2006 (2) TMI 558 - AT - Central Excise

Summary

Issues:
Reclassification of products from food supplements to Ayurvedic herbal medicaments under Central Excise Tariff Act, 1985.

Detailed Analysis:

1. Reclassification Dispute:
The appeal involved a dispute over the reclassification of products manufactured by the appellants from normal food supplements under Chapter sub-heading 2302.00 to Ayurvedic herbal medicaments under Chapter sub-heading 3003.39 of the Central Excise Tariff Act, 1985. The Commissioner, in the impugned order, rejected the assessee's contention based on technical literature and recommended reclassification, leading to revised demands.

2. Grounds of Challenge:
The appellants challenged the reclassification order on various grounds, including misconceptions by the adjudicating authority, misreading of the statutory definition of 'medicaments,' ignoring expert opinions, and failure to consider the products' common trade use for animal feeding. The appellants also highlighted the relevance of product labels, dosage prescriptions, and the lack of registration as drugs in their defense.

3. Legal References:
The appellants cited various legal references, including Larger Bench judgments, Board Circulars, and previous Orders-in-Original to support their argument against reclassification. They emphasized the importance of HSN Explanatory Notes, expert opinions, and principles laid down in prior cases such as CCE v. Vicco Laboratories and CCE v. Tetragon Chemie.

4. Judicial Consideration:
Upon hearing both sides, the Tribunal acknowledged the department's initial classification of the products as animal food supplements under Chapter Heading 2302.00. The Tribunal noted the appellants' evidence and reliance on board circulars and legal precedents to establish that the items were not medicaments but animal food supplements. The Tribunal decided to remand the case for de novo consideration, emphasizing the need to re-examine the evidence, citations, and earlier classification in determining the correct classification of the products.

5. Remand Order:
The Tribunal set aside the matter and directed a fresh consideration based on the evidence presented by the appellants, relevant literature, and citations referred to in the case. The Tribunal stressed the importance of evaluating whether the products qualified as medicaments or animal food supplements, considering the evidence and previous classification by the department. The issue of time bar was also highlighted for re-examination during the fresh consideration.

In conclusion, the Tribunal's judgment focused on the need for a thorough reevaluation of the evidence and legal references presented by the appellants to determine the correct classification of the products in question, emphasizing the distinction between Ayurvedic herbal medicaments and animal food supplements under the Central Excise Tariff Act, 1985.