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2015 (12) TMI 1443 - CESTAT AHMEDABAD

2015 (12) TMI 1443 - CESTAT AHMEDABAD - 2016 (333) E.L.T. 474 (Tri. - Ahmd.) - Classification of “Primosa” and “Simrose” - Medicaments or fixed vegetable oils - Classification under Sub-heading No. 15159091 or under Sub-heading No. 30049069 - enhancement of penalty - Held that:- tribunal in appellant’s own case held that the “Primosa” and “Simrose” which are encapsulated fixed vegetable oil,classifiable under Heading No. 15.03 of CETA as fixed vegetable oil. In that case, the Revenue contended t .....

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f CETA, fatty acid of Section VI of CETA would not cover in Chapter 15. Section VI of CETA covers “Products of Chemical or allied industries.”

In the present case, EPO is edible grade oils and sold as EPO in capsules with the name of “Primosa” and “Simrose.” We find that the similar issue was raised before the Tribunal in the case of M/s. Supreme Enterprises (2015 (2) TMI 954 - CESTAT MUMBAI).

This product is of Amazon origin and inca inchi oil is a natural oil extracted f .....

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and the dispute was raised by Central Excise Authorities - products “Primosa” and “Simrose” would be classifiable under Heading No. 15159091 of CETA and not under sub-heading No. 30049069 of CETA and the demand of duty alongwith interest and penalty cannot be sustained. The impugned orders are set-aside - Decided in favour of assessee. - Appeal No : E/541/2008, Appeal No : E/1841/2009, E/561/2008, E/13984/2013 In Application No : E/ROA/10669-10672/2015 - Order No. A/11787-11790/2015 - Dated:- 2 .....

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se applications for restoration of appeals. Earlier, after hearing the ROA application, the Tribunal observed that there is a sufficient reason for restoration of appeal. As the appeals of 2008, it was decided to take up the appeal hearing. The Learned Authorised Representative for the Revenue requested time to prepare on the appeal and it was adjourned today. Accordingly, after restoring the appeals in its original number, we proceed to decide the appeals. 3. M/s. Universal Medicare Pvt. Ltd. ( .....

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iod from January 2006 to March 2013, proposed by eleven show cause notices issued from time to time. Revenue also filed appeal for enhancement of penalty against order dated 28.02.2008, which was not listed today. As per direction of the Bench, Revenue appeal would be linked with the present appeals and treated to be listed in the day s list. 4. After hearing both the sides and on perusal of the records, we find that the dispute relates to the products namely Primosa capsules and Simrose capsule .....

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eir own case M/s Banner Pharmacaps (I) Pvt. Ltd. Vs Commissioner of Central Excise, Bangalore 2005 (183) E.L.T. 151 (Tri.-Bang), upheld by the Hon ble Supreme Court by judgement dated 11.12.2006 in Civil Appeal D. No(s) 24783 of 2006. It has been held that Primosa and Simrose , which are encapsulated fixed vegetable oils, classifiable under heading No. 15.03 of CETA, as fixed vegetable oil. He also submits that the said decision was followed by the Tribunal in the case of M/s Supreme Enterprises .....

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Chapter 21 of CETA as Misc. Edible preparation not elsewhere specified. In the present case, the Adjudicating Authority held that it is covered under Chapter 30 of the CETA and had given sufficient reason. He further submits that the main issue in this case is that the appellants declared the goods in question contained Fatty Acids, which is not covered under Chapter 15. As per Chapter Notes 1 (e) of Chapter 15, Fatty Acids are specifically excluded from this chapter. It is contended that this i .....

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ntity by putting it in tablet form and mere fact of appellant having marketed it as a food supplement by itself will not be a ground to classify it as a food supplement when it is not food supplement in terms of the HSN Explanatory Note. Furthermore, Chapter 21 is attracted only when the requirements of HSN Note, as extracted supra, is satisfied. The impugned items do not fall in any of the various sub-headings under Chapter 21, as extracted supra. For the purpose of bringing the item under Chap .....

