2009 (6) TMI 276 - AT - Central Excise

Classification of Calcium Gluconate - Appellant s claim classification of the product under CETH 3003.30 as medicaments whereas the Commissioner in the Order-in-Original has confirmed the classification of the product under CETH 2918.00 as organic chemical. Held that Calcium gluconate IP manufactured by the appellants is clearly classifiable under CETH 2918.00 - As regards penalty we agree that the Commissioner has gone beyond the remand order and the appellants could not be visited with demand for extended period and penalty when the department has not even appealed against the Order-in-Original limiting the demand to the period of limitation and not imposing any penalty. Therefore we set aside the penalty imposed on the appellants and also demand for extended period. - The learned advocate s contention that the decision of the Tribunal in Shanpur Industries was rendered ex parte and therefore is not relevant is clearly not correct. Absence of assessee may indicate their realization that Revenue s case is correct such decision can be relied on especially if statements of assessee recorded earlier are on record

Summary

The issues presented and considered in the legal judgment are:1. Classification of Calcium Gluconate under CETH 3003.30 as medicaments versus CETH 2918.00 as organic chemical.2. Invocation of extended period for demand and imposition of penalty.Issue-wise detailed analysis:Issue 1: Classification of Calcium Gluconate- Relevant legal framework and precedents: Note 2(i)(a) of Chapter 30 regarding products compounded together for therapeutic or prophylactic use.- Court's interpretation and reasoning: The Commissioner classified the product under CETH 2918.00 based on the Chapter Notes and previous decisions.- Key evidence and findings: Statements from industry professionals supporting classification under CETH 2918.00.- Application of law to facts: The Court found that the product falls under CETH 2918.00 based on the Chapter Notes and industry practices.- Treatment of competing arguments: Appellant argued for classification under CETH 3003.30 citing Tribunal decisions and the definition of medicament.- Conclusions: The Court upheld the classification under CETH 2918.00 based on the Chapter Notes and industry practices, rejecting the appellant's arguments.Issue 2: Invocation of extended period and penalty- Relevant legal framework and precedents: Section 11A regarding the period of limitation for demands.- Court's interpretation and reasoning: The Commissioner imposed penalty and extended the demand period, which the Court found to exceed the remand order's scope.- Key evidence and findings: Lack of challenge by the department against the previous Order-in-Original limiting the demand period.- Application of law to facts: The Court held that the appellants should not be penalized for the extended period when the department did not appeal the previous order.- Conclusions: The Court set aside the penalty and demand for the extended period, limiting the demand to the period under Section 11A.Significant holdings:- The Court upheld the classification of Calcium Gluconate under CETH 2918.00 based on Chapter Notes and industry practices.- The Court set aside the penalty and demand for the extended period due to exceeding the remand order's scope.In conclusion, the legal judgment addressed the classification of Calcium Gluconate and the imposition of penalty and extended demand period. The Court upheld the classification under CETH 2918.00 and set aside the penalty and extended demand period.