1994 (12) TMI 208 - AT - Central Excise

Summary

Issues: Classification of Pharmaceutical Yeast under Central Excise Tariff Act - Chapter 21 or Chapter 30

Analysis:
1. Background: The appeal was filed against the order-in-appeal passed by the Collector of Customs & Central Excise, Madras regarding the classification of Pharmaceutical Yeast by the appellant.

2. Facts: The appellant, a yeast manufacturer, claimed exemption under Notification No. 234/86-C.E., dated 3-4-1986 for Dried yeast (BPC 73) or pharma yeast. The classification dispute arose when the Assistant Collector classified pharma yeast under Heading 3003.30 and other yeast under Heading 2102.10. The Collector (Appeals) allowed the appeal, classifying pharma yeasts under Chapter 21, leading to the present appeal.

3. Appellant's Arguments: The appellants contended that Pharmaceutical Yeast falls under Heading 30.03 as it is used for medicinal purposes and is a compound with therapeutic value. They highlighted that the Drug Control Department confirmed the quality of their Pharmaceutical Yeast, which is used to treat Vitamin B deficiency diseases.

4. Respondent's Response: The Respondent supported the impugned order and cited medical references indicating the medicinal use of yeast, primarily for vitamin deficiency diseases.

5. Legal Analysis: The key issue was whether the Pharmaceutical Yeast manufactured by the appellant should be classified under Chapter 21 or Chapter 30 of the Central Excise Tariff Act, 1985. The Collector (Appeals) noted that the appellant's products were not put up as medicaments but sold as raw materials for manufacturing medicaments by others.

6. Manufacturing Process: The Collector (Appeals) detailed the manufacturing process of Pharmaceutical Yeast, emphasizing its nutritional and therapeutic value. The yeast is grown in a specific medium, harvested, dried, and used as a source of protein and B vitamins.

7. Decision: After careful consideration, the Tribunal agreed with the Collector (Appeals) that the appellant's products were not marketed as medicaments but as raw materials for medicinal products. Therefore, the Pharmaceutical Yeast was classified under Chapter 21 and not Chapter 30. The appeal was dismissed based on this classification.

This judgment clarifies the classification of Pharmaceutical Yeast under the Central Excise Tariff Act, emphasizing the distinction between products marketed as medicaments and those sold as raw materials for medicinal purposes. The decision was based on the nature of the appellant's products and their intended use in the pharmaceutical industry, ultimately upholding the classification under Chapter 21.