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Issues involved: Classification of pharmaceutical products under Chapter Heading 3003.10 challenged, dispute regarding classification from Heading 3003.10 to 2108.99, natural justice considerations in passing the order.
Classification under Heading 2108.99: The Commissioner (Appeals) upheld the classification under Heading 2108.99 for most products based on the presence of vitamins and minerals, which were considered as excluded from Chapter 30 due to their nutritional role. The products were deemed as edible preparations not falling under Chapter 30, supported by the absence of disease indications and the general nature of the products. The reliance on case law was found inapplicable due to lack of specific therapeutic ingredients aligning with the judgment. The adjudicating authority's decision without a personal hearing was deemed justifiable for certain products, except for 'Karvol Plus' which was correctly classified under Heading 3003.10 due to its specific ingredients for common cold relief. Definition of 'food supplements': The Tribunal disagreed with the definition of 'food supplements' provided by the Dy. Commissioner, emphasizing the common understanding in commercial trade where the disputed entities were considered as pharmaceutical drugs. The entities were regulated by Drug Control Authorities, sold on prescription, and administered in prescribed dosages, indicating a medical rather than a food supplement nature. The absence of primary base extracts from plants or fruits in the products led to the conclusion that they did not qualify as food supplements under Heading 21.06. Exclusion from Chapter 30: The Tribunal found no reason to exclude the products from Chapter 30 based on the presence of vitamins and minerals, as they did not qualify as foods or beverages under Note 1(a) of the Chapter. The lack of evidence to classify the entities as food supplements or food preparations prevented their classification under Chapters 16 to 24 of the tariff. Natural justice considerations: The denial of a personal hearing to the appellants was deemed a violation of natural justice, as the right to be heard is fundamental. The orders passed without granting this right were required to be set aside, emphasizing the importance of upholding natural justice principles in administrative proceedings. Conclusion: The orders classifying the entities under sub-heading 2108.99 were set aside based on the findings that the products did not qualify as food supplements, the exclusion from Chapter 30 was not justified, and the denial of natural justice rights to the appellants was a significant procedural error.
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