2015 (2) TMI 954 - AT - Customs

Classification of goods - import of Inca Inchi Oil in soft vegetarian Gel Capsules - Classification under CETH 15159091 or under CTH 3004 - claim of the appellant that these are Extra Virgin Vegetable Oil (Inca Inchi) meriting classification under CETH 15159091 - Held that - Product merit classification under CTH 3004 as P or P medicaments. Therefore, the onus of proving classification under the said heading lies on the Revenue. The Revenue has not even got the product tested by the Drugs Control authorities to come to the conclusion that the product has therapeutic or prophylactic properties or have been prepared or made so as to have these properties. On the contrary, we find that the product description on the packaging itself, clearly indicates that the product does not have any medicinal use and is not intended to diagnose, treat, cure or prevent any disease. The product has natural ingredients such as, vitamins A & D and omega 3, 6 & 9 which has antioxidant properties. There are many products which are naturally occurring which have therapeutic or prophylactic properties. For example products like neem, turmeric, basil leaves, etc, all have medicinal value but nobody considers them medicaments, when they are used as such, without subjecting to any chemical modification. In fact many of these items are used in daily cooking also. Therefore, merely because a product possess certain natural properties, it cannot be said to fall under the classification of medicaments. - the product merits classification under CTH 151590 - Following decision of Banner Pharmacaps (I) Pvt. Ltd. vs. CCE, Bangalore 2004 (12) TMI 203 - CESTAT, BANGALORE - Decided in favour of assessee.

Summary

Issues:
Classification of Inca Inchi Oil in soft vegetarian Gel Capsules under CTH 3004 as P or P medicines versus classification under CETH 15159091 as "Extra Virgin Vegetable Oil."

Analysis:
The judgment involves an appeal against the Order-in-Appeal passed by the Commissioner of Customs (Appeals) upholding the classification of Inca Inchi Oil in soft vegetarian Gel Capsules under CTH 3004 as P or P medicines. The appellant claimed that the product should be classified under CETH 15159091 as "Extra Virgin Vegetable Oil." The appellant argued that the product, extracted from the Inca Inchi tree, contains natural vitamins and antioxidants, is not chemically modified, and is not intended for medicinal use. The product, encapsulated in 500 Mg capsules, is 100% vegetarian and has been certified by the Food Safety and Standards Authority of India. The appellant contended that the product should not be classified as a medicament under CTH 3004 based on the product description and natural properties. The appellant relied on a previous Tribunal decision to support their argument.

The Revenue, represented by the Additional Commissioner, maintained that the product should be classified under CTH 3003 as medicine based on the product literature claiming properties such as preventing blood clotting and regulating blood sugar. The Revenue cited a Supreme Court decision to support their position that products with therapeutic and prophylactic value fall under the category of medicaments.

The Tribunal carefully considered both sides' submissions and found that the product description and natural properties of the Inca Inchi Oil did not support its classification as a medicament under CTH 3004. The Tribunal noted that the product was not tested by Drugs Control authorities and that the packaging clearly stated it was not for medicinal use. Drawing parallels to a previous case involving encapsulated oils, the Tribunal concluded that the product should be classified under CETH 15159091 as "Extra Virgin Vegetable Oil." The Tribunal distinguished the Revenue's cited case, stating it involved manufactured goods, unlike the naturally occurring substance in question. Consequently, the appeal was allowed, and the impugned order was set aside, with the stay petition also disposed of.