1993 (12) TMI 139 - AT - Central Excise

Summary

Issues: Classification of Lanolin Anhydrous under Central Excise Tariff

Issue 1: Classification of Lanolin Anhydrous as a Medicament or Organic Compound
The appeal involved the classification of the product "Lanolin Anhydrous" under the Central Excise Tariff. The appellants claimed it should be classified as a medicament under sub-heading 3003.20 at a 'Nil' rate of duty, while the authorities classified it under sub-heading 1501.01 as an animal fat. The main contention was whether Lanolin Anhydrous, being a pharmacopoeial product manufactured under a drug license, should be classified as a bulk drug or an organic compound under Chapter 29, as claimed by the appellants.

Analysis:
The appellants argued that Lanolin Anhydrous should be classified as an organic chemical exempt from duty under Notification No. 234/86. They contended that being a pharmacopoeial product manufactured under a drug license, it should be considered a bulk drug as per the Drugs (Prices Control Order 1979). Additionally, they provided a certificate from the Directorate General of Health Services certifying it as a bulk drug. The respondents, however, argued that Lanolin Anhydrous, derived from wool grease, is an animal fat and should be classified under sub-heading 1501.01 of the Central Excise Tariff. The judges examined the nature and production method of Lanolin Anhydrous and referred to relevant chemical dictionaries and the Harmonised System to conclude that it is a crude grease obtained from wool and contains cholesterol esters, thus classifying it as an animal fat under sub-heading 1501.01.

Issue 2: Classification of Lanolin Anhydrous as a Medicament or Cosmetic
The appellants also argued that Lanolin Anhydrous should be classified as a medicament or cosmetic under Chapter 15, noting that it compared favorably with Indian Pharmacopoeia standards. They contended that being a pharmacopoeial product, it should not be classified under Chapter 15. The respondents, however, maintained that Lanolin Anhydrous, as an animal fat, falls under Chapter 15 and not Chapter 29.

Analysis:
The judges considered the uses and characteristics of Lanolin Anhydrous, noting its role as a base for ointments without therapeutic value. They concluded that its classification as a medicament under Chapter 30 was not appropriate, as it did not have therapeutic properties. Additionally, they referenced Note 2(a) of Chapter 30, which excludes goods of heading No. 15.01, further supporting the classification of Lanolin Anhydrous under sub-heading 1501.00 of Chapter 15.

Conclusion:
Ultimately, the judges confirmed the classification of Lanolin Anhydrous under sub-heading 1501.00 as an animal fat, rejecting the appellants' claims for classification as an organic compound or a medicament under different chapters. The appeal was dismissed based on the classification under the Central Excise Tariff.