Holding

A show‑cause notice that re‑opens a matter already finally decided is an abuse of process and may be quashed; the 2005 notice was therefore invalid.

Summary

Vicco Laboratories manufactures products such as Vicco Vajradanti and Vicco Turmeric, which it claims are Ayurvedic medicines. The Central Excise authorities repeatedly issued show‑cause notices (1976, 1987, 1997, 2005) seeking to re‑classify these products as cosmetics under the Central Excise Tariff Act, 1985. Earlier litigation before the High Court and this Court had finally held that the products are Ayurvedic medicines and not cosmetics, granting exemption under the tariff. The 2005 notice was challenged by a writ petition; the Bombay High Court quashed it, holding the notice to be an abuse of process. On appeal, the Supreme Court reiterated that writ courts may interfere with a show‑cause notice only when it is issued without jurisdiction or as an abuse of process, and that the 2005 notice re‑opened a matter already finally decided, thus constituting an abuse of process. Consequently, the appeal was dismissed and the High Court’s order upheld.

Issues considered

Whether a writ court can interfere with the issuance of a show‑cause notice issued by the revenue authorities.
Whether the 2005 show‑cause notice re‑opening the classification of Vicco products is ultra vires and an abuse of process of law.
Whether the products in question should be classified as Ayurvedic medicines under Chapter 30 or as cosmetics under Chapter 33 of the Central Excise Tariff.

Legislation cited

Central Excise and Salt Act, 1944s. 11, s. 118
Central Excise Tariff Act, 1985

Subjects

show cause noticeclassificationcosmeticsayurvedic medicinescentral exciseabuse of processjurisdictiontariff classificationwrit petitionSupreme Court

Judgment

.._
A UNION OF INDIA AND ANR.
v.
VICCO LABORATORIES

NOVEMBER 26, 2007
B
(DR. ARIJIT PASA YAT AND P. SATHASIVAM, JJ.]
\..

Central Excise TariffAct, 1985-TariffEntry 33. 04 and 33. 06-
Assessee manufacturing products as 'ayurvedic medicines '-Revenue
C issuing Show Cause Notice seeking classification of the products as
'cosmetics '-On earlier occasions move ofthe Revenue to classify the
product as 'Cosmetics' decided by High Court and Supreme Court in
favour of the assessee--Show Cause Notice challenged in Writ
Petition-Allowed by High Court-On appeal, held : Show Cause
D Notice is liable to be quashed-It was merely a repetition of earlier
show Causes Notices with slight variation-the matter stood concluded
by previous judgments of High Court and Supreme Court.
Jurisdiction-Jurisdiction of Writ Court-To interfere with Show
E Cause Notice-Scope of-Held: interference with Show Cause Notice
should not be in a routine manner-It should be only in rare cases where
it is issued either withoutjurisdiction or in an abuse ofprocess ofLaw-
Where factual adjudication would be necessary, interference is ruled
out.
F
Respondent was a manufacturer of various products including
'Vicco Vajrudanti' and 'Vicco Termeric' which were stated to be
'ayurvedic medicines'. Authorities issued Show Cause Notice in 1976
seeking classification of the products as 'cosmetics' and not 'ayurvedic
medicines'. The matter had been ultimately decided by Supreme Court
G in favour of the respondent by order dated 19.4.93. The application for
clarification of this order was dismissed as withdrawn. After introduction
of Central Excise Tariff Act, 1985, authorities in 1987 issued Show
Cause Notice in respect of the same products, seeking their
H 534
UNION OF INDIA v. VICCO LABORATORIES 535

classification as 'cosmetics'. The appeal thereagainstwas withdrawn. A
In 1996 again, Central Board of Excise by way of a Circular asked the
authorities to reopen and finalize the classification of the products on
the basis ofa judgment ofSupreme Court. However the Board clarified
that the Circular would not have overriding effect over the judgments
of High Court and Supreme Court in respect of the Vicco products. B
Pursuant to the Circular, three Show Cause Notices were issued and
the products were classified as 'cosmetics'. The dispute againstthe same
was finally decided in favour of the respondent by Supreme Court.

