2024 (12) TMI 734 - AT - Central Excise

Classification of goods - animal feed supplements which contains ingredients such as calcium, magnesium, phosphorus, vitamin B12 and vitamin D3 - to be classified under Heading 3003 or 3004 of Schedule to Central Excise Tariff Act, 1985? - HELD THAT - The subject goods are having nutrient supplements which do not find any mention in British Pharmacopoeia or Indian Pharmacopoeia and which are not prescribed by veterinary doctors for cure of any ailment and that though the doses are prescribed, that does not mean that they are medicaments. The original authority has in order-in-original impugned, has rejected the applicability of this Tribunal s decision in the case of DABUR INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2005 (2) TMI 196 - CESTAT, NEW DELHI only for the reason that in the case of Dabur India Ltd. laboratory report was available and in the present case laboratory report is not there. Such ground for holding that the finding of this Tribunal in the case of Dabur India Ltd. are not applicable in the present case is not sustainable. Hon ble Supreme Court in the case of PUMA AYURVEDIC HERBAL (P) LTD. VERSUS COMMISSIONER OF C. EX., NAGPUR 2006 (3) TMI 141 - SUPREME COURT had held that the burden to show correct classification lies on Revenue. It is found that Revenue has not discharged such burden in the present case. Right from the initial stages of dispute, appellant has been claiming that the issue is no more res integra and settled in favour of the appellant through final order of this Tribunal in the case of Dabur India Ltd. In the said decision, similar products were held to be animal feed supplements. Thus, the classification adopted by the appellant under Heading 2309 and under Tariff Item No.23099090 is appropriate classification for animal feed supplements - the impugned order is set aside - appeal allowed.

Summary

Issues:
Classification of goods under Central Excise Tariff Act, 1985 - Animal feed supplements vs. pharmaceutical products - Burden of proof on Revenue - Applicability of previous Tribunal decision.

Analysis:
The case involved the classification of goods manufactured by the appellant, including animal feed supplements and pharmaceutical products, under the Central Excise Tariff Act, 1985. The appellant classified the products under Heading 2309, while the Revenue contended they should be classified under Heading 3003 or 3004, attracting central excise duty. The dispute arose from the composition of the products, which contained various ingredients. A show cause notice was issued demanding central excise duty, invoking extended limitation periods. The appellant argued that the products were animal feed supplements, not medicaments, citing relevant legal precedents and circulars. The original authority classified the products under Heading 3004, imposing a penalty.

The appellant appealed, relying on a previous Tribunal decision in the case of Dabur India Ltd., which was affirmed by the Supreme Court. The appellant argued that the products should be classified under Heading 2302 (now 2309) for animal feed supplements, not pharmaceutical products. The appellant emphasized that the burden of proof lies with the Revenue to show correct classification. The appellant also presented evidence from Pharmacopoeia to support the classification of the products as animal feed supplements.

The Tribunal analyzed the case, noting that the products were nutrient supplements not specified in Pharmacopoeia and not prescribed for curing ailments. The Tribunal rejected the original authority's reasoning for not applying the Dabur India Ltd. decision due to the absence of a laboratory report. Citing legal principles, the Tribunal held that the burden of proof was on the Revenue, which they failed to discharge. The Tribunal agreed with the appellant's classification under Heading 2309 for animal feed supplements, setting aside the impugned order and allowing the appeal.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the classification under Heading 2309 for animal feed supplements was appropriate. The decision emphasized the burden of proof on the Revenue and the applicability of previous Tribunal decisions affirmed by the Supreme Court in determining the correct classification of goods under the Central Excise Tariff Act, 1985.