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M/s. K-Link Healthcare (India) Pvt. Ltd. Versus Commissioner of Customs (AIR) , Chennai And Commissioner of Customs (AIR) , Chennai Versus M/s. K-Link Healthcare (India) Pvt. Ltd, Shri Payyakkal Devadas, Director, M/s. Thirumalai & Company, M/s. Sri Valli Shipping & Transport, M/s. KMK Shipping and Clearing Pvt. Ltd.

2017 (9) TMI 943 - CESTAT CHENNAI

Classification of imported goods - nine products - interpretation of facts regarding nature and usage of the products - The original authority classified these products either under Chapter 21 or under Chapter 33 depending upon the nature and usage of these products. Chapter 21 deals with miscellaneous edible preparations. Chapter 33 deals with essential oils and resinoids; perfumery, cosmetics or toilet preparations - The appellant-assessee claimed classification under Chapter 22, 29 and 30 of .....

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he best, some of these products have effect of removing toxins, overall enhancing the well-being of the person consuming or using them. The appellant-assessee themselves clearly printed in the literature as well as on the product package that these are not drugs and not intended to diagnose, treat, cure or prevent any disease. The product as packed and marketed should be considered for classification. When the appellant-assessee themselves claimed that these are not for curing or treating any di .....

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hich can be considered as curative in nature. Most of the products are aimed at enhanced well-being or hygiene and improved body conditions. These type of generic group items are rightly to be considered under Chapter 21 or 33 depending on the nature and usage. - Extended period of limitation - Held that: - there is no evidence to support the claim of the Revenue that the appellant-assessee deliberately mis-declared the description of the imported goods in order to evade payment of duty. It .....

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l dismissed - decided against appellant. - Appeal No. C/264/2009, Appeal Nos. C/270 274/2009 & C/CO/ 83- 84/2009 - Final Order Nos. 42074-42079 /2017 - Dated:- 15-9-2017 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri B. Ravichandran, Member (Technical) Ms. J. Ragini, Advocate for the Assessee Shri B. Balamurugan, AC (AR) for the Revenue ORDER Per: B. Ravichandran All six appeals are against the common impugned order dated 12.05.2009 of the Commissioner of Customs, Airport, Air Cargo Comple .....

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initiated by issue of SCN dated 23.05.2007. Classification of 15 products imported by the appellant-assessee and consequent valuation was the subject matter of dispute. The case was adjudicated by the original authority who held that the classifications declared by the appellant-assessee at the time of import of these goods were not correct. He examined each one of the imported items and concluded on their classification. These imports were covered by 33 Bills of Entry. The assessment in respec .....

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s, the appellant-assessee contested the findings of the original authority and preferred this appeal. 4. The original authority dropped the demand for differential duty in respect of the goods covered by three Bills of Entry the assessment for which were not provisional, holding that such demand was hit by limitation. Consequently, he dropped penal proceedings against the main appellant-assessee and other individuals/CHA against whom proposal for penalty was made in the SCN. Aggrieved by this, R .....

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er intended to be medicaments to diagnose, treat, cure or prevent any disease. The original authority has examined the product literature in detail and there is nothing in the present appeal to bring out different facts missed by the original authority. He supported the findings of the original authority on classification of the impugned goods. 6. On the appeals by the Revenue, he submitted that the appellant-assessee deliberately mis-classified the products though same party filed Bill of Entry .....

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ispute is on classification of imported items based on the interpretation of facts regarding nature and usage of the products. We have extensively perused the product manual which elaborates the nature of some of the disputed items along with their use etc. We have also perused the sample packages of the disputed items as submitted by the appellant-assessee during the course of hearing. There are nine products imported by the appellant-assessee, the classifications of which are now in dispute. T .....

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oducts (chapter 30). We considered the dispute in respect of each item for a finding. 8.1 ROOIBOS SOD Drink The original authority examined the products catalogue and recorded as below:- As per the product literature in the products Catalogue, Rooibos SOD Drink is a unique health benefit tea from South Africa, grown only in the magnificent unpolluted area in the Cedarberg region of the Cape of Good Hope. Rooibos SOD Drink is a caffeine free drink. It has a soothing effect on the central nervous .....

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hich is required for the development of strong teeth and bones. Rooibos SOD Drink is a truly unique beverage with a full range of health benefit. A refreshing drink for all occasions and can be enjoyed both hot and cold, whether it is the first thing in the morning, at normal drink time or as a relaxing drink just before bedtime. This functional health drink is suitable for all. The Importer has submitted that as per the literature for this product this is a unique health drink and is made from .....

