1989 (2) TMI 244 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Halls Icemint Tablets under Central Excise Tariff.
2. Determination of whether Halls Icemint Tablets are Ayurvedic medicines.
3. Applicability of Tariff headings 3003.30, 3003.19, and 17.04.

Issue-wise Detailed Analysis:

1. Classification of Halls Icemint Tablets under Central Excise Tariff:

The appellants manufacture Halls Icemint Tablets and claim classification under Tariff sub-heading 3003.30 as Ayurvedic medicine, which is chargeable to nil rate of duty. The ingredients of the tablets include Sucrose I.P., Liquid Glucose, Menthol I.P., Eucalyptus oil IP rectified, Glycerin, Spearmint Oil, Tartrazine ISI, Brilliant Blue, and potable water. The Assistant Collector classified the goods under 3003.19, chargeable at 15%, but the Collector (Appeals) reclassified them under 3003.30, considering them Ayurvedic medicines.

2. Determination of whether Halls Icemint Tablets are Ayurvedic Medicines:

The respondents claimed that Halls Icemint Tablets are manufactured under a license issued by the Director, Indian Medicines and Homoeopathy, and contain ingredients used in Ayurvedic medicine, thus qualifying for classification under 3003.30. They provided a certificate from Dr. T. Sripathy Rao, Project Officer, Chemical Research Unit (Ayurveda), Central Council for Research in Ayurveda and Siddha, certifying the tablets as Ayurvedic medicines. However, the revenue contended that the ingredients are of common usage with no specific medicinal properties or therapeutic value, and the product does not possess medicinal or curative properties. The revenue also argued that the product is commonly used as a mouth freshener and is sold by general merchants without a physician's prescription, indicating it is an item of confectionery rather than a medicine.

3. Applicability of Tariff Headings 3003.30, 3003.19, and 17.04:

The Tribunal examined whether the goods were assessable under Tariff sub-heading 3003.30 as Ayurvedic medicine, 3003.19 as patent or proprietary medicine, or under 17.04 as sugar confectionery. The Tribunal noted that the classification under 3003.30 was primarily based on the presence of menthol and eucalyptus oil, which are recognized in Ayurvedic literature. However, the Tribunal found that the certificate from Dr. Rao was not based on first-hand information or clinical trials and was not sufficient to establish the product as an Ayurvedic medicine. The Tribunal also noted that the product packaging did not indicate any dosage or period of usage, essential for a drug, and the product was marketed as a throat soother and mouth refresher, not as a medicine.

The Tribunal concluded that the product did not qualify as a medicine under Chapter 30 and should be assessed under Tariff heading 17.04 as sugar confectionery. The Tribunal referred to the Explanatory Note (Vol. I) at p.133 Note (v) of the harmonized system of nomenclature, which includes throat pastilles or cough drops under sub-heading 1704.90, provided they consist essentially of sugars and flavoring agents. The Tribunal also noted that the Central Excise Tariff of 1986-87 is not based on the harmonized system, but the interpretative rules for the Central Excise Schedule would apply.

Conclusion:

The Tribunal allowed the revenue's appeal, holding that Halls Icemint Tablets are not Ayurvedic medicines and should be classified under Tariff heading 1704.90 as sugar confectionery, subject to the other provisions of the law. The classification under 3003.30 or 3003.19 does not apply as the product does not meet the criteria for medicinal classification.