GERMAN REMEDIES LTD. Vs. COMMR. OF C. EXCISE

JUDGEMENT

(1.) THE application by German Remedies is for waiver of deposit of duty totalling Rs. 92.52 lakhs and penalty of Rs. 95.76 lakhs; the application by G.C. Madhom, its Excise Manager, is for waiver of deposit of penalty of Rs. 1 lakh imposed on him under Rule 209A.

(2.) THE duty has been demanded, and penalties imposed, on the view that the medicament manufactured by the applicant was correctly to be classified as patent or proprietary medicament in sub -heading 10 of Heading 3003 and that the assessee had wrongly classified the goods in sub -heading 20 as medicaments of non -patent or proprietary. The medicament consisted of enteric coated acetyl salicylic acid tablets. The blister packs containing these tablets, as well as cartons which covered them, bore, in addition to the name of the tablets, the letters "ASA". These letters in brackets have been held by the Commissioner to be a brand name within the meaning of Note 2 to Chapter 30. The Commissioner has also invoked the extended period of limitation in respect of Rs. 84.76 lakhs on the ground that the assessee had deliberately and wilfully misdeclared the classification of the goods.

(3.) ON merits, we find the issue arguable. The explanation tendered by the counsel for the applicant, that the letters (ASA) were used as an abbreviation and do not constitute a brand name, is prima facie difficult to accept. He is not able to explain why, when the goods have been described by using their full name, it was necessary to add this abbreviation. The departmental representative points out that the assessee had earlier used the same letters in a stylised manner using letters of different colouring, and treated it as a brand name. In this background, it is difficult prima facie not to believe that the use of the letters (ASA) was to continue the association that had arisen in the mind of the consumer earlier by using these letters. However, we agree that the applicant has a strong prima facie case on limitation. The demand is for the clearances made from April, 1998 to December, 1999. The show cause notice issued on 30th April, 2001, invoked the extended period in the classification list that it filed on 2 -4 -1998. The assessee had enclosed the copy of the label. From this, it would prima facie have been clear to the department that the assessee fixed the letters (ASA) on the cartons containing the goods. The Commissioner's attempt to get over this objection which was raised in reply to the notice that it was misleading is prima facie difficult to accept. The departmental representative is not able to answer the question as to how, when the department came to the conclusion on the basis of the details furnished by the assessee in the classification list three years later, that the goods were patent or proprietary medicament, it could come to this conclusion within six months of the filing of the classification list. Prima facie, therefore, we find the demand for the extended period untenable.