Summary
The Supreme Court has ruled in favour of Patanjali Ayurved in a 23-year-old customs classification case involving ‘Amla Juice’. The verdict clarifies tariff interpretation under the Customs Act, 1962 and provides relief to importers and manufacturers facing similar disputes.
Supreme Court Ruling A Win for Patanjali After 23-Year Customs Battle
The Supreme Court has ruled in favour of Patanjali in a significant customs classification case that spanned over 23 years. This ruling, centred on customs duty dispute on Amla juice, clarifies the classification of Ayurvedic preparations under Indian customs law.
Let’s break it down for Indian importers, tax professionals, and small businesses.
Background of the Customs Dispute
- Year of origin: 2001
- Customs Dept. classified it under Chapter 20: Fruit Juices → Higher duty
- Patanjali argued it should fall under Chapter 30: Medicaments → Lower or nil duty
Supreme Court Verdict: Key Highlights
✅ Classification as Medicament:
The SC bench upheld Patanjali’s stand that the product is medicinal, not food-based.
✅ Precedents Followed:
Court relied on past rulings like CCE v. Sharma Chemical Works and CCE v. Wockhardt Life Sciences Ltd.
✅ Rejection of Sole Ingredient Test:
Just because it contains fruit (Amla) doesn’t mean it is to be taxed as juice.
✅ Customs Act Considered:
The ruling clarified interpretation under the Customs Tariff Act, 1975 and aligned it with Excise and GST principles on classification.
Why This Matters for Indian Taxpayers
If you are in:
- Ayurvedic or herbal product manufacturing
- Health supplements or nutraceuticals
- Importing plant-based products
This ruling may help you challenge misclassification by customs authorities and reduce your tax liability.
Expert View
“This is a classic case where intent and usage must prevail over physical composition. The ruling will benefit many genuine Ayurvedic and herbal product makers who were previously taxed unfairly.”
– Tax Practitioner, Mumbai
Key Legal References
- Supreme Court Judgment: Commissioner of Customs vs. Patanjali Ayurved Ltd & Divya Pharmacy (2025)
- Customs Tariff Act, 1975
- Relevant Tariff Entries: Chapter 20 vs. Chapter 30
- Case laws cited:
- CCE v. Wockhardt Life Sciences Ltd. (2012)
- CCE v. Sharma Chemical Works (2003)
For detailed customs notifications and tariff schedules, visit: https://www.cbic.gov.in
Practical Steps for Businesses
Here’s what importers and manufacturers should do:
| Action Point | Why It Matters |
|---|---|
| Review your product classification | Ensure alignment with this judgment |
| Consult a customs expert | Rulings like this can help avoid future litigation |
| Maintain product documentation | Especially for Ayurvedic claims, therapeutic use |
| Use judicial precedents | In replies to show-cause notices or litigation |
Frequently Asked Questions (FAQs)
Q1. Does this judgment apply to all Ayurvedic products?
No. But it strengthens the case for products with medicinal claims and formulations based on classical Ayurvedic texts.
Q2. Will this impact GST classification too?
Possibly yes. GST also relies on intent and usage, so this may be cited in future GST disputes.
Q3. Can businesses apply for refunds on past duty paid?
Only if litigation was open or refund claim made within the limitation period.
Final Thoughts
The Patanjali customs dispute ruling is a reminder that product classification under customs laws must consider purpose and usage, not just ingredients. It sets a strong precedent for Ayurvedic manufacturers and importers to defend their positions.