2000 (10) TMI 771 - Commissioner - Central Excise

Summary

Issues:
Classification of the product 'Delyte' under CSH 3005.30 at 'NIL' rate of duty instead of CSH 3003.10 attracting duty @ 16%.

Analysis:
The appeal was filed against the Order-in-Original confirming a demand and penalty imposed on the appellants. The dispute revolved around the classification of the product 'Delyte' by the appellants under CSH 3005.30 rather than CSH 3003.10. The appellants claimed that the product should be classified under CSH 3005.30 at a 'NIL' rate of duty. The Deputy Commissioner, however, classified it under CSH 3003.10. The Deputy Commissioner relied on Chapter Note 2(ii) of Chapter 30 to argue that any pharmacopeial preparation with a brand name falls under CSH 3003.10. He also referred to Chapter Note 3 of Chapter 30 to exclude branded oral rehydration salt from CSH 3005.30.

Upon examination of the tariff headings, chapter notes, and HSN Explanatory Notes, the Commissioner found that the classification of the branded product 'Delyte' under CSH 3005.30 was appropriate. The Commissioner noted that CSH 3003.10 covers medicaments, with branded medicaments classified under this heading. Unbranded medicaments fall under CSH 3003.20. The Commissioner emphasized that the branded ORS should be classified under CSH 3005.30, which is a more specific description compared to CSH 3003.10. The Commissioner also highlighted that there is no prohibition in the chapter notes against branded ORS falling under CSH 3005.30.

Regarding the Deputy Commissioner's objection based on Chapter Note 3 of Chapter 30, the Commissioner clarified that the exclusion of branded ORS from CSH 3005.30 was not supported by any chapter note. The Commissioner explained that the omission of ORS in the list of items under CSH 3005.30 in Chapter Note 3 was an inadvertent error and should not impact the classification of branded ORS under CSH 3005.30. Consequently, the Commissioner set aside the Order-in-Original and allowed the appeal with consequential relief.