COMMISSIONER OF CENTRAL EXCISE Vs. JUGGAT PHARMA LTD.

JUDGEMENT

(1.) THIS is a revenue appeal against the Order -in -Appeal No. 47/95 upholding the claim of classification of the assessee on two items namely Mulmin drops and capsules under Chapter Heading 3003.10 and negativing the classification under Chapter sub -heading 2936.00 as claimed by the revenue in their review application before the Commissioner. Both the authorities had approved the classification list by giving detailed reasoned orders under Chapter sub -heading 3003.10. In the or -der -in -appeal, the Commissioner based his findings only on the ground that both the items are manufactured under licence and supervision under Drugs and Cosmetics Act and also he referred to Govt. of India letter No. X -11035/11/95 -D, dated 26 -5 -1995 which opined that Mulmin capsules and Mulmin drops (vitamin tonic) are considered as drugs Under Section 3(b) and also as Patent and Proprietary medicines Under Section 3(h)(II) of the Drugs and Cosmetics Act. He also referred to the letter No. DCD/CR -43/Mfg.94 -95, dated 10 -5 -1994 issued by Drugs Controller, Govt. of Karnataka, which had confirmed both these items are Patent and Proprietary medicine under licence in form 28 bearing No. SP -58/78 containing vitamins and minerals as active ingredients. No reference to the grounds and findings given by the Assistant Commissioner in his detailed Order -in -Original. The findings given by the Assistant Commissioner in his Order -in -Original para 6 are extracted hereinbelow : - "I have gone through the records of the case, assessees submissions and also heard the assessee's Consultant in person. The point to be decided in the instant case is the classification of Mulmin drops and capsules whether under 2936.00 or 3003.10 of CETA., 1985. Chapter sub -heading 2936.00 reads as "Provitamins are vitamins, natural or reproduced by synthesis (including natural and concentrates) derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent". Chapter sub -heading 3003.10 reads as : "Patent or Proprietary medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, siddha, homoeopathic or bio -chemic". To enable the correct classification of Mulmin drops and capsules, it is necessary to know the contents of the said products, which are : Vitamin A I.P. (as acetate), (cholecalciferol, Thiamine Hydrochlo -ride, Riboflavine, pyridoxine hydrochloride, nicontinamide, cyanocobalamin, calcium patothenate, ascorbic acid, zinc sulphate monohydrate, ferrous gluconate. It could be seen that in Chapter 29, the intermixtures of vitamins are just mixtures of vitamins and they are not subjected to any of the process such as conversion of powder into tablets or capsules, labelling, repacking from bulk packs to retail packs etc., whereas apart from mixing the vitamins and minerals dissolving in suitable vehicle, addition of stabilizer and dilutents is being carried out during the course of manufacture of Mulmin drops and capsules. These process are carried out in accordance with Chapter Note No. 5 of Chapter 30. Chapter Heading 2936.00 covers only provitamins and vitamins, but the Mulmin drops and capsules contains minerals such as ferrous gluconate and zinc sulphate alongwith the vitamins. The assessees contention in this regard that by addition of Ferrous gluconate and zinc sulphate which are inorganic chemicals of Chapter 28 change the character of products Heading 29.36 and renders them suitable for specific use as medicine is acceptable. Therefore, they aptly merit classification under Chapter 30 rather than 29. Mulmin drops and capsules comprises two or more constituents which have been mixed or compounded together with other pharmaceutical necessities for therapeutic and prophylactic uses and hence satisfy the definition of Medicament referred to in Chapter Note No. 2 (i) of Chapter 30. Certain products though sometimes called vitamins, have no vitamin activity or have a vitamin activity which is of secondary importance in relation to their uses. Further, medicaments are excluded from Chapter 29.36 as per Explanatory Notes of Harmonized Commodity Description and Coding System (page 407 & 408 refers). The extract of report given by Chemical Engineer, Madras, vide his letter No. 30/5/94/1168 -L -CX. 271 to 291 dated 24 -6 -1994 is given below : "It is seen from the ingredients mentioned on the original container that Mulmin capsules contain Zinc Sulphate and Ferrous Gluconate and vitamins Mulmin drops contain Phosphate sodium, Zinc Sulphate and Ferrous Gluconate and vitamins. In the pharmacopeia of India, zinc sulphate has been mentioned under the category of Emetic, Astringent, ferrous gluconate as Haematinic, sodium phosphate under the category of cathartic. Thus the above products contain also ingredients which are not considered as vitamin in pharmacopoeia and whose functions are different that of vitamin. Chapter Heading 29.36 of CETA covers provitamins and vitamins natural or reproduced by synthesis (including natural concentrates) derivatives thereof used primarily as vitamins and intermixtures of the foregoing, whether or not in any solvent. Thus, the products under reference being preparations containing vitamins and other ingredients may not satisfy the above criteria". In view of the above discussions, I hold that Mulmin drops and capsules are medicaments and are rightly classifiable under 3003.10 of CETA, 1985. Accordingly, I pass the following order : - Order I hereby order classification of Mulmin drops and capsules under Chaper sub -heading 3003.10 and classification list No. 7/94 effective from 1 -3 -1994 be approved accordingly. Further proceedings initiated in show cause notices C.No V/30/3/305/90 -B3/B4, dated 15 -3 -1994 and 14 -4 -1994 is hereby dropped."

(2.) ON a perusal of the above order, it is seen that the Assistant Commissioner has examined the entire evidence on record including the Chapter Notes in question. In Chapter Note No. 5 of the Chapter 30 and Chapter Note 2(i) of Chapter 30. He has also referred to the Chapter Heading 29 which deals only with the intermixtures of vitamin which are not subjected to any of the processes such as conversion of powder into tablets or capsules, labelling, repacking from bulk packs to retail packs etc. He has also referred to the Chemical Engineer's report in respect of the analysis done on these items, which clearly indicated the ingredients as zinc sulphate and ferrous gluconate and vitamins Mulmin drops contain phosphate sodium, zinc sulphate and ferrous gluconate and vitamins. He also refers to the Pharmacopeia of India which states that zinc sulphate has been mentioned under the category of emetic, astringent, ferrous gluconate as Haematinic, sodium phosphate under the category of cathartic. On the basis of these evidences, he concluded that the ingredients are different from those of the vitamins as contemplated in Chapter Heading 29.36 of the Central Excise Tariff Act. Excise Tariff Act, which covers provitamins are vitamins, natural or reproduced by synthesis (including natural and concentrates) derivatives thereof used primarily as vitamins and intermixtures of the foregoing, whether or not in any solvent.

(3.) AS can be seen from the grounds made by the Commissioner, there is no reference to these findings.