Thereafter again in 2005, authorities issued Show Cause Notice C
seeking clarification of the products as 'cosmetics.' Respondents filed
Writ Petition against the Show Cause Notice on the ground that the
Notice was seeking to re-open and re-litigate the issues which had been
finally concluded by the decisions of High Court and Supreme Court;
and thatthe Notice was without jurisdiction and was issued in arbitrary D
exercise of power and was an abuse ofprocess oflaw. High Court decided
in favour of the respondent Hence the present appeal.
Dismissing the appeal, the Court

HELD: 1. Normally, the writ court should not interfere at the stage E
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 about the absence of case for proceeding against
the person against who the show cause notices have been issued.
However, the general rule ofabstinence from interference in such cases, F
is not without exceptions. Where a Show Cause notice is issued either
without jurisdiction or in an abuse of process oflaw, certainly in that
case, the writ court would not hesitate to interefere even at the stage of
issuance of show cause notice. The intereference at the show cause
notice stage should be rare and not in a routine manner. Mere assertion G
by the writ petitioner that notice was without jurisdiction and/or abuse
of process oflaw should not suffice. It should be primafacie established
to be so. Where factual adjudication would be necessary, interference
is ruled out [Para29] (550-E,F,G; 551-A]
H
536 SUPREME COURT REPORTS [2007] 12 S.C.R.

A 2. The classification of the products in question 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 sta'nds concluded by the decision of this Court, and that therefore
B it is an abuse of process oflaw. The High Court after referring to the
history oflitigation rightly concluded that the matter stood concluded
by judgments of this Court and the High Court in respondents' case.
The impugned show cause notice was nothing but a repetition of the
earlier show cause notices with slight variations which in no way was
c relatable to any different test. [Paras 30 and 32] [551-A, B, C, F]
Meghdoot Gramodyog Sewa Sansthan, UP. v. Commissioner of
Central Excise, Lucknow, [2005) 4 SCC 15; Natura/le Health Products
(P) Ltd. v. Collector ofCentral Excuse, Hyderabad, [2004) 9 SCC 136;
D andAmrutanjanLtd. v. CCE, [1996) 9 SCC 413, referred to.
CIVIL APPELLATE JURlSDICTION: Civil Appeal No. 5401 of
2007.
From the Judgment and Order dated 7.10.2006 of the High Court
of Judicature at Bombay, Nagpur Bench in W.P. No. 2913/2005.
E
A. Subba Rao and B. Krishna Prasad for the Appellants.
F.S. Nariman, Gopal Jain, Raj Nagrani, R.N. Jaranjawala, Nandini
Gore, Pragya Singh Baghel, Simran Brara, Manik Karanjawala and
F Subhash Sharma for the Respondents.
The Judgment of the Court was delivered by
DR. ARIJIT PASAYAT, J. l. Leave granted.

2. Challenge in this appeal is to the order passed by a Division Bench
G 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-
H
>
UNION OF INDIA v. VICCO LABORATORIES 537
[PASAYAT,J.]
litigate the issues which have been finally concluded by the decision of A
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 ~buse of process of law.
3. 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 B
issued pursuant to the liberty given by this Court in C.A.Nos. 7896-97I
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 C
favour of the respondent.
4. Background facts in a nutshell are as follows:
The respondent is a manufacturer of various products including Vicco D
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 "1st SCN". After hearing the E
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 SuitNo.143of1978 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", F
and therefore, cannot be classified as "cosmetics". The 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 G
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 H
538 SUPREME COURT REPORTS [2007] 12 S.C.R.

A amounts were passed on to the purchasers or not, and that the
consequential relief shall be subject to the provisions of section 11 B of
the Central Excise and Salt Act, 1944 (in short the 'Act') as amended
by Act 40/1991.
5. On 28th February, 1986, Central Excise Tariff Act, 1985 (in short
B 'Tariff Act') was introduced, to be effective from 1st March, 1986. Under
the Old Tariff Act, the ayurvedic medicines fell under the Notification
No.234of1982, the products being listed at SI. 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
C 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
D 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.
E
6. On 31 '1 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
F Baidyanath Bhavan v. CCE Nagpur, reported in (1996) 83 EL T 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
G 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
H department further sought opinion of the Law and Judiciary Department
}

