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TMI Blog2009 (3) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... can not be invoked - E/1266/2005 - A/649/2009-WZB/AHD - Dated:- 23-3-2009 - Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Murthy, Member (T) REPRESENTED BY : Shri V. Sridharan, Advocate, for the Appellant. Ms. M.I.J. Micheal, Jt. CDR, for the Respondent. [Order per : Archana Wadhwa, Member (J)]. - The appellants are engaged in the manufacture of various goods falling under different chapters. The dispute in the present appeal relates to classification of one of the products being manufactured by them, under the name and style "SHARKOFERROL". The appellants have claimed the classification of the same under heading 3003.10 of Central Excise Tariff Act as P P medicaments. On the other hand, Revenue's contention is that the said product is not a medicament but would fall under the Chapter heading 1901.01 as Malt extract. Accordingly, Commissioner vide his impugned order has changed the classification of the said product from appellant's claim to heading 3001.10, to heading 19.01, and confirmed the demands against the appellants, along with imposition of penalties. The said order of Commissioner is impugned before us. 2. We have heard Shri V. Sridharan, Ld. Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deficiency. (c) CHLOECALCIFEROL is Vitamin-D, which is required by the human body for ensuring proper homeostasis of Calcium. Deficiency of this vitamin leads to a disease known as rickets in children and ostedmalacia in adults. Each 15 ml. of SHARKOFERROL contains 600 I.U. of Cholecalciferol. Hence, a dose of 3-4 teaspoonfuls per day will treat Vitamin-D deficiency and a dose of 1 to 2 teaspoonfuls per day will treat Vitamin D deficiency. (d) NIACINAMIDE is required by the human body for catalyzing a wide variety of oxidation-reduction reactions essential for tissue respiratory. Deficiency of niacinamide leads to a clinical condition known as pellagra which is characterized by signs and symptoms referable to the skin, gastrointestinal tract and central nervous system. Pellagra occurs most commonly in the setting of chronic alcoholism, protein calorie malnutrition and multiple vitamin deficiencies. The human daily requirement of niacinamide varies with the caloric requirement and is in the range of 15 to 20 mg for adults. Each 15 ml. of SHARKOFERROL contains 45 mg. of niacinamide thus a daily dose of 3-4 teaspoonfuls of SHARKOFERROL, provides 45-60 mg of niacinamide wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RACT, NOT CONTAINING COCOA POWDER IN A PROPORTION BY WEIGHT OR LESS THAN 50%, NOT ELSEWHERE SPECIFIED OR INCLUDED; FOOD PREPARATIONS OF GOODS OF HEADINGS NO. 4.01 TO 4.04, NOT CONTAINING COCOA POWDER OR CONTAINING COCOA POWDER IN A PROPORTION BY WEIGHT OF LESS THAN 10%, NOT ELSEWHERE SPECIFIED OR INCLUDED. - Put up in Unit containers and ordinarily intended for sale 1901.10 - - For infant Use 1901.19 - - Other 1901.90 - Other" This sub heading 1901.90 got split up into during the period of dispute into the following headings : Other 1901.91 Malt Extract 1901.92 Food preparations containing malt or malt extract or cocoa powder in any proportion. 1901.00 Other" 7. While holding that the product is properly classified under heading 19.01, Commissioner has observed that the product in question is being marketed by the appellant as "Malt nutrient tonic". The essential character in the product is being imparted by malt extract and same is also being marketed as Malt Nutrient Tonic, as is clear from the label of the container. The appellant's contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. The Malt extract is used only as a vehicle for carrying vitamins and minerals. They have also referred to HSN Explanatory Notes to heading 30.03, in support of their plea which are to the effect that the said heading covered preparations in which foodstuff or beverage merely serves as support, vehicle or sweetening agent for the medicinal substances (e.g. in order to facilitate ingestion). They have, in support of above plea relied upon various decisions of the Tribunal. The reliance by Commissioner on the Rules of interpretation Rule 2(b) by holding that essential character of the product is given by Malt Extract, which is main ingredient, is not correct. They have emphasized on the fact that the product consists of vitamin and minerals with Malt extract and the same is for therapeutic use and as such, should be considered as medicament. The product cannot be considered Malt extract with added vitamins since the contents of vitamins are of therapeutic quantity is provided under the schedule -V of the Drugs and Cosmetics Act. The demand also stands agitated on the point of limitation, inasmuch as one of the show cause notices adjudicated vide impugned order, was issued on 17- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. As recorded by Commissioner in his order that Vitamins are active agents usually complex chemical composition, which are obtained from outside sources and are essential for proper functioning of human organism. They are effective in minute amounts and are meant only for nutrition of the body as a general. 11. Commissioner in his impugned order have also discussed the affidavit produced by the appellant indicating that Sharkoferrol is to be sold only on the Doctor's prescription. All the deponents of the affidavit have, subsequently, in their statements indicated that such affidavits were given on some medical representative approaching them. All of them subsequently agreed that Sharkoferrol can be sold off the shelf, without prescription of any Doctor. Inasmuch as Sharkoferrol is being advertised and marketed as nutrition tonic for building strength for body building etc., the same does not require the prescription of any Doctor and any person feeling weak can consume the same. We totally agree with the reasoning of the adjudicating authority that use of various vitamins and minerals of I.P. Standard will not convert the product into medicine. The same only reflect upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the beverage merely serves as a support, vehicle or sweetening agent for the medicinal substances (e.g. in order to facilitate ingestion) (emphasis supplied) As is clear from the above, the food items or food supplements containing vitamins, mineral and salts which are put up for the purpose of maintaining health or well being but have no indication as to use for the prevention or treatment of disease or ailment are excluded from the coverage of headings of Chapter 30. Further, the food stuffs containing medicinal substances are also excluded from the heading if those added solely to ensure the better dietetic balance, to increase energy giving or the nutritional value of the product. As we have already observed that various vitamins and minerals are added with the sole purpose of ensuring the better dietetic or to increase energy giving nutritional value of the product and the same cannot be held to be a medicament and would get ousted from the preview of Chapter 30. 14. We, apart from the above, find that an identical product with an identical dispute was dealt with by the Tribunal in the case of M/s. Coral Laboratories and vide order No. A/397-399/WZB/AHD/2008 dated 10-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct should be considered to be a medicament. We find that most of the said decisions were considered by Commissioner (Appeals) and distinguished by him. We have also gone through the same like the Hon'ble Supreme Court's decisions (1) CCE, Nagpur v. Vicco Laboratories [2005 (179) E.L.T. 17 (S.C.), (2) Puma Ayurvedic Herbal (P) Ltd. v. CCE, Nagpur [2006 (196) E.L.T. 3 (S.C.)], (3) CCE, Calcutta v. Sharma Chemical Works [2003 (154) E.L.T. (S.C.)], wherein by considering the various constituents of the product and the diseases for which the same were meant and that the ingredients were as per the Ayurvedic Text Books, it was held that the same were medicaments. We find that product in each case has to be considered in the light of the various factors and criteria's laid down by the courts from time to time. As already discussed, the said product does not pass the said criteria of common parlance test, absence of indication of any disease, projection of the product in the market and the ingredients being used for treatment of a particular disease etc. As such, we are of the view that the product in question cannot be held to be a medicament. The same is accordingly classifiable under ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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