2018 (1) TMI 1123 - AT - Central Excise

Classification of goods - Mucosat, Nurofit, MOD Caps, Kalpadyn-MC, Nerosafe etc. - The department took the view that the products are Dietary supplement/Nutritional supplement which would merit classification under CETA 2809.99 attracting miscellaneous MRP based assessment under Section 4A ibid - appellant held classification under CETA 3003.10 - Held that - a closer look at the xerox copies of such labels available in the appeal paper book indicates that all these products are basically multi-vitamins except MOD caps, which again are Methylcobalamin capsules, the pharmaceutical name for Vitamin-B12. For an item to merit classification under 2108, they should be other edible preparations not elsewhere specified or included . A close look at the sub-headings thereunder will indicate that items in the genre of edible preparations like lemonades, sharbat etc., find place thereat. The requirement of being edible is a prime necessity for attracting classification under 21.08. This being so, by no stretch of imagination, a product containing a bevy of vitamins, pharmaceutically produced and not even alleged to be a plant /fruit based extract, would merit classification under 21.08. The Tribunal in the case of Softesule Ltd. 2002 (6) TMI 92 - CEGAT, MUMBAI , had occasion to go into an identical matter and held that the impugned goods were classifiable under CETA 3003.10 and not under 2108.99 ibid. Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of products under Central Excise Act, 1944

Analysis:
The case involved the classification of goods manufactured by M/s. Tanmed Pharmaceuticals Ltd. under the Central Excise Act, 1944. The respondent cleared goods under Chapter heading CETA 3003.10, adopting transaction value under Section 4 of the Act. However, the department argued that the products should be re-classified under CETA 2108.99 as miscellaneous edible preparations, attracting MRP based assessment under Section 4A. A Show Cause Notice (SCN) was issued proposing re-classification, differential duty, interest, and penalties. The original authority confirmed these proposals, leading to an appeal by the respondent. The Commissioner (Appeals) held that the products are classifiable under CETA 30.03 as "medicaments," setting aside the duty demand and penalties. The department appealed this decision.

During the hearing, the department argued that the items were commonly known and sold as food and dietary supplements, emphasizing the lack of product licenses for most goods. The respondent countered, stating that the products, although labeled as dietary supplements, were sold through pharmacies against prescriptions. They relied on legal precedents such as Softesule Ltd. Vs. CCE, Mumbai and CCE, Mumbai Vs. Capsulation Services Ltd. The respondent also referred to HSN notes under Chapter heading 2106 regarding food preparations and supplements.

The core issue revolved around the classification of products like Nerocare, Nurolfort, Nerofit, and Neurotone. Despite some products labeled as dietary supplements, a closer examination revealed they were primarily multi-vitamins or Methylcobalamin capsules. For classification under 2108, products should be "other edible preparations not elsewhere specified or included." The Tribunal referenced the Softesule Ltd. case, which involved similar goods and concluded that they were classifiable under CETA 3003.10, not 2108.99. Following this precedent, the appeal by the department was dismissed, as the products did not meet the criteria for classification under 2108.

In conclusion, based on the analysis and the precedent set by the Softesule Ltd. case, the Tribunal found no merit in the department's appeal and dismissed it accordingly.