1994 (3) TMI 202 - AT - Central Excise

Summary

Issues:
Classification of 'Hajmola Candy' under Central Excise Tariff Act - whether as medicaments (sub-heading 3003.30) or sugar confectionery (sub-heading 1704.90).

Analysis:
The appeal involved the classification of 'Hajmola Candy' under the Central Excise Tariff Act, specifically whether it should be categorized as medicaments under sub-heading 3003.30 or as sugar confectionery under sub-heading 1704.90. The appellants claimed the product fell under sub-heading 3003.30 and should benefit from an exemption from excise duty. The Assistant Collector, however, classified it as sugar confectionery due to its sugar content and the lack of evidence supporting its classification as Ayurvedic medicine. The Collector (Appeals) upheld this decision, noting that the product was primarily consumed for taste and not known for curing ailments. The ingredients of 'Hajmola Candy' were listed, and the appellants argued that it should be classified as Ayurvedic medicine based on authoritative Ayurvedic texts, expert opinions, and a previous court decision regarding a similar product. They contended that the sugar content did not diminish the medicinal efficacy of the active ingredients and that obtaining a drug license supported its classification as medicine. The Revenue, on the other hand, argued that the product's sugar coating and household recipe ingredients aligned it more closely with sugar confectionery under sub-heading 17.04. They emphasized the absence of recognition in Ayurvedic texts, clinical tests, or specific prescriptions as criteria for classifying the product as medicine.

The Tribunal analyzed the arguments presented by both sides and referenced a previous decision by the Madhya Pradesh High Court regarding a similar product called 'Swad.' Since the ingredients of 'Swad' and 'Hajmola' were identical, and no contrary decisions were presented, the Tribunal aligned with the High Court's ruling that 'Hajmola Candy' should be classified under sub-heading 3003.30 as medicaments. The Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellants.