1998 (5) TMI 169 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Hexiprep, Hexiscrub, and Hexiaqua
2. Classification of Hexidine
3. Whether the demand is barred by limitation

Detailed Analysis:

1. Classification of Hexiprep, Hexiscrub, and Hexiaqua:
The primary ingredient in Hexiprep, Hexiscrub, and Hexiaqua is Chlorhexidine Gluconate Solution BP, which is used for disinfection. The products are described as surgical microbicidal solutions for skin and hand disinfection before surgery. The Department argued these products should be classified under CET Heading 38.08 as disinfectants rather than under CET sub-heading 3003.10 as medicaments. The Tribunal upheld this classification, noting that the products are used to prevent infections and thus fall under the category of disinfectants as per Note 1(a)(2) to Chapter 38. The argument that disinfectants under Heading 38.08 only cover those used on inanimate objects was rejected, referencing various definitions and literature indicating that disinfectants can also be used on living tissues. Consequently, the products were correctly classified under CET sub-heading 3808.90, not 3808.10, as disinfectants are not specified under the latter sub-heading.

2. Classification of Hexidine:
Hexidine is described as a treatment for Gingivitis, Aphthous Ulceration, and other oral infections. The appellants provided certificates from medical authorities and practitioners supporting its classification as a medicament under CET Chapter Heading 30.03. The Tribunal found that Hexidine has therapeutic properties and is prescribed for specific diseases, thus not fitting the definition of a cosmetic or toilet preparation under Chapter 33. The evidence presented by the appellants was not countered by the Revenue, leading to the conclusion that Hexidine is a medicament falling under CET sub-heading 3003.10.

3. Whether the Demand is Barred by Limitation:
The demand for the period March 1988 to November 1989 was issued under a show cause notice dated 29-5-1991, alleging mis-statement and suppression of facts by the appellants. The appellants argued that they had filed labels of their products with the classification lists, which were approved by the Assistant Collector. The Tribunal noted that the approval of classification lists implied that the labels were examined, and there was no evidence of suppression of information by the appellants. Citing the case of Ajanta Pharma Ltd. v. CCE, Aurangabad, the Tribunal held that the extended period of limitation was not applicable as there was no suppression of facts. Therefore, the demand for the period covered in Appeal No. E/770/92-C was barred by limitation.

Conclusion:
Hexiprep, Hexiscrub, and Hexiaqua are classified as surgical disinfectants under CET sub-heading 3808.90. Hexidine is classified as a medicament under CET sub-heading 3003.10. The demand for the period March 1988 to November 1989 is barred by limitation. The appeals are disposed of accordingly.