2007 (4) TMI 33 - AT - Central Excise

Classification Appellants claim that the good produce by him as veterinary Medicaments falling under Chapter No. 3003.10 but department classify under Chapter No. 3307.90 Held that the appellant product fall under Chapter No. 3003.10

Summary

Issues: Classification of products as cleaning agents or veterinary medicaments

Detailed Analysis:

Issue 1: Classification of products
The appeal before the Appellate Tribunal CESTAT, Bangalore arose from a dispute regarding the classification of four items manufactured by the appellant for use on pet animals. The question at hand was whether these items should be categorized as cleaning agents or as having curative value prepared for therapeutic or prophylactic uses. The items in question were Notix Forte, Notix Talc, Notix Scrub Liquid, and Seledruff.

Issue 2: Appellant's contention
The appellants claimed that the products should be classified as 'Veterinary Medicaments' falling under Chapter No. 3003.10. They argued that the items were not merely animal toilet preparations for cleaning animals like soap and shampoo. Instead, they asserted that the products were veterinary medicaments used for preventing fleas, ticks, lice, parasites, bacterial, and fungal infections. The items were manufactured under a Drug Licence issued by the Drug Controller.

Issue 3: Department's stance
On the other hand, the department treated the items as 'animal toilet preparations' falling under Chapter No. 3307.90. The Commissioner (A) rejected the appellant's plea and demanded duty, holding that the items were indeed animal toilet preparations. The Commissioner disregarded the expert opinion of a veterinarian and the Drug Licence, categorizing the products as animal toilet preparations without substantial evidence.

Issue 4: Legal arguments
The learned Counsel for the appellant argued that once a Drug Licence is issued by the Drug Controller, the item must be considered as manufactured under the Drugs Act. They relied on various rulings of the Apex Court and Tribunal to support their case. The evidence presented by the appellants, including the Drug Licence, technical evidence, expert opinion, and trade literature, was not adequately considered by the department.

Issue 5: Tribunal's decision
After careful consideration and perusal of the records, the Tribunal found in favor of the appellants. They noted that the items were manufactured under a Drug Licence and contained ingredients suitable for veterinary medicaments. The trade literature supported the appellant's claim that the products were used for specific therapeutic purposes, such as killing parasites and treating skin ailments. Citing previous judgments, the Tribunal concluded that the items should be classified as 'Veterinarian Medicaments' under Chapter Heading 3003.10, rejecting the department's classification as 'animal toilet preparations'. The appeal was allowed with consequential relief.

This detailed analysis highlights the key arguments, evidence, and legal principles involved in the judgment regarding the classification of products as cleaning agents or veterinary medicaments.