2001 (6) TMI 338 - AT - Central Excise

Summary

Issues: Classification of pharmaceutical entities under Chapter 35 instead of Chapter 30.

In this case, the appellants, holding a license under the Drug Control Law, faced a show cause notice proposing to classify their pharmaceutical entities under Chapter 35 of the CETA instead of Chapter 30, with a demand for differential duty for a specific period. The Commissioner (Appeals) upheld the demand based on various grounds, including the lack of documentary evidence on the composition of the products, the nature of enzymes, and the possession of a Drug License not entitling classification under Chapter 30. The appellate tribunal analyzed the manufacturing process of the entities, emphasizing the blending of enzymes with other substances before dispatch and the achievement of IP/BP standards. The tribunal noted that products meeting these standards are considered medicaments, as per Ministry of Finance instructions. The tribunal highlighted the importance of compliance with relevant laws, such as the Drugs and Cosmetics Act, in determining the marketability of the products. It also referenced a previous tribunal decision on classification under Chapter 30 for similar products. Ultimately, the tribunal remanded the matter to the Original Authority for reevaluation based on the findings, allowing the appellants to submit additional material.

This judgment revolves around the classification of pharmaceutical entities under the Customs and Excise Tariff Act, focusing on the distinction between Chapter 30 and Chapter 35. The key issues addressed include the evidentiary requirements for classification, the interpretation of HSN Notes regarding enzymes, the significance of possessing a Drug License, the achievement of IP/BP standards, and the impact of relevant laws on marketability. The tribunal's analysis delves into the manufacturing process, quality standards, and legal considerations to determine the appropriate classification. The decision to remand the matter reflects the complexity of the classification issue and the need for further assessment based on the presented arguments and evidence.