UNION OF INDIA v. VICCO LABORATORIES 539
(PASAYAT,J.]
on 13.11.1997. Thereafter, the Union of India moved an application being A
IA-1 of 1999 in this Court in Civil Appeal No.2123of1993 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).
B
7. On 17.07.2000 the said application was withdrawn stating that
the authorities will act in accordance with the provisions oflaw, which
statement was recorded by this Court while disposing of the said
application.
8. On 14.5.2001 with reference to the 3rd SCNs, the Deputy C
Commissioner passed orders classifying the respondent's products as
"cosmetics" falling under Chapter 33. The respondent preferred appeal
before the Commissioner of Central Excise (Appeals) which came to be
allowed by an order dated I 0.01.2002. The appellant carried the matter
in appeal before CEGAT, which came to be dismissed by an order dated D
03.02.2003. The appellant filed special leave petition before this Court.
The same were converted into the Civil Appeals No.7896-97 of2003
and the appeals were dismissed by this Court on 07 .12.2004.
9. Again, on 29.04.2005 a fresh show cause notice came to be E
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.
10. The stand of the appellants in support of the appeal is that the F
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 oflitigation 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: G
2. In this connection your kind attention is also invited to the
Board's Circular No. 11/91-CX-l dated 19.4.03 (copy enclosed)
whereby the Board had circulated order No. 22/91-C, dated
8.1.91 ofCEGAT in the case ofCCE, Indore v. Mis. Shree H
{

540 SUPREME COURT REPORTS [2007] 12 S.C.R.

A 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) ELI 502 (tribunal), all in the
cases of Mis. Shree Baidyanath Ayurved Bhavan is not an
B 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 Mis. Dabur India Ltd. on the same
issue were also tagged with the appeal of Shree Baidyanath
c Ayurved Bhavan Ltd.
3. Now the Hon'ble Supreme Court vide its judgment dated
30.3.1995 (1996 (83) ELI 392 (SC) (copy enclosed), has
dismissed the appeal of Mis. Shree Baidyanath Ayurved Bhavan
D
Ltd. and Mis. 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.
E
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.
F 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.
11. It was submitted that fresh materials had been considered and it
G 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:
H
UNION OF INDIA v. VICCO LABORATORIES 541
[PASAYAT,J.]
-"""
"Chapter 30 I. This Chapter does not cover: A

(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 B
(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 c
prophylactic properties;
(e) Soap or other products of Chapter 34 containing added
medicaments;
(t) Preparations with a basis of plaster for use in dentistry
D
(Chapter 34);
(g) Blood albumin not prepared for therapeutic or for prophylactic
uses (Chapter 35).
2. For the purposes of heading No.30.03:
E
(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 F
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 G
> __..,- 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 H
542 SUPREME COURT REPORTS [2007] 12 S.C.R.

A publications, namely:-
(a) The Indian Pharmacopoeia;
(b) The International Pharmacopoeia;
(c) The National Fonnulary oflndia;
B
(d) The British Pharmacopoeia;
(e) The British Pharmaceutical Codex;
(t) The British Veterinary Codex;
c (g) The United States Pharmacopoeia;
(h) The National Fonnulary of the U.S.A.;
(i) The Dental Fonnulary of the U.S.A. and
G) The State Pharmacopoeia of the U.S.S.R'
D
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
E 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.
F 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
G 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 fonn 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
H or prophylactic value.
UNION OF INDIA v. VICCO LABO RA TORIES 543
[PASAYAT,J.]
4. In relation to products of heading Nos. 33.03, 33.04 and 33.05, A
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'. B

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".
c
12. It was submitted that the products are sold across the counter
and without prescription. The outward packings also described as
cosmetics.
13. The primary stand also is that the High Court should not have D
interfered at the show cause notice stage.
14. 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. E

15. In Dabur India Ltd. v. Commissioner of Central Excise,
Jamshedpur, [2005] 4 SCC 9, this Court reiterating its earlier decision
in Commissioner of Central Excise, Calcutta v. Sharma Chemical
Works, [2003] 5 SCC 60, held that merely because a product is sold F
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 G
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.
16. In Meghdoot Gramodyog Sewa Sansthan, UP. v.
H
544 SUPREME COURT REPORTS [2007] 12 S.C.R.

A 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
B cosmetics merely by reason of the outward packing.
17. In Natura/le 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
C 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 inAmrutanjan 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."
D 18. First round of show cause notice dated 8.11.1976 states as
follows:
"Mis Vicco Laboratories Ltd. furnished Photostat copies of the
certificates bearing Nos. A/Cert/12/75 dated 6.1.1976 and A/Cert/
E
388/76 dated 6.1. 70 issued by Food and Drug Administration,
Maharashtra State, Bombay in support of their claim.
Mis 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
F 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."
G
Suit No.143/1998 was filed challenging the show cause notice.
14. 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
H
~-

UNION OF INDIA v. VICCO LABORATORIES 545
[PASAYAT, J.]
~

of 1978, where evidence was led by the plaintiff (Vicco Laboratories) A
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 Vicco Vajaradanti and
Vicco Vanishing Cream are Ayurvedic medicinal preparations?
B
~
(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 c
under item 14F (1) of the said schedule? (Cosmetic and toilet
Preparation for the care of the skin).
20. 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: D

"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 E
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. I is held in the affirmative and the issue
Nos. 2 and 3 in the negative." F
21. 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 G
,; _,, 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 H
546 SUPREME COURT REPORTS [2007] 12 S.C.R.

