1996 (3) TMI 190 - AT - Central Excise

Summary

Issues:
Classification of pharmaceutical products as patent or proprietary medicines under Tariff Item 14E and Heading 3001.10, application of extended period for duty recovery, justification of demand for duty on Hematinic Capsules and Cough Syrup, challenge to the classification decision by the Additional Collector, approval of classification lists by the Department, suppression of information by the appellant, clarity on the date of the show cause notice, limitation period for duty recovery.

Classification of Pharmaceutical Products:
The judgment addresses the classification of pharmaceutical products, specifically Hematinic Capsules and Cough Syrup, as patent or proprietary medicines under Tariff Item 14E and Heading 3001.10. The Additional Collector classified the products as such due to the absence of specific names in recognized publications. The appellant's argument that supplying to Government Departments exempts them from this classification was rejected, emphasizing that purchaser identity is irrelevant for classification purposes. The Tribunal upheld the Collector's classification decision, noting the absence of successful challenge by the appellant.

Application of Extended Period and Duty Recovery:
The Extended period for duty recovery was applied by the Additional Collector based on the appellant's awareness of the products being patent or proprietary medicines despite classifying them as dutiable goods. The Tribunal analyzed the evidence, including classification lists approved by the Department, to determine if the appellant willfully suppressed information. It concluded that the appellant's inclusion of details in the classification lists did not constitute suppression, and the certificates on invoices were not conclusive evidence of the products being patent or proprietary medicines. As a result, the extended period of 5 years for duty recovery was deemed inapplicable.

Challenge to Classification Decision and Limitation Period:
The appellant did not dispute the absence of specific names in recognized publications for the products. However, they challenged the classification decision based on the Department's approval of their classification lists. The Tribunal clarified that the Department should have requested additional information if needed, and the appellant's inclusion of details in the lists did not amount to suppression. Regarding the limitation period for duty recovery, the Tribunal set aside the demand beyond six months from the relevant date of the show cause notice, confirming the demand for clearances within that period.

In conclusion, the judgment addressed the classification of pharmaceutical products, the application of the extended period for duty recovery, the challenge to the classification decision, approval of classification lists by the Department, suppression of information by the appellant, clarity on the date of the show cause notice, and the limitation period for duty recovery. The Tribunal upheld the classification decision, rejected the application of the extended period, and confirmed the demand for duty within the limitation period.