2010 (12) TMI 76 - AT - Central Excise

Classification - Mittavin capsule, Vitamin A chewable tablets, Rovigon tablets, Ascorbic acid chewable tablets, Becozym C Forte tablets, Vitaminets Forte tablets, Supradyn tablets, Benadon tablets etc - Patent or Proprietary medicaments under SH 3003.10 - classifiable under SH 2936.00 of the said Schedule as pro-vitamins and vitamins and intermixtures of the same - Held that - the lower appellate authority followed certain decisions of this Tribunal which were either overruled or reversed. As rightly pointed out by the learned counsel, the decision in Ranbaxy Labs case, which was followed by the Commissioner, was reversed by the apex court in a civil appeal filed by the assessee - appeal allowed by way of remand

Summary

Issues:
Classification dispute regarding the appropriate classification of various products under the Central Excise Tariff Act.

Analysis:
The dispute in this case revolves around the classification of products manufactured and cleared by the appellant between September 1996 and February 1999. The appellant argues that the goods should be classified as Patent or Proprietary medicaments under SH 3003.10, while the Revenue contends that they should be classified under SH 2936.00 as pro-vitamins and vitamins. The products in question include Mittavin capsule, Vitamin A chewable tablets, Rovigon tablets, Ascorbic acid chewable tablets, and others. The Commissioner of Central Excise classified all products under Heading 29.36, resulting in a demand for duty of over Rs 2 crores from the appellant under Section 11A of the Central Excise Act with interest under Section 11AB.

The appellant argues that the products have therapeutic or prophylactic properties, making them classifiable as P or P medicaments under SH 3003.10. The appellant relies on HSN Explanatory Notes under Heading 29.36, stating that certain organic compounds for therapeutic or prophylactic use should be excluded from Chapter 29 and classified under Heading 30.04, aligned with Heading 30.03 of the Tariff. Reference is made to case law, particularly the Tribunals Larger Bench decision in a similar case, which held that combinations of vitamins with prophylactic use should be classified under Heading 30.03. The appellant argues that the Commissioner erred in following previous Tribunal decisions that were overruled or reversed by higher authorities.

The learned SDR supports the Commissioner's findings, arguing that the appellant must prove the prophylactic or therapeutic uses of the goods to establish their classification under Heading 30.03.

The Tribunal, after hearing both sides, decides to allow the appeal by way of remand. It is noted that the lower appellate authority relied on Tribunal decisions that were overruled or reversed. The Commissioner is instructed to address the classification issue afresh, considering the facts, evidence, and relevant case law, while providing the appellant with a reasonable opportunity to be heard. The impugned order is set aside, and the appeal is allowed by way of remand for a fresh decision by the Commissioner in accordance with the law and principles of natural justice.