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uch as one or more plant extracts, which are not consumed as such but which are of a kind used for making herbal infusions or herbal teas , including products which are claimed to offer relief from ailments or contribute to general health and well-being The Importer has contested that only products which consists of mixture of plants or parts of plants of different species or product consisting of plants or parts of single or of different species but mixed with other substances fall under Headin .....

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. CTH0902 pertains to Tea, whether or not flavored. CTH/CETH 090200 does not cover nutritional drinks made from herbal infusions or herbal teas including products which are claimed to offer relief from ailments or contribute to general health and well-being . Therefore, Rooibos SOD Drink cannot be classified as Tea under CTH/CETH090200. The other CTH/CETH preferred by the Importer is 2202, which pertains to Waters, including mineral waters and aerated waters, containing added sugar or other swee .....

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form of transdermal administration systems) or in forms of packing for retail sale. At the bottom of the above product literature there is disclaimer which reads as: This product is not intended to diagnose, treat, cure or prevent any diseases. As discussed at the outset, this disclaimer means that the products is not a medicament and does not have any therapeutic value. As can be seen from the product literature, Rooibos SOD Drink is marketed only as a nutritional health drink and therefore it .....

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lcoholic beverages not including fruit or vegetable juices of heading 2009. We find the original authority classified the product under CTH 2106 90/2106 9090/2108 99. CH 2106 deals with food preparations not elsewhere specified or included. Below the main heading, the classification was made under last miscellaneous heading other . We note that the said product is being marketed as an health drink and the classification ordered by the original authority is correct. In this connection reference c .....

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g., those having laxative, purgative, diuretic or carminative properties), including products which are claimed to offer relief from ailments or contribute to general health and well- being. The heading excludes products where an infusion constitutes a therapeutic or prophylactic dose of an active ingredient specific to a particular ailment (heading 30.03 or 30.04). The heading also excludes such products classifiable in heading 08.13 or Chapter 9. 16. Preparations, often referred to as food sup .....

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of plants of heading 20.08, provided that the essential character of the preparations is given by such fruit, nuts or other edible parts of plants (heading 20.08). Micro-organisms of heading 21.02 put up as food supplements for human consumption (heading 21.02). The above clarificatory notes when applied to products in dispute make is clear that these cannot be considered as pharmaceutical products under Chapter 30 as now claimed by appellants. 8.3 BAE/K-Liquid Chlorophyll: The appellant claime .....

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terature. We note that the details of the product literature have been reproduced by the original authority and applying the Note (14) of the explanatory notes for CTH 2106, the original authority classified the product under 2106. The product cannot be considered as a organic chemical. Chapter 29 generally applies to chemically define organic compound with or without impurities. The present product, as explained above, cannot be called an organic chemicals. 8.4 UIE Power Liquid: As per the prod .....

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ally claimed by the appellant at the time of import. The essential character of this product is the health drink based on product details highlighted for marketing. Accordingly, we are in agreement with the original authority in classifying the product under Chapter 21. 8.5 RIDDANCE The appellant claimed this product is a medicament for classification under Chapter 30. We have perused the product literature as well as the sample of the impugned goods. It is clear that the said product is markete .....

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ance: The appellant-assessee claimed the classification as medicine under Chapter 30. No product literature was submitted. However, based on the details of ingredients as furnished by the appellant-assessee, it is apparent that it is a food supplement made from plant extracts, consumed for general health and well-being. As in the case of Rooibos it is also made from a single ingredient in the form of capsules. The said product comes with a disclaimer that this is not medicine and not intended to .....

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ellant-assessee. The original authority had examined the product literature, the contents and the usage of the said products and concluded that these are to be correctly classified under Chapter 33 which covers essential oils and resinoides; perfumery, cosmetics or toilet preparations. We have perused the product literature and samples of the impugned goods. None of these products merit classification as medicines or medicaments. These are not having any therapeutic or prophylactic value. K-Link .....

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onsidered for classification. When the appellant-assessee themselves claimed that these are not for curing or treating any disease, the question of considering them as medicaments does not arise. 9. The Ld. Counsel for the appellant-assessee submitted that while deciding classification, the normal use for which the product is put to use by the customer should be considered. She referred to the decisions of the Hon ble Supreme Court in the case of CCE, Calcutta Vs. Sharma Chemical Works 2003 (154 .....

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the Ayurvedic text or in recognized Pharmacopoeia. In fact, the Hon ble Supreme Court examined the scope of Chapter 30 and the meaning of the term medicament . As noted earlier in this order and discussed elaborately in the impugned order, none of the products which are examined in the present dispute have any qualities which can be considered as curative in nature. Most of the products are aimed at enhanced well-being or hygiene and improved body conditions. These type of generic group items a .....

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