2004 (4) TMI 355 - AT - Central Excise

Summary

Issues:
Classification of product under Central Excise Tariff - Chapter sub-heading 1704.90 vs. Chapter sub-heading 2936.00.

Analysis:

Issue 1: Classification of the product under Central Excise Tariff
The appellant manufactured "Vicks Vitamin C Orange/Mango Drops" as job work for a company. The product was classified under Chapter sub-heading 1704.90 and Central Excise was discharged accordingly. However, the classification was challenged, and it was held that the product should be classified under Chapter sub-heading 2936.00, resulting in a higher duty rate. The dispute centered around whether the product should be considered sugar confectionery or provitamins/vitamins. The lower authorities emphasized that the commercial understanding and marketing of the product as vitamin tablets were crucial in determining its classification.

Issue 2: Competing Headings
The competing headings were analyzed, with Chapter sub-heading 1704.90 covering sugar confectionery and Chapter sub-heading 2936.00 encompassing provitamins and vitamins primarily used as such. The decision was between categorizing the product as sugar confectionery or as a vitamin supplement.

Issue 3: Product Composition and Usage
The appellant argued that the product was primarily sugar confectionery, with sugar constituting 97% of the composition and vitamin C only 0.0189%. They contended that the addition of vitamin C was for flavor and not as a significant vitamin supplement. Comparisons were drawn with other enriched food products to support the argument that such additions do not alter the fundamental character of the product.

Issue 4: Regulatory Compliance
The appellants highlighted that the product was manufactured under a Food license, not a Drug license, indicating its classification as a food item rather than a medicinal product. They pointed out that the addition of small doses of vitamins to confectionery was permitted under Food Rules, further supporting their stance on the product's classification.

Judgment
After reviewing the records and submissions, the Tribunal concluded that the product's true identity was sugar confectionery, not a vitamin supplement. The composition, marketing, and regulatory aspects supported this classification. The product's high sugar content, low vitamin C percentage, and impractical dosage for vitamin intake reinforced the classification as sugar confectionery. The Tribunal emphasized that the product's primary use should align with the relevant Tariff heading, and in this case, it did not primarily function as a vitamin supplement. Therefore, the appeal succeeded, and the appellants were granted relief based on the reclassification of the product as sugar confectionery.