2001 (5) TMI 91 - AT - Central Excise

Summary

Issues: Classification of medicaments under Central Excise Tariff; Denial of Modvat credit; Penalty imposition; Entitlement to rebate under Rule 12(1)(b).

Classification of medicaments under Central Excise Tariff:
The appellant filed a declaration for classification under Heading 3003.10 of the Central Excise Tariff for four products. The Department contended that the products were not patent or proprietary medicaments but should be classified under Heading 3003.20. The Tribunal observed that three out of the four products only displayed their generic names on labels, not meeting the requirements for patent or proprietary medicaments as per the definition in Note 2 to Chapter 30. Consequently, the goods were classified under Heading 30.03, and Modvat credit was denied for the duty paid on inputs used in their manufacture.

Denial of Modvat credit:
The Assistant Commissioner confirmed the denial of Modvat credit and imposed a penalty. The Tribunal found that the products did not meet the criteria for patent or proprietary medicaments as per the definition in Note 2 to Chapter 30. The absence of any monogram or invented word on the labels indicated that they were not patent or proprietary medicaments. The Tribunal rejected the appellant's argument of no mala fide intention, noting that the penalty imposed was nominal at Rs. 5,000 and did not warrant interference.

Penalty imposition:
The Tribunal noted that the appellant failed to demonstrate that similarly labelled medicaments were declared as patent or proprietary when cleared for home consumption. The penalty of Rs. 5,000 was upheld due to the lack of indication on the labels that the products were patent or proprietary medicaments.

Entitlement to rebate under Rule 12(1)(b):
The appellant raised a plea for entitlement to rebate under Rule 12(1)(b) of the duty paid on inputs used for manufacturing the exported products. However, the Tribunal stated that this issue was not before them and advised the appellant to pursue the claim with the appropriate authority if desired.

In conclusion, the appeal was dismissed, affirming the classification of the products under Heading 30.03, the denial of Modvat credit, and the imposition of a nominal penalty. The Tribunal clarified that the appellant could pursue the claim for rebate separately with the appropriate authority.