A 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
B 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
c including the Sales Tax Commissioner accepting the status of the
two products as Ayurvedic medicines. Last but not the least, we
have unshaken testimony ofP.W. 11 Dr. Antarkar, admittedly an
expert on Ayurvedic medicines.
There is overwhelming evidence, therefore, on the record which
D
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.
E 22. 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 12Y2 % as "patent and proprietary
F medicines". (Entry 14E)
23. 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
G 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
H
UNION OF INDIA v. VICCO LABORATORIES 547
[PASAYAT,J.]
General for the respondents. Leave granted. A

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 B
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 C
which the appellants accept.
4. The question of the refund of the amoi.Jnts 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 D
provisions of Section 118 of the Central Excises and Salt Act,
1994 as amended by ACT 40 of 1991.
5. In tenns of the compromise we affirm the judgment of the
Bombay High Court dated 27th April, 1988 subject to the
modifications indicated above. E
6. The appeal is disposed of accordingly, No. costs."
24. 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. F
25. Meanwhile, the Tariff Act, came to be passed which repealed
the old Tariff Act. The new entries were:
Chapter 30 - dealt with Pharmaceutical products
G.
Chapter 33 - dealt with Essential Oils and Resinoids, Perfumery,
Cosmetic or Toilet Preparations.
26. Meanwhile before the judgment and order of Bombay High Court
and of this Court in Thane Suit, afresh (2nd) round of Show cause notices H
548 SUPREME COURT REPORTS [2007] 12 S.C.R.

A 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
B
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
c 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
D
to be Vanishing Cream only and;
Whereas as per Note l(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
E 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/
F 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
G hygiene falling under sub-heading 3306.00 and Vicco Turmeric
appears to be falling under sub-heading 3304.00."
27. Advice was received from the Central Board of Excise and
Customs by letter dated 12.5.1989 which stated as follows:
H
>
UNION OF INDIA v. VICCO LABORATORIES 549
--* [PASAYAT,J.]
"Sir, A
Sub: Central Excise - Vicco Vajradanti (powder and paste) and
Tunneric - Classification under the Central Excise Tariff Act, 1985
-regarding.

, I am directed to refer to your letter F. No. V. Ch. 39 (30) 1189/ B
,<
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 Tunneric Cream manufactured by
Mis Vicco laboratories has been got examined in consultation with
he Advisor (Ayurvedic and Siddha) in the Directorate General of c
Health Services.
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 D
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 E
under sub-heading No.3003.30 of the Schedule of the Central
Excise Tariff Act, 1985".
28. At this juncture, it would be necessary to take note of the stand
oflearned 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 F
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 ofISM & H) is
relevant. The same reads as follows: G
-" ~

"New Delhi, dated 14.6.1996

H
550 SUPREME COURT REPORTS [2007] 12 S.C.R.

A To
The Asstt. Drug Controller (India),
New Custom House, Fort,
Bombay-400038.
Sub: Export of Vicco Vajradanti Tooth Paste, Powder and
B
Turmeric Cream- regarding·
A representation received from the furn 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
c 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.
Sci/- Illegible.
(Ashwini Kumar)
D For Drug Controller General (I)
Copy to:
Shri G.K. Pendharkar,
Vicco Laboratories,
25, Jerbai Wadia Road,
E Pare!, Bombay -400012"
29. Nonnally, 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
F 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 issuance of show cause notice in order to relegate the parties to the
proceedings before the concerned authorities is the normal rule. However,
G the said rule is not without exceptions. Where a Show Cause notice is
issued either without jurisdiction or in an abuse of process oflaw, 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
H by the writ petitioner that notice was without jurisdiction and/or abuse of
UNION OF INDIA v. VICCO LABORATORIES 551
[PASAYAT,J.]
process oflaw would not suffice. It should be prima facie established to A
be so. Where factual adjudication would be necessary, interference is ruled
out.
30. Case of the respondent that the classification of the said products
having attained finality pursuant to the decision of this Court, the appellants B
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 oflaw. The High Court after referring
to the history oflitigation rightly concluded that the matter stood concluded C
by judgments of this Court and the High Court in respondents' case.
31. 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 D
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. E
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 F
may be advised."
32. 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. G
33. 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.
K.K.T. Appeal dismissed. H