1999 (2) TMI 183 - AT - Central Excise

Summary

Issues: Classification of product under tariff headings 3808.10 and 3003.10, applicability of extended period for recovery of duty, criteria for determining a product as a medicament, requirement of license under Insecticides Act and Drugs and Cosmetics Act.

In this case, the appellant manufactured a product named "Oona" without paying duty, classifying it under Heading 3808.10 as an insecticide. The department proposed reclassification under Heading 3003.10 as a patent medicine, demanding duty under the extended period of Section 11A. The Collector ruled out the extended period, but classified the product under Heading 3003.10, leading to the appeal.

The appellant contended that the product is rightly classified as an insecticide under Heading 3808.10, being registered under the Insecticides Act and not requiring a license under the Drugs and Cosmetics Act. They argued against the Collector's reliance on previous decisions and the product's composition, emphasizing its use as an insecticide.

Analyzing the product's composition, the Tribunal found it more suited for classification under Heading 3003.10 as a medicament due to its ingredients and intended use for treating pediculosis. The presence of malathion, neem, karanj oils, and other extracts indicated a medicinal purpose, supported by references to pediculosis in pharmacopeias. The lack of a specific certification by the drug control authority did not negate its classification as a medicament.

Regarding the criteria for determining a product as a medicament, the Tribunal noted that specific certification by the drug control authority was not mandatory. The Supreme Court's judgment did not establish universal criteria, and the product's preventive and curative properties reinforced its classification as a medicament under Heading 3003.10.

The Tribunal concluded that the product fell under Heading 3003.10 as a medicament, dismissing the appeal. It highlighted that the requirement of a license under the Insecticides Act did not preclude its classification as a drug, emphasizing that not all medicaments need physician prescriptions. The decision upheld the reclassification and duty demand, affirming the product's classification as a medicament under the relevant tariff heading.