1997 (12) TMI 186 - AT - Central Excise

Summary

Issues: Classification of product "honeypro granules" under Central Excise Tariff Act - Whether it should be classified as a medicament under Chapter Heading No. 3003.10 or as a food supplement under Chapter Heading 2108.90.

Detailed Analysis:

1. The appellants classified their product "honeypro granules" under Chapter Heading No. 3003.10 with 15% duty as a medicament. However, the jurisdictional Asstt. Commissioner contended that the product was an edible food supplement for general health and energy, thus should be classified under sub-heading 2108.90 of the Central Excise Tariff Act. The total duty demanded in the show cause notices amounted to Rs. 65,685.77. The Commissioner (Appeals) upheld this classification, stating that the product was essentially a high protein nutritional product enriched with vitamins, meant for nutritional rather than prophylactic use, and thus rightly classified under Chapter Heading 2108.90 CETA.

2. The appellants argued that their product had been licensed as a drug under the Drugs & Cosmetics Act and formulated as per I.P. standards. They contended that the high zinc content, beyond the permissible limit for food, indicated its use for drug and medicine preparations. They cited legal precedents such as the Supreme Court decision in B.P.L. Pharmaceuticals Ltd. v. Collector of Central Excise, Vadodara, and the Madhya Pradesh High Court decision in Panama Chemical Works v. Union of India to support their classification as a medicament. They claimed that "honeypro granules" were prescribed for post-surgical, convalescent patients, and those with specific diseases like T.B. and diabetes.

3. The Department's representative argued that the product fell under fortified foods enriched with protein, thus excluded from Chapter 30 of the Central Excise Tariff Act. Referring to legal precedents, the representative contended that the product did not meet the criteria of a medicine as prescribed by a doctor for a specific period. The Department highlighted that no evidence was presented to prove the product was available only on a doctor's prescription, and similar products were marketed as nutritional supplements, not medicaments.

4. The Tribunal analyzed the product's label, composition, and intended use to determine its classification. The product was described as a milk protein enriched with various nutrients, to be consumed with warm milk and sugar. Applying the test laid down by the Supreme Court, the Tribunal found no clear indication that the product was intended for the diagnosis, treatment, mitigation, or prevention of any disease or disorder. The Tribunal noted that the product was not listed as a drug in medical references but rather as a nutritional supplement. Therefore, the lower authorities correctly classified the product under Chapter Heading 2108.90 as a food supplement, given its composition and intended use for nutritional purposes.

5. Ultimately, the Tribunal found no reason to interfere with the Commissioner (Appeals)'s decision and rejected the appeal, affirming the classification of "honeypro granules" as a food supplement under Chapter Heading 2108.90 of the Central Excise Tariff Act.