2018 (9) TMI 1131 - AT - Central Excise

Classification of goods - SIOOXY - contention of revenue was that the said goods fall under Tariff Item No.3004.50.90 as other medicament contain vitamins or other products of heading 2936, whereas the contention of the appellant was that the said goods are classifiable under Chapter 15 of Schedule to Central Excise Tariff Act, 1985 as dietary supplements. Held that - From the record, we are unable to know whether revenue has got the product got tested by the Drug Control Authorities to come to the conclusion that the product has therapeutic or prophylactic properties and also whether the natural ingredients are encapsulated as such without subjecting to any chemical modification. This fact can be verified by the Original authority - appeal allowed by way of remand.

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985

Analysis:
1. Issue: Classification of goods under Tariff Item No.3004.50.90 or Chapter 15 of Schedule to Central Excise Tariff Act, 1985.
- Details: The dispute arose regarding the classification of goods called SIOOXY. The revenue contended that the goods fell under Tariff Item No.3004.50.90 as medicaments, while the appellant argued they should be classified under Chapter 15 as dietary supplements. Various show cause notices led to the impugned Order-in-Appeal classifying the goods under Chapter 30.
- Judgment: The Tribunal noted that Heading No.30.04 covers medicaments for therapeutic uses, whereas the appellant claimed the goods were sold as dietary supplements, not medicines. The appellant cited the HSN Explanatory notes and a previous Tribunal order to support their classification argument.

2. Issue: Interpretation of classification under Central Excise Tariff Act.
- Details: The appellant argued that the goods should be classified under CTH 1515 90, not under CTH 3004 as medicaments. They highlighted that the product description indicated no medicinal use and contained natural ingredients with antioxidant properties.
- Judgment: The Tribunal found that the product did not have therapeutic or prophylactic properties as claimed by the revenue. They referred to previous cases to support the classification under CTH 1515 90, emphasizing that natural properties alone do not classify a product as a medicament.

3. Issue: Verification of product properties by Drug Control Authorities.
- Details: The Tribunal raised concerns about whether the revenue had the product tested by Drug Control Authorities to confirm therapeutic properties and if natural ingredients were encapsulated without chemical modification.
- Judgment: The Tribunal remanded all four appeals to the Original authority for verification of these facts and to decide the matter afresh in line with the Final order of the Tribunal in a similar case. They emphasized providing the appellant with a fair hearing during the process.

In conclusion, the Tribunal allowed all the appeals by way of remand, directing the Original authority to verify specific facts regarding the product properties and classify the goods accordingly, ensuring a fair hearing for the appellant.