TMI Blog2013 (9) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... retative Rules would apply only when the goods prima facie classifiable under 2 or more headings - Once a specific headings for a product was found, the question of considering another classification or another heading does not arise and therefore Rule 3 of Interpretative Rules was not required to be applied at all. - Decided against the assessee. Invocation of Extended Period - Imposition of penalty - The Commissioner had gone beyond the remand order and appellants could not have been visited with the demand for extended period and penalty when the Department had not even appealed against the Order-in-Original limiting the demand to the period of limitation and not imposing any penalty – Therefore the penalty imposed on the appellants was set aside and also the demand for extended period. The demand as confirmed by the Commissioner in the earlier Order-in-Original dated 16-10-1998 for the period as applicable u/s 11A of Central Excise Act, 1944 was confirmed - The appellants shall also be liable to pay interest as applicable under Section 11AB of Central Excise Act, 1944 - penalties imposed on all the appellants were set aside. - E/1188-1190/2006 - A/995-997/2011-WZB/AHD - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visited with a higher demand on an appeal filed by them and therefore Commissioner has exceeded his jurisdiction in confirming the demand for the extended period. (ii) On merits the product has to be classified under chapter notes and section notes. Chapter Note 2 to Chapter 30 provides that in a case where the product comprises of two or more constituents that are mixed or compounded for therapeutic or prophylactic uses, it would be medicament. The note also provides that if the product is an unmixed product, suitable for prophylactic or therapeutic use, it can be classified as medicament if put up in measured doses or in packings for retail sale or for use in hospitals. Therefore the necessity for a product to be put in a stage where it can be directly administered to the patients is only in the case of product with one constituent. Such a requirement is not necessary for a product falling under chapter note - 2(i)(a) which covers products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses. According to the ld. Counsel, this is a specific definition of medicament which makes the entry specific and once the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 13 (S.C.)] to submit that the words for use to be taken to mean intended for use and not actually used . (iii) He also submitted that as observed by the Hon ble High Court while remanding the matter, the reliance on the decision of the Tribunal in the case of Shanpur Industries v. CC C.Ex. [2000 (119) E.L.T. 416] is not appropriate since that decision deals with innumerable products and is an ex parte decision. 4. Ld. DR on behalf of the Revenue reiterated the earlier submissions made by him which are reproduced for convenience. Shri A. Venkatasubramanian, Senior Executive and Production Incharge had admitted that calcium gluconate manufactured by them was for industrial use and sold in unit quantity of 25 kgs. Shri DKJ Padia of M/s. Bhakthi Pharma engaged in trading of bulk drugs chemicals had stated that calcium gluconate IP in powder form was not a medicament but a chemical compound. Shri Nilesh Bhupendra Shah, Manager of M/s. Shanpur Industries, had stated that they are manufacturing calcium gluconate IP and classifying the same under sub-heading 2918.00. Shri Maheshbhai M. Mehta, Partner of M/s. Deoline Pharmaceuticals Ltd. has said that they were engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exclusively Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic 3003.20 - Medicaments (other than patent or proprietary) other than those which are exclusively used in Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic systems. 3003.30 - Medicaments, including those used in Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic systems. The ld. Advocate for the appellant relied upon the Chapter Note 2(1)(a) of Chapter 30 which reads as under :- Medicaments means goods (other than foods or beverages such as dietetic, diabetic or fortified foods, tonic beverages) not falling within heading No. 30.02 or 30.04 which are either :- (a) Products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses. The chapter note 2(i)(b) is not reproduced since it is not relevant. The ld. Advocate also relied upon the Interpretative Rules to submit that in terms of Rule 3(a) of Interpretative Rules, the heading which provides the most specific description has to be preferred to heading providing a more general description. He also relied upon Rule 3(c) to submit that when goods ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed or semi-finished form or we are not considering mixture or combination of Calcium Gluconate with something else Rule 2 would not be relevant. Rule 3 of Interpretative Rules would apply only when the goods prima facie classifiable under 2 or more headings. Once we find a specific headings for a product, the question of considering another classification or another heading does not arise and therefore Rule 3 of Interpretative Rules is not required to be applied at all. 5.3 Now we come to the several decisions relied upon by the appellants. In the case of Metroark Private Ltd. (supra), the dispute with regard to classification was between Chapter 38 and Chapter 30 and not Chapter 29 and Chapter 30. In para 5.3 of this decision, it was observed that the chapter note 1(a) of Chapter 38 specifically provides that Chapter 38 does not cover separate chemically defined elements or compounds with the exception of those which are specified therein. The Chapter Note 1(c) provides that chapter does not cover medicaments. The chapter note that the chapter does not cover medicaments under heading 30.03 is not to be found in Chapter 29. Therefore the decision which was rendered taking note o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded together for therapeutic or prophylactic uses or unmixed products, suitable for such use, put up in measured doses or in packings for retail sale or for use in hospitals. This circular is a circular which is stating the general principles of classification. It cannot be said to cover a situation where a product which is a separate chemically defined organic compound which is classifiable under Chapter 29 and finds specifically mentioned therein has to be classified under chapter 30. We do not think that this circular can be of any help to the appellant since nowhere the circular says that separate chemically defined organic compound is classifiable under Chapter 30 if it satisfied conditions of Chapter Note 2(i)(a) of Chapter 30. 5.7 Similarly the decision of the Hon ble Supreme Court in the case of Dalmia Dadri Cement Ltd. (supra) is also of no help to the appellants. In this case, it is on record that the appellants were packing the goods in 25 kgs. bags and the bags had details printed as under :- ----------------------------------- Use No Hooks ----------------------------------- Gross 25.290 Kgs Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le because even going by the labelling on the bags, the product is not intended for use for therapeutic or prophylactic use as mentioned in the chapter note. Therefore, the decision of the Hon ble Supreme Court is of no help. 5.8 Coming to the decision of the Tribunal in the case of Shanpur Industries (supra) which was relied upon in the earlier order of this Tribunal, it was submitted that it was an ex parte decision and therefore the Tribunal did not have the assistance of the assessee and the decision was rendered considering innumerable products together. The decision in the case of Shanpur Industries was rendered in the year 1999. The statement of Shri N. Nilesh Bhupender Shah, the Manager of Shanpur Industries stated that they were classifying the product under CETH 2918. The statement was recorded on 7-2-1997. The appeal number quoted in the order of the Tribunal is E/5424/92-C which would show that the appeal was filed in 1992. Therefore, at the time of recording statement, the appeal was pending. Thereafter when the matter came up for consideration in 1999, M/s. Shanpur Industries was not represented at all. This goes to show that Shanpur Industries had come to the concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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