Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of C. Ex. vs Wockhardt Pvt. Ltd. on 31 December, 1997
Equivalent citations: 1998(59)ECC390, 1998(100)ELT486(TRI-MUMBAI)
ORDER K.S. Venkataramani, Member (T)
1. The Respondents manufacture P or P medicines and filed a classification list for their product probofex capsule and liquid claiming classification under Item 1B of the old Central Excise Tariff and claiming exemption under Notification No. 17/70. The jurisdictional Assistant Collector felt that the product does not merit classification under T.I. 1B but it would be classifiable under T.I. 68 and issued show cause notice for the purpose. The Assistant Collector considered the reply to the show cause notice and found that in their own "Medical Times" January and March, 1996 their product probofex is mentioned. The Assistant Collector held that the product probofex is not an item of food going by the general usage of the term. He also did not accept the certificate given by the Food and Drug Control Authority that the product will not fall under the category of drug. He referred to their own "Medical Times" journal where the product was recommended for building up haemoglobin with a specific dosage. The Assistant Collector found that from the literature of the product it is used as food supplement and held that food supplement cannot be equated with food. He therefore ordered classification of probofex capsule and liquid under T.I. 68 and under that item he also denied the exemption claimed by the Respondents under Notification 234/82 because it is not food products or food preparations. Appeal against the Assistant Collector's order was allowed by the Collector of Central Excise (Appeals), Bombay leading to the present appeal.
2. The Collector (Appeals) held that the Item 1B covers prepared or preserved food put up in unit containers. The Respondents' product is protein based milk and put up in unit containers. It was noted that the product was neither a drug nor medicinal preparations within the meaning of Drugs and Cosmetics Act. The Collector (Appeals) held that by all standards the product is a food supplement deserving to be classified under Item 1B which specifically covers food product and hence cannot be consigned to the residuary Item 68 of the CET.
3. Shri V.K. Puri, the Id. SDR contended that the Assistant Collector has given detailed finding as to how the product cannot be considered as prepared or preserved foods. The Tariff Item 1B has to be interpreted and the wording therein has to be looked into for classification. Primarily it has to be decided whether the product is food and the Assistant Collector has clearly found that it did not fall under that category of food with reference to judicial decisions. The goods here are marketed as food supplement. The Id. SDR referred to the Concise Oxford Dictionary meaning of the term "supplement" as a thing or part added to remedy deficiencies. Reference was also made to Andhra Pradesh High Court judgment in Brooke Bond India Ltd. v. Union of India -1980 (6) E.L.T. 65 (A.P.) to say that the word "food" has no definition of universal application and it varies from statute to statute. Reliance was also placed on the Government of India decision In Re : Asian Chemical Works - 1982 (10) E.L.T. 609A wherein it was held that the scope of the word "food" under the Food Adulteration Act will be relevant to that Act alone. Therefore certification by Food and Drug Control Authorities will not be of relevance for classification under the Central Excise. Reference was also made to the dictionary meaning of the term "preparations" to mean specially prepared substances. The Id. SDR further cited and relied upon the decision of the Tribunal in the case of Collector v. Aaron Pharmaceuticals Pvt. Ltd. -1994 (74) E.L.T. 241 which is parallel on facts. The Tribunal held that the product called "Aprot" considered in that case was in the nature of tonic normally taken as food supplement and is not of a type normally considered as prepared or preserved food and the Tribunal held that it is not covered by Item 1B of the CET and in the absence of any other suitable heading will be classifiable under T.I. 68 of the CET and also such a product will not be eligible for Notification 234/82 under Item 68.
4. Shri C.S. Lodha, the Id. Counsel for the respondent contended that there are decisions of the Tribunal on similar facts earlier to the one relied upon by the Department wherein products similar to the present one have been held to be classifiable under Item 1B of the CET. He refers to the Final Order No. 146/90-C, dated 27-2-1990 passed in the case of Indo-Pharma Pharmaceutical Works Ltd. v. C.C.E., Bombay. This was followed by a subsequent decision in the case of Collector v. Li Take Pharmaceuticals Ltd. (Order No. 775/91-C, dated nil). Both these decisions were further followed in another decision of the Tribunal in the case of Adonis Laboratories v. C.C.E., Bombay-II (Order No. 109/92-C, dated 18-3-1992) all these products were having ingredients which are comparable with the present product and the ingredient protein hydrolysate is common to all which is one of the grounds taken in the show cause notice for excluding the item from coverage of 1B which the Id. Counsel also argues that in the case of animal food and animal food supplement there is adjudgment of the Supreme Court in Sun Export Corporation v. C.C, Bombay -1997 (93) E.L.T. 641 (S.C.) which lays down that animal food supplement will be covered by the generic term animal food. The Id. Counsel submitted that the principle laid down in this judgment would also be applied in the present case to hold that even as a food supplement the product will be covered by Item 1B of the CET.
