2004 (8) TMI 473 - AT - Central Excise

Summary

Issues: Classification of Medicaments under Central Excise Act

Detailed Analysis:

1. Classification of Product Gripe Water under Central Excise Tariff Act:
The appellants, as manufacturers of Medicaments, filed a classification list for Gripe Water under Chapter 30 of the Central Excise Traffic Act, 1985, claiming classification under 3003.39. They started clearing the product at a rate of 8% ad valorem under that heading. However, a differential duty of 10% was directed to be paid by the Superintendent, leading to a show cause notice demanding duty differential, penalty, and interest under 3003.10. The Commissioner (Appeals) upheld the order, prompting the appeal.

2. Factors Considered by CCE (Appeals):
(a) The product was found to consist of only two ingredients known in Ayurvedic Sciences, while other ingredients were not recognized as Ayurvedic. The product was not considered Ayurvedic in common parlance as per Board instructions.
(b) Although all ingredients were mentioned in Ayurvedic books, there was no formula or relationship of ingredients narrated, and no expert opinion supported the product as an Ayurvedic preparation.
(c) End-use factors were not relied upon by the adjudicator, denying the benefit of previous decisions.
(d) The case of Panama Chemical Works was deemed inapplicable due to the absence of a notice from the Drug Controller.
(e) The presence of certain ingredients in small quantities did not qualify the product as an Ayurvedic preparation.
(f) Approvals from the Food & Drug Administration were insufficient to prove the product's Ayurvedic nature.

3. Tribunal's Findings on Classification:
(a) The entity under consideration contained active Ayurvedic ingredients along with inactive preservatives and stabilizers. The active ingredients were acknowledged as Ayurvedic, leading to classification under 3003.30.
(b) The Tribunal referenced legal precedents to support the classification of products based on Ayurvedic ingredients, disregarding the percentage of ingredients.
(c) Given the classification under 3003.30, other issues like time-bar and demands made by the Superintendent were deemed unnecessary for discussion, as no further duty demands were upheld, leading to no penalty imposition.

4. Conclusion:
The Tribunal set aside the previous orders and upheld the classification of the product under 3003.30 as a Medicament. The appeals were allowed based on the findings.

This detailed analysis highlights the classification issues surrounding the Medicaments under the Central Excise Act, emphasizing the importance of Ayurvedic ingredients in determining the classification of such products.