NATCO PHARMA LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) Appellants are the manufacture of the products viz. (i) stronic (ii) Vitamin B Complex (iii) Bovoplex (iv) Neuronat (v) Avitol and (vi) Hivit. These are admittedly vitamin based injections and the same were classifiable by them as P or P medicaments under Chapter No. 3003.10. They were issued six show -cause notices by the Assistant Commissioner of Central Excise, Hyderabad -III Division on the grounds that the listed injections manufactured by them are dietetic and as per Chapter Note 4(a) of Chapter 30 of the Central Excise Traiff Act, dietetic products are excluded from Chapter 30 and they are properly classifiable under sub -heading 29.36 attracting duty @ 20% ad valorum upto February, 1997 and @ 18% ad valorum from March, 1997. The claim of the party to classify these products under chapter heading 3003.10 to attract duty @ 15% ad valorum was therefore, proposed to be rejected and a consequential differential duty totally amounting to Rs.3,56,909/ - was proposed to be recovered from them, in addition to the imposition of penalty of Rs.32,000/ - imposed on them.

(2.) Appellants contested the issue of show cause notice before the AC and submitted that sub -heading 2936 covers only those formulations which consists of merely vitamin, provitamins and derivatives used primarily as vitamins. These sub -headings do not cover formulations which had apart from vitamins and certain other ingredients except drugs, minerals, proteins etc. and since all of their products contained these ingredients, they had therapeutic value and would accordingly be liable to be classified under heading 3003.10 as medicaments. They also made an alternative contention before the original authority that the said products are for treatment of animals only which is clearly indicated on the labels and would be administered on the advise from the Veterinary Medical Practitioners, which also signifies that it is a medicament and nothing else. The contention of the appellants has been rejected and the AC in his order had confirmed duty of Rs.3,56,909/ - and imposed penalty of Rs.32,000/ - under Rule 9(2) of Central Excise Rules, 1944 read with Section 11A.

(3.) The party preferred an appeal before the Commissioner (Appeals) who vide his order No. 261 to 263/2000 (H -III) CE dated 7.11.2000 held the order passed by the AC as sustainable and rejected the appeal of the appellants. The matter had also come earlier before this Bench in Appeal No.E/St/561/2000 and E/1166/2000 arising out of Order -in -Appeal No. 114/2000 dated 1.5.2000 and the Tribunal vide final order No. 107/2001 and stay order No. 46/2001 dated 5.1.2001 had remanded the case back to the original authority for de novo consideration. The findings of the Tribunal as contained in para -7 are extracted herein below: -