2015 (10) TMI 1839 - AT - Central Excise

Area based exemption - Classification of goods - products namely Gulabari, Keora Water and Shilajit Capsules - appellants were paying duty on these products either by utilizing Cenvat credit or by cash and claimed the same as refund of the amount paid through PLA - Exemption under Notification No. 56/2002-CE. - Held that - In the absence of specification or definition as to what constitutes a Rose Water or a Keora Water, commercially accepted parlance has to be considered. It is not in dispute that the products labels clearly carry the name as Rose Water and Keora Water and the lower authorities conclusion for not considering them under the specific heading is not legal and tenable. These products cannot be considered as aqueous solutions of essential oils under heading 3301 as that heading deals with essential oils, products of essential oils and aqueous distillates and solutions of essential oils. Further, as per the Rules of interpretation when there is a specific heading by the very same name of the product these products cannot be put under generic heading of aqueous solution. As such, we find that these products which are emerging as manufactured items are rightly classifiable under heading 33030020 and 33030030. It is also necessary to mention here that the Department cannot take two different views in respect of same product manufactured by the same person in two different units. - present view in respect of Jammu unit is intended only to deny the benefit under Notification No. 56/2002-CE without much legal basis. Regarding classification of Shilajit Capsules - On careful consideration of the observations of the lower authority and the submissions of the appellant, we find that though the Department claimed that Shilajit Capsules are generic Ayurvedic medicine as per the formula/ingredients mentioned in Authoritative Ayurvedic text, no documentary support to the effect that the product cleared by the appellant is as per any such text has been put forth before us. The appellant produced registration of this Shilajit Capsules with the Drug Controller and in absence of any contrary evidence by the Department as mentioned above, it is clear that the Ayurvedic medicine cleared by the appellant is manufactured PP medicine and not of generic nature. - Decided in favour of assessee.

Summary

Issues: Classification of Gulabari, Keora Water, and Shilajit Capsules for Central Excise Duty exemption under Notification No. 56/2002-CE.

Classification of Gulabari and Keora Water:
The dispute centered around whether the process of manufacturing Gulabari and Keora Water amounted to "manufacture" for Central Excise Duty purposes and their correct classification under the Central Excise Tariff. The appellant argued that the products were distinct from the raw materials used and should be classified under specific headings in the Tariff. The Tribunal found that the processes involved in producing these items resulted in commercially identifiable products, meeting the criteria for "manufacture." The products were held to be rightly classifiable under specific headings in the Tariff, contrary to the Department's contention. The Tribunal emphasized that the Department cannot adopt different views for the same products manufactured by the same entity in different units, ruling in favor of the appellant.

Classification of Shilajit Capsules:
Regarding Shilajit Capsules, the appellant claimed they were not generic Ayurvedic medicine but patented and proprietary (PP) medicine manufactured based on their patented formula, not conforming to the formula specified in authoritative Ayurvedic texts. The Tribunal noted that the Department failed to provide evidence that the product complied with any specific Ayurvedic text. In the absence of such proof, the Tribunal concluded that the capsules were PP medicine and not of a generic nature, allowing the appellant's classification under heading 33049011. The appellant's compliance with drug licensing requirements further supported their classification.

Conclusion:
The Tribunal allowed the appeals, providing relief to the appellant based on the findings related to the classification of Gulabari, Keora Water, and Shilajit Capsules. The judgment highlighted the importance of consistent classification practices and the need for evidence to support classification decisions, ultimately ruling in favor of the appellant's contentions.