

Then came an oily twist in the hairy tale. The company claimed that its product is "applied to the scalp and not to hair," and so argued that the oil in question is not a preparation for hair. "Untenable," observed Moheb Ali, in his own earthy style. "One has to apply this product on one's hair before it reaches the scalp," he said matter-of-factly, to remind the company of some fundamental facts.

That may remind you of what Portia tells Shylock in The Merchant of Venice: "Therefore prepare thee to cut off the flesh. Shed thou no blood, nor cut thou less nor more but just a pound of flesh."

Soaps, creams and even toothpastes claim to have therapeutic value, noted Moheb Ali. It is difficult to classify these products as medicaments on that score, he reasoned. "The fact that the respondents have a drug licence to manufacture this product does not still mean that it is a medicament," he ruled. It is quite likely that the verdict would have sounded like a bitter medicament for the company.

If the bald are chuckling that they wouldn't need the oil in any case, let me add to their merriment with this quote of Lucius Annaeus Seneca: "I don't consider myself bald, I'm just taller than my hair."

ExParte@TheHindu.co.in

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