2008 (1) TMI 170 - AT - Central Excise

Product kidicare, a combination of fixed dosage of vitamins with basic minerals impugned product are marketed under brand names with dosages indicated, and have also been produced under drugs licences obtained from concerned Drug Control authorities in view of decision of tribunal in case of Manish Pharma we hold that the product Kidicare will be classified as medicaments under Chapter 30, not under chapter 21as other edible preparations appeal of assessee allowed

Summary

Issues: Classification of product "Kidicare" under chapter heading, differential duty, penalty, confiscation of stocks

In this case, the issue revolved around the classification of the product "Kidicare" under a specific chapter heading for duty purposes. The Order-in-Original classified "Kidicare" under chapter heading no. 21.07, not as a medicament, resulting in the imposition of differential duty, penalties on the appellant, and confiscation of the product stocks. The appellant argued that "Kidicare" was a combination of vitamins and minerals, similar to another product 'MIM' classified differently. The appellant cited previous Tribunal decisions, including the case of Manish Pharmaceuticals, to support their classification under Chapter 30 as a medicament.

The learned consultant representing the appellant highlighted that the product's composition and purpose aligned with medicaments, emphasizing the fixed dosage of vitamins and minerals. On the other hand, the JDR contended that the product was not a proprietary or patent medicine, as indicated by the labels and cartons, and should be classified under chapter 21 as "other edible preparations" due to its intended use for increasing appetite, health, and vitality. The JDR supported the adjudicating authority's classification under chapter 21, arguing that "Kidicare" lacked a prophylactic effect.

Upon reviewing the evidence, the Tribunal found that "Kidicare" indeed contained essential vitamins and minerals, and its classification under Chapter 30 as a medicament was appropriate. Citing the precedent set by the Tribunal in the case of Manish Pharma, the Tribunal ruled in favor of the appellant, overturning the previous classification and allowing the appeals with consequential relief. The Tribunal's decision was further supported by the Supreme Court's validation of the earlier Tribunal ruling, reinforcing the classification of "Kidicare" as a medicament under Chapter 30. The impugned order was deemed unsustainable and set aside, providing relief to the appellant in terms of duty, penalties, and stock confiscation.