1987 (9) TMI 174 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Dextrose I.P. under the Central Excise Tariff.
2. Applicability of a shorter or longer period for the demand of duty.

Issue-wise Detailed Analysis:

1. Classification of Dextrose I.P. under the Central Excise Tariff:

The primary issue in this appeal is whether the appellants manufacture Dextrose I.P. merits classification as a patent and proprietary medicine under Tariff Item 14E of the Central Excise Tariff, as claimed by the Revenue, or under T.I. 68 as claimed by the appellants. The proceedings originated from a visit by Central Excise officers to the appellants' factory, where it was observed that the labels used for Dextrose I.P. suggested it should be classified under T.I. 14E. The appellants contended that Dextrose I.P. is a pharmacopoeial medicine listed in the Pharmacopoeia of India, and thus should not fall under T.I. 14E. They argued that the monogram on the label was not registered under any act, and thus, they had no proprietary right over it. The Collector of Central Excise, however, held that the monogram on the label established a connection between the manufacturer and the medicine, classifying it as a patent and proprietary medicine under T.I. 14E. This decision was challenged in the Tribunal.

During the hearing, the appellants argued that the letters on the label did not constitute a monogram and that they had no proprietary right over the mark. They cited various decisions to support their argument, including M/s. Indo French Pharmaceutical Co. v. Union of India and Standard Pharmaceuticals Ltd. The Revenue countered that the label indicated a connection between the appellants and the medicine, citing the Allahabad High Court decision in Ramsey Pharma Pvt. Ltd. and a Tribunal decision in Lubri-chem Industries Pvt. Ltd.

The Tribunal, upon reviewing the evidence and arguments, found that the letters A P on the label, though not interwoven, were placed side by side in an artistic fashion, indicating a connection between the manufacturer and the medicine. The Tribunal preferred the Allahabad High Court decision in Ramsey Pharma Pvt. Ltd., which dealt with a similar issue, over the Madras High Court decision cited by the appellants. The Tribunal concluded that the medicine in question was a patent or proprietary medicine under T.I. 14E, attracting Central Excise duty.

2. Applicability of a Shorter or Longer Period for the Demand of Duty:

The allied question was whether the demand for duty against the appellants should be for the longer period of five years or the shorter period of six months preceding the date of the show cause notice. The appellants argued for the shorter period, claiming that the Revenue was aware of their manufacturing activities. The Revenue contended that the appellants had not filed any declaration under Notification No. 111/78-C.E., which was necessary to claim exemption from licensing control.

The Tribunal held that merely because Central Excise officers were generally visiting the appellants' factory did not mean they had knowledge of the specific medicines and labels manufactured by the appellants. In the absence of any declaration filed by the appellants, the Tribunal found no basis to grant the benefit of a shorter limitation period. Consequently, the demand for duty for the longer period of five years was upheld.

Conclusion:

The appeal was dismissed, affirming the classification of Dextrose I.P. under T.I. 14E and upholding the demand for duty for the longer period of five years.