2007 (7) TMI 299 - SC - Central Excise

Demand and Recovery Classification and Period of Limitation - Fixed Dose Combination (FDC) of vitamin B1 B6 and Vitamin B12. According to the assessee the said product was medicament and therefore it fell under Chapter Heading 3003.10 whereas according to the Department the said product fell under Heading No. 2936.00 Apex Court has kept the issue of classification open The claim of the assessee-respondent herein that the above Combination was a medicament was in consonance with the directions given by the Drug Controller. In the circumstances Section11-A cannot be invoked. In the above circumstances it cannot be said that there was a wilful mis-declaration on the part of the respondent-assessee.

Summary

Issues: Classification of product and invocation of extended period of limitation

Classification Issue:
The appeals raised two issues: classification and extended period of limitation regarding a Fixed Dose Combination (FDC) of vitamin B1 B6 and Vitamin B12. The assessee argued the product fell under Chapter Heading 3003.10 as a medicament, while the Department contended it fell under Heading No. 2936.00 for pro-vitamins and vitamins. The Department asserted that specific entries take precedence over general entries, placing the product under Heading 2936.00. However, the Supreme Court did not delve into the classification issue due to a Ministry of Health and Family Welfare notification banning the product for human use. The Court kept the classification question open for future determination.

Extended Period of Limitation Issue:
Regarding the invocation of the extended period of limitation, the Department alleged wilful mis-declaration by the assessee in a show cause notice dated 2-5-2001 under Section 11A of the Central Excise Act, seeking duty for the period from 1-4-1996 to 28-2-1999. The Court noted that historically, manufacturers, including the assessee, considered the FDC to have therapeutic value, supported by a directive from the Drug Controller General. As the assessee's classification aligned with the Drug Controller's guidance, the Court concluded that Section 11-A could not be applied, ruling out wilful mis-declaration. Consequently, the Court dismissed the appeals, finding no merit and awarded no costs.