5. We have considered the rival contentions. We are of the view, on a totality of the evidence in this case regarding the product in question namely ProBoFex, and going by the precedent decisions cited before us by the respondents, that there is no need to disturb the findings of the Collector (Appeals) that the product is correctly classifiable under Item 1B of the old Central Excise Tariff (CET) as prepared or preserved foods put up in unit containers for sale.
6. This for the reason that firstly, there is a certificate from the Food and Drug Administration of Maharashtra State dated 18-6-1985 on the subject of marketing of ProBoFex capsules wherein the administration has stated that the product is not a drug under the Drugs and Cosmetics Act, 1940. The above view was expressed on going through the label and carton of the product submitted by the respondents.
7. Secondly, as against the one decision of the Tribunal in Collector v. Aaron Pharmaceuticals dated 2-9-1994, holding that "Aprot", a product considered in that case, being a food supplement in the nature of a tonic is classifiable under Item 68 of CET, the respondents have cited and relied upon three decisions of the Tribunal rendered earlier in time which are in their favour. These are Indo-Pharma Pharmaceutical v. Collector in Final Order No. 146/90-C, dated 27-2-1990 relating to the product called "energex" for which the assessee claimed classification under Item 1B of CET which the Department sought to classify under Item 68 of CET. The Tribunal upheld the classification under Item 1B. This decision was followed in the case of Collector v. Li Take Pharmaceuticals in Order No. 735/91-C, wherein also the product considered was called "Prolita Syrup" whose classification was claimed under Tariff Item 1B of CET and the Department sought to review the approval of the classification so as to bring it under Item 14E of CET, as patent or proprietary medicine. Following these two decisions of the Tribunal another decision was rendered in the case of Adonis Laboratories v. Collector, Final Order No. 109/92-C. The Tribunal held that the product called "Aminoglobin" would be correctly classifiable under 1B of CET and not under Kem 14E, CET.
7. The Tribunal in the decision of Indo-Pharma relied upon by the respondents has considered the extract of a notification issued by the Ministry of Health and Family Planning, dated 11-4-1974 in the Gazette of India, wherein preparations classified as "food" have been itemised, and the Tribunal found that "protein hydrolysate" has been listed under heading "invalid foods" and the Tribunal observed that this notification would also support the case for classifying the product under 1B, CET. There also there was a certificate from the Food and Drug Administration saying that the product is not a drug.
8. In the Li Take Pharmaceutical case the Tribunal had relied upon the Madhya Pradesh High Court judgment in the case of Ramesh Medical Industries v. Union of India, 1980 (6) E.L.T. 598, which considered classification of glucose as an item of food under Item 1E of CET and not as P or P medicine under Item 14E thereof. The Tribunal further relied upon another judgment of the Andhra Pradesh High Court in the case of Siri Pharma v. Superintendent of Central Excise, 1978 (2) E.L.T. 21, wherein, the High Court held that essence of chicken is classifiable under Item 1B of CET. In this decision the Tribunal also noted the Finance Ministry's clarification dated 28-7-1975, wherein, it is stated that where a product is marketed as food, then it has to be classified under Item 1B of CET. Thereafter, the Tribunal also followed the precedent decision in the Indo-Pharma case supra. In the Adonis Laboratories, decision while following the above two precedents, the Tribunal considered the view of the Drugs Controller that the product "Aminoglobin" is marketed as food article and is not a drug.
9. However, the Tribunal in the Aaron Pharmaceuticals case in 1994 had no occasion to consider the precedents cited above because these were not cited before the Tribunal and hence proceeded to decide the matter on its finding that the product is obviously not of a type considered as prepared or preserved food. This decision of the Tribunal has apparently been passed per incuriam of the precedent decisions which were based on some High Court decisions on the subject as noted above and therefore it will be more appropriate for us to follow the three other precedents cited by the respondents and to hold that the product ProBoFex in this case is correctly classifiable under Item 1B of CET. In this context, it is also noted that the Collector (Appeals) has observed in the impugned order that when similar products namely (1) Protone (2) Pronutrine (3) Alprovit (4) Soyavit manufactured by other manufacturers are classified under Tariff Item 1B, the similar products manufactured herein by appellants cannot be under Tariff Item 68 of CET. It is further observed that the product considered in the Indo-Pharma case and Li Take case of the Tribunal also had "protein hydrolysate" as ingredient just like in ProBoFex under consideration. Further, although the alternate classification considered in two of the precedent decisions was Item 14E and not Item 68, that would not make any difference for applying the ratio of the decisions for classification of the product under 1B, CET.
10. In the result, we uