2001 (1) TMI 679 - AT - Central Excise

Summary

Issues:
Classification of vitamin-based injections under Central Excise Tariff Act - Applicability of Chapter Note 4(a) of Chapter 30 - Differential duty and penalty imposition - Therapeutic value of products - Alternative contention for classification under different headings - Merits of the case not discussed by lower authorities - Pre-deposit waiver - Remand for de novo order.

Analysis:
The appellants manufactured vitamin-based injections and classified them under Chapter No. 3003.10 as P or P medicaments. However, the Assistant Commissioner issued show cause notices proposing to classify the injections under sub-heading 29.36, attracting higher duty rates, based on the grounds that they were dietetic products excluded from Chapter 30. The differential duty amounting to Rs. 9,87,144/- and a penalty were proposed to be recovered. The appellants contended that their products had therapeutic value due to ingredients other than vitamins, making them liable for classification under Heading 3003.10. The Assistant Commissioner rejected their contention, upholding the previous classification under sub-heading 2936.00, and imposed the differential duty and penalty.

The appellants appealed to the Commissioner (Appeals) who upheld the lower authority's decision, leading to the current appeal before the Appellate Tribunal. The appellants argued that their products were not merely vitamin mixtures but had therapeutic ingredients, citing precedents supporting their classification under Heading 3003.10. The Revenue contended that the products lacked therapeutic value and were dietetic supplements correctly classified under sub-heading 2936. The Revenue opposed the alternative classification as food supplements for animals under Heading 2302, stating it was not raised at the original authority level.

The Tribunal noted that the lower authorities did not adequately address the appellants' contentions regarding the therapeutic value of their products. Considering the deposited duty amount, favorable case laws, and the lack of thorough discussion by the lower authorities, the Tribunal granted a waiver of the balance duty and penalty, setting aside the previous orders. The matter was remanded to the original authority for a de novo order, instructing a detailed consideration of the appellants' submissions and relevant legal decisions. The original authority was directed to provide a fair opportunity for the appellants to present their case and to issue a final order within three months.

In conclusion, the appeal was disposed of by granting the waiver and remanding the matter for a fresh decision by the original authority, emphasizing a thorough examination of the appellants' contentions and legal references for proper classification of the products.