2003 (10) TMI 456 - AT - Central Excise

Summary

Issues involved:
Classification of product Aneudox-12 under Central Excise Tariff Act, invocation of extended period of limitation for demanding Central Excise duty.

Classification Issue:
The appeal questioned the classification of Aneudox-12 as a patent or proprietary medicament under Heading 3003.10 of the Central Excise Tariff Act, contrary to the Commissioner (Appeals) classification under Heading 29.36. The appellant argued that their product had therapeutic uses and was correctly classified initially. They highlighted that the impugned product was declared and assessed without objection, and the demand for duty was time-barred. The respondent contended that the product was prohibited for human use due to lack of therapeutic value, supported by the Ministry of Health and Family Welfare's Notification and court decisions. The Tribunal noted that for a product to be classified as a medicament under Chapter 30 of the Tariff, it must have therapeutic or prophylactic uses. As the impugned product lacked therapeutic value, it was correctly classified under Heading 29.36, and the extended period of limitation was valid due to the non-disclosure of crucial information by the appellant.

Penalty Issue:
The Commissioner (Appeals) had reduced the penalty imposed on the appellant, considering the circumstances. The appellant argued against the penalty, stating there was no intent to evade duty. The respondent justified the penalty citing non-disclosure of critical information by the appellant, making the extended period of limitation applicable. The Tribunal upheld the reduced penalty of Rs. 50,000, deeming it reasonable given the circumstances. The non-disclosure of the lack of therapeutic value of the product led to the invocation of the extended period of limitation, justifying the penalty imposition.

Conclusion:
The Tribunal rejected the appeal, affirming the classification of the product under Heading 29.36 due to its lack of therapeutic value. The non-disclosure of crucial information by the appellant justified the invocation of the extended period of limitation for demanding Central Excise duty. The reduced penalty of Rs. 50,000 imposed by the Commissioner (Appeals) was deemed appropriate, leading to the dismissal of the appeal.