2001 (5) TMI 375 - Commissioner - Central Excise

Summary

Issues: Classification of product "Honey" under Central Excise Tariff Act, 1985.

In this case, the appellant, engaged in manufacturing Ayurvedic Medicines, classified their product "Honey" as an ayurvedic unbranded medicine under CSH No. 3003.31, cleared for home consumption at nil rate of duty. The Department alleged it should be classified under CSH No. 3003.39, attracting duty @ 8%. The adjudicating authority confirmed the demand and imposed a penalty under Rule 173Q of CER, 1944. The appellant argued that "Charak" was their housemark, not a brand name, and Honey should be classified under Chapter 4 as a food product. The issue was whether "Honey" could be considered a branded product under CSH 3003.39. The product received from apiaries was minimally processed and packed, not mentioned in any pharmacopoeia, with no therapeutic properties. The appellant's use of "CHARAK" was a housemark, not a brand, as per Astra Pharmaceuticals Pvt. Ltd. v. Collector. The design and description on the label did not make it a branded product eligible for CSH 3003.39. The order was set aside, remanding the case for reclassification under Chapter 4.

This judgment highlighted the distinction between a housemark and a product mark in the pharmaceutical business, emphasizing that a housemark is an emblem of the manufacturer, while a product mark identifies the specific product. The appellant's argument that "Charak" was their housemark, not a brand name for Honey, was crucial in determining the classification of the product. The court considered the Supreme Court's decision in Astra Pharmaceuticals Pvt. Ltd. v. Collector, which clarified that a special preparation made by the manufacturer qualifies as a patented medicine. The court analyzed the processing and packaging of the Honey by the appellant, noting that it lacked therapeutic properties and was not mentioned in any pharmacopoeia. This lack of medicinal properties supported the appellant's claim that the product should be classified as a food product under Chapter 4. The court also examined the labeling of the product, particularly the presence of the "AGMARK" mark, typically found on food products, further supporting the reclassification argument under Chapter 4.

Overall, the judgment focused on the interpretation of the classification rules under the Central Excise Tariff Act, 1985, specifically regarding the classification of the product "Honey" by the appellant. By analyzing the nature of the product, the use of the housemark "Charak," and the labeling details, the court determined that the product did not qualify as a branded product under CSH 3003.39 but should be reclassified under Chapter 4 as a food product. The decision to set aside the original order and remand the case for reevaluation underscored the importance of accurate classification based on the specific characteristics and properties of the product in question.