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going by para 16 of HSN Explanatory Notes at pg. 276, which has also been extracted, we do not find the item satisfying the criteria laid down in Chapter 21. 11. There is no mixing of vitamin or iron as the item continues to be the same as vegetable oil under Chapter 15. The ingredients are not added in the impugned items and resultant product does not come under CH 2108.99 as Edible preparations not elsewhere specified or included . Hence, the classification adopted by the Commissioner in the p .....

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fixed oil obtained from the seeds of Oenothera Biennis containing Linolenic Acid with some Gamolenic Acid. The EPO is first analyzed as per the specifications upon receipt. The EPO is subjected to inspection to ensure that the same is as per the required specifications. The required quantity for a batch is dispensed in Medicine Tank, which is staged in the dispensing area and connected to the machine through the pipe. The Gelatin Powder, Glycerin, water and preservatives namely, Methyl Hydroxy .....

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They are dried for 48 to 72 hours and are inspected and packed in blister packing. After quality checking, the products are released or dispatch . 8. The Adjudicating Authority observed that the EPO, which is active ingredient in the Primosa/Simrose capsules, have prophylactic or therapeutic uses. In the show cause notice, it has been mentioned that the writing on the packing material of the product Primosa & Simrose reads as Evening Primrose Oil is a rich and natural source of gamma linolen .....

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mically modified Sub-heading no. 15159091 refers to other edible grade oils. On the other hand, chapter 30 covers Pharmaceutical Products Heading No. 30.04 of CETA includes Medicaments (excluding goods of heading 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale. The Adjudicating Authority observed that the products P .....

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greaves (heading 2301) or residues of heading 2304 to 2306; e) fatty acids, prepared waxes, medicaments, paints varnishes, soap, perfumery, cosmetic or toilet preparations, sulphonated oils or other goods of Scection VI; or f) factice derived from oils (heading 4002). It is contended by the Learned Authorised Representative that Evening Primrose Oil (EPO) contained fatty acids, and therefore, it would not come under Chapter 15. 11. It is evident from record that EPO is a fixed oil obtained from .....

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PO is edible grade oils and sold as EPO in capsules with the name of Primosa and Simrose. We find that the similar issue was raised before the Tribunal in the case of M/s. Supreme Enterprises (supra). In that case, the dispute relates to classification is soft Vegetarian Gel Capsules. The assessee claimed under Sub-heading No. 15159091 of CTA as Extra Virgin Vegetable Oil (Inca Inchi) and according to Revenue under heading No. 3004 of CTA as P & P Medicines. This product is of Amazon origin .....

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lassified EPO under Sub-heading No. 1515 of CTA and the dispute was raised by Central Excise Authorities. 12. The relevant portion in the case of M/s Supreme Enterprises (supra) is reproduced below:- 4.1 It is the Revenue s case that the product merit? classification under CTH 3004 as P or P medicaments. Therefore, the onus of proving classification under the said heading lies on the Revenue. The Revenue has not even got the product tested by the Drugs Control authorities to come to the conclusi .....

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ally occurring which have therapeutic or prophylactic properties. For example products like neem, turmeric, basil leaves, etc., all have medicinal value but nobody considers them medicaments, when they are used as such, without subjecting to any chemical modification. In fact many of these items are used in daily cooking also. Therefore, merely because a product possess certain natural properties, it cannot be said to fall under the classification of medicaments. 4.2 We find that in the Banner P .....

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arely to the facts of the present case. As regards the Capsulation Services Ltd. case relied upon the Revenue, the issue involved related to a classification of a preparation containing vitamins and pro-vitamins. They were manufactured goods and not naturally occurring substances. Hence the said decision is distinguishable on facts and hence has no application. Accordingly, we agree with the contention of the appellant that the product merits classification under CTH 1515 90. Accordingly, the ap .....

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e Harmonized Tariff Schedule of the United States. It is observed that Note 1 (e) of Chapter 15 would cover fatty acid classified in Chapter 38. So, the Learned Authorised Representative has misinterpreted chapter Note, which is not applicable in this case. In the said letter, it is observed as under:- One of the protestant s arguments that the products are not classified in chapter 15, HTSUS, is based on GRI 1, which requires that classification be based on any relevant section and chapter note .....

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