According to government officials, the decision to implement the rule is to establish whether a product is being classified rightly as a cosmetic or medicament, as cosmetic suppliers are taxed an central excise duty of 15%.
Referring then to the Central Excise Act, news publication on the region, the Times of India flagged up that the bench found preparations for skin care or colour cosmetics were those to be classified as cosmetics and that medicinal preparations used to treat certain skin complaints should also be categorized as medicaments.
In the country, cosmetic products are described as enhancing or improving a person's appearance or beauty, whereas medicinal products are used to treat or cure some medical condition.
According to official Justice Joseph; "If a product comprises of two or more constituents mixed or compounded together for therapeutic or prophylactic use, the same is to be covered under medicament."
Setting a standard to avoid confusion in the industry
The issue was recently brought before the judicial system in Mumbai, which wanted to tax the product 'Moisturex' as cosmetics, even though its' producer claimed it to be a medical product.
Applying the law to the dispute whether 'Moisturex' was a medicine or cosmetic, the bench said; "The use of the cream is not for the care of the skin. 'Moisturex' is also not primarily intended to protect the skin from sun, tan or dryness, etc. On the other hand, it is intended for treating or curing the dry skin conditions of the human skin and for a few other skin complaints like fissure feet, dry scaly skin conditions, ichthyosis, etc."
The excise department said if it was a medicament as claimed by the producer, it should have been sold under doctor's prescription and not over the counter like any other cosmetic. However the bench rejected this argument stating that; "If a product is sold without a prescription of a medical practitioner, it does not lead to the immediate conclusion that all products that are sold over/across the counter are cosmetics. There are several products that are sold over-the-counter and are yet, medicaments."