2004 (7) TMI 451 - AT - Central Excise

Summary

Issues:
Classification of product "pentatone liquid" under Central Excise Tariff Act, 1985 - Chapter Heading 3003.10 vs. Chapter Heading 2107.91.

Detailed Analysis:

1. Classification Issue:
The primary issue in this case revolves around the classification of the product "pentatone liquid." The appellants argue that it should be classified under Chapter Heading 3003.10 as patent and proprietary medicines attracting a 15% ad valorem duty. Conversely, the department proposes classification under Chapter Heading 2107.91, attracting a 20% ad valorem duty. The product is described as a mixture of vitamins, salts, iron, and calcium, packaged as a health tonic. The label suggests a prophylactic use but lacks any indication that it is a medicament approved by the Drug Controller. The department classified the goods under Chapter 21, considering them as miscellaneous edible preparations not elsewhere specified.

2. Adjudication and Ruling:
After hearing both sides, the tribunal observed that the product's label clearly indicates it as a health tonic, aligning with the HSN clarificatory Note 16 under Chapter Heading 21.06 for "Food preparations not elsewhere specified." The tribunal emphasized that the absence of a license from the Food & Drugs Administration to manufacture medicines is notable. Despite the appellants' claims regarding the product's health benefits and prophylactic qualities, the tribunal found it more aligned with promoting good health rather than specifically curing ailments. Consequently, the tribunal upheld the Commissioner (Appeals) order, rejecting the appeal and affirming the classification under Chapter 21 for the product.

3. Conclusion:
In conclusion, the tribunal determined that the product "pentatone liquid" should be classified under Chapter 21 of the Central Excise Tariff Act, 1985, as a miscellaneous edible preparation, based on the label's description as a health tonic and the absence of specific medicament indications or necessary licenses. The tribunal's decision highlights the importance of proper classification based on product characteristics and labeling information, ultimately leading to the rejection of the appeal and upholding the original classification decision made by the Commissioner (Appeals).