9911796707
TMI Blog1998 (5) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,98,56,450/- imposed as penalty on the applicants herein for contravention of the relevant Central Excise Rules. The demand arises consequent on classification of the extracts by the Central Excise authorities under CET sub-heading 1301.90. On the other hand the applicants contend that the extracts are for therapeutic or prophylactic use and being obtained by extraction from the medicinal plants/herbs without addition of any preservatives, are not marketable and hence not `goods' within the meaning of the Central Excise Law. In the alternative, it is their claim that they fulfil the definition of medicaments as contained in Note 2 to Chapter 30 and, therefore, fall for classification under that Chapter, in which event they are not liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the findings contained in the impugned order regarding marketability of the vegetable extracts in view of which they have been held to be goods attracting levy of excise duty. Regarding the alternate claim for classification under Chapter 30, he submits that, as rightly held by the adjudicating authority, only products which are directly capable of being put to therapeutic or prophylactic use would qualify as medicaments in terms of Note 2 to Chapter 30 and since the extracts are used as intermediate products in the manufacture of ayurvedic medicines, the extracts themselves cannot be considered as medicaments falling under Chapter 30. The learned JCDR contends that the extended period of limitation is available since the applicants did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(d) to Chapter 13 excludes medicaments falling under Chapter 30 from the coverage of Chapter 13. The CBEC Circular dated 16-9-1997 on which the applicants have prima facie rightly relied, reads as under : Circular No. 334/50/97-CX F. No. 102/11/94-CX. 3 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs New Delhi, the 16th September, 1997 To All Chief Commissioners of Central Excise & Customs, All Commissioners of Central Excise & Customs, All Commissioners of Central Excise, All Commissioners of Central Excise (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese are subjected to fermentation which gives rise to self generated alcohol, they go out of the purview of CETA, 1985 in view of Chapter Note 4 to Chapter 30 and attract duty under the Medicinal & Toilet Preparations (ED) Act, 1955. Rule 66 of the M & TP Rules, 1956 also makes it clear that medicinal preparations containing self generated alcohol are chargeable to duty under the M & TP Act. In this connection attention is drawn to the judgment of Supreme Court in the case of M/s. Baidyanath Ayurved Bhavan (P) Ltd. [1971 (1) SCR 590] wherein it has been held that in order to attract duty under the M & TP Act, all that is required is that a medicinal preparation should contain alcohol. Alcohol may be part of the preparation either because i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 30.03 of the Central Excise Tariff. Single ingredient extracts are classifiable under Chapter 13 of the Central Excise Tariff. However, single ingredient extracts when put up in measured doses for therapeutic or prophylactic purposes or in forms of packings for retail sale for such purposes are appropriately classifiable under Heading 30.03 of the Central Excise Tariff. 6. All pending disputes/assessments on the issue may be settled in the light of these guidelines. 7. Field formations and trade may be advised suitably. 8. Receipt of this Circular may please be acknowledged. Hindi version is enclosed. &ems ..... X X X X Extracts X X X X X X X X Extracts X X X X
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