2017 (5) TMI 136 - AT - Central Excise

Classification of goods - FRANCH OIL NH - whether FRANCH OIL NH is covered by the Tariff entry 30.03 or shall be classifiable under Tariff heading 15.02? - Held that - the goods is basically a drug providing relief and remedy for wound healing used as antifungal-antibacterial, analgesic and has also anti-inflammatory properties. The goods has trade name ie. FRANCH OIL NH having the character of proprietary medicine - Having noticed the character of the goods which is drug in nature and also for the features aforesaid, including the trade name it bears that squarely falls under the Chapter 30.03 as classified by Revenue - appeal dismissed - decided against Revenue.

Summary

Issues: Classification of goods under Tariff entry 30.03 or 15.02

Analysis:
1. The appellant contended whether repacking "FRANCH OIL NH" amounts to manufacture and if the goods fall under Tariff entry 30.03 or should be classified under Tariff heading 15.02. The adjudicating authority described the process of manufacturing "FRANCH OIL NH" under a Drug License, indicating it was marketed as a medicament for dermal care and healing. The appellant argued that despite being manufactured under a Drug license, the goods were essentially vegetable oil and should be classified under Tariff heading 15.02, not as a drug.

2. The Revenue argued that since the goods were recognized under the Drugs and Cosmetics Act, manufactured under IP Cold Press, and marketed as "FRANCH OIL NH," they should be classified under Tariff heading 30.03. The appellant rebutted this, stating that the goods did not qualify as a medicament or proprietary medicine solely based on the manufacturing process supervised under the Drug license regulations. The appellant maintained that the goods were essentially castor oil and should be classified under Tariff heading 15.02.

3. The Tribunal examined the nature of the goods, particularly the trade name "FRANCH OIL NH," and a report from the University of Madras confirming the medicinal properties of the goods, including wound healing, antifungal, antibacterial, analgesic, and anti-inflammatory properties. Literature and labels presented indicated the goods were used for disease treatment and were considered complementary medicines. The Tribunal concluded that due to the medicinal nature and proprietary medicine characteristics of the goods, they fell under Chapter 30.03 as classified by Revenue. Consequently, all appeals were dismissed based on the classification of the goods as medicinal products under Tariff entry 30.03.