2005 (2) TMI 579 - AT - Central Excise

Summary

Issues: Classification of Savlon antiseptic - Duty demand and penalty imposition

In the judgment delivered by the Appellate Tribunal CESTAT, Mumbai, the issue revolved around the classification of Savlon antiseptic, manufactured by the appellants, under the Central Excise Tariff Act, 1985. The Commissioner of Central Excise & Customs, Vapi, confirmed a duty demand of Rs. 1,27,36,109/- and imposed a penalty of Rs. 50,00,000/- on the appellants for classifying the product under Chapter Heading 38.08 as a disinfectant, rejecting the appellants' claim for classification as a medicament under Chapter Heading 30.03.

Upon hearing both sides, the Tribunal referred to a previous case, ICPA Health Products (P) Ltd. v. CCE, Vadodara, where the Supreme Court held that products with therapeutic properties and prophylactic use are classifiable under a specific sub-heading. The products in question contained chlorhexdine gluconate solution BP, which had therapeutic properties. In the present case, the Chemical Examiner found that the Savlon antiseptic contained ingredients with pharmaceutical activity. Consequently, the Tribunal applied the ratio of the Supreme Court's decision to the current case and set aside the impugned order, allowing the appeal. The judgment emphasized the importance of the therapeutic properties of the product in determining its classification under the relevant tariff headings.