Relief for Hindustan Unilever: CESTAT Rules Skin Care Petroleum Jelly Variants as “Cosmetics”, Sets...

In a major relief for Hindustan Unilever Limited (HUL), the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the company's skin care products sold under the 'Vaseline' brand, which are variants of petroleum jelly, are classifiable as "cosmetics" and not as "medicaments." The excise department had sought to classify them as medicaments, which attract a higher rate of excise duty. However, the tribunal observed that these products are primarily used for skin care, softening, and protection, which aligns with the definition of cosmetics. It noted that the products were not marketed or intended for treating any specific disease. By classifying the petroleum jelly variants as cosmetics, the CESTAT has set aside the excise duty demand raised by the department, providing significant clarity on the tax classification of such popular skincare products.