2001 (7) TMI 349 - AT - Central Excise

Summary

Issues: Classification of product under Central Excise Tariff Act, 1985 - Patent or Proprietary medicaments vs. other medicaments

Analysis:
1. The appeal was filed against the Order-in-Appeal dated 31-10-1994, where the formulations manufactured by the appellants were classified under sub-heading 3003.10 of the Central Excise Tariff Act, 1985 as Patent or Proprietary medicaments.
2. The appellant argued that the product, Salbutamol Inhaler, should be classified under sub-heading 3003.20 as it is a medicament other than Patent and Proprietary medicaments. They highlighted that the product is specifically mentioned in the Pharmacopoeia of India and only the 'house mark' of the appellant is printed on the packaging, not a brand name.
3. The Revenue contended that the product was cleared under the name 'Glaxo,' indicating a relationship between the mark and the medicines, thus supporting classification under Heading 3003.10.
4. The central issue was whether the product should be classified as a Patent or Proprietary medicament under Heading 3003.10 or as claimed by the appellants under Heading 3003.20.

Legal Interpretation:
5. Chapter Note-2 (ii) of Chapter 30 of the Central Excise Tariff Act, 1985 defines 'Patent or Proprietary medicaments' as drugs or medicinal preparations not specified in recognized pharmacopoeias or bearing a brand name indicating a connection in trade between the medicine and a person with the right to use the name or mark.
6. The product in question being mentioned in the Pharmacopoeia of India raised the question of whether the 'house mark' on the packaging established a relationship between the mark and the medicines, as argued by the Revenue.
7. Referring to a previous Supreme Court judgment, it was established that a 'house mark' does not indicate a connection between the mark and the medicines, unlike a brand name. The court held that the use of a 'house mark' is to project the manufacturer's image and does not establish a trade connection, thus not qualifying the product as a Patent or Proprietary medicament.

Conclusion:
8. Based on the legal interpretations and precedents, the Tribunal set aside the impugned order and allowed the appeal, ruling that the product should be classified under sub-heading 3003.20 as a medicament other than Patent or Proprietary medicaments. The distinction between a 'house mark' and a brand name played a crucial role in determining the classification under the Central Excise Tariff Act, 1985.