2015 (5) TMI 701 - SC - Central Excise

Classification - Caldhan suspension, Livfit Vet and Ayucal premix - Animal feed supplements or Veterinary medicament - Classification under sub heading no.2302.00 or sub heading no.3003.39 - Held that - There are several reasons given by the Tribunal in classifying these products as animal feed supplements. One important reason in support which is noted by the Tribunal is that the Department s own laboratory, namely, CRCL has opined that livfit Vet is not described in authoritative books for Aurvedic medicines and it can be considered animal feed supplement. Insofar as Ayucal premix is concerned, here again, CRCL has opined that it should be animal feed supplement. Thus, insofar as these two products are concerned, Government s own laboratory has classified them as animal feed supplement and not veterinary medicament. Insofar as Caldhan suspension is concerned, the CRCL could not give any opinion either way. Because of this reason the Tribunal went into the certificates which were produced by the assessee from other experts. These certificates demonstrate that none of these products are medicament. No doubt, Indian Veterinary Research Institute (IVRI) has opined otherwise. However, as against that there is an opinion of Dr. Mahesh Kumar, Associate Professor of G.B.Pant University of Agriculture and Technology, stating that Caldhan can be recognized as a tonic or food supplement only which provides low levels of calcium or phosphate to the animals and thereby helps in maintaining tenacity of muscles. It is also stated by him that Caldhan cannot be used for therapy of milk fever as it provides not only 325 mg calcium per 20 ml whereas for the therapeutic management of milk fever, a minimum of 100-150 g calcium should be given intravenously as 20-30% solution. Pertinently even on the printed labels for this product, it mentioned not for medicinal use . Otherwise also we find that insofar as this product, namely, Caldhan suspension is concerned, the Revenue effect is only ₹ 16,000/- for the period in question and statement was made at the Bar by Mr. Lakshmikumar, Advocate, that the assessee has stopped the production of this product. - Decided against the revenue.

Summary

Issues:
Classification of products as animal feed supplements or veterinary medicaments under Central Excise Act.

Analysis:
The case involved the classification of certain products as either animal feed supplements or veterinary medicaments under the Central Excise Act. The respondent, engaged in manufacturing Ayurvedic PP Medicines, had cleared goods in different packaging labeled as Animal Feed Supplements. The Department issued show cause notices demanding duty under Section 11A of the Central Excise Act for the period March 1994 to November 1998. The Commissioner confirmed duty on certain products but not on others, imposing penalties as well. The respondent appealed to CESTAT, which allowed the appeal based on the packaging materials stating "not for medicinal use."

The main contention was whether the products, including Livfit Premix, Ayucal Premix, and Caldhan Suspension, were animal feed supplements falling under Chapter Heading 23.02.00 or veterinary medicaments falling under Heading 30.03. The Tribunal classified the products as animal feed supplements based on various factors. The Department argued that the products were veterinary medicaments. The Tribunal considered the opinion of the Department's laboratory, CRCL, which classified Livfit Vet and Ayucal Premix as animal feed supplements. Regarding Caldhan Suspension, CRCL did not provide a clear opinion, leading the Tribunal to rely on certificates from other experts. These certificates indicated that Caldhan was a tonic or food supplement, not a medicament. Despite conflicting opinions, the Tribunal found no reason to interfere with its classification.

In conclusion, the Supreme Court dismissed the appeal, upholding the Tribunal's decision to classify the products as animal feed supplements rather than veterinary medicaments. The judgment emphasized the importance of expert opinions and the labeling of products as "not for medicinal use." The case highlighted the significance of accurate classification under the Central Excise Act and the role of expert analysis in determining the nature of products for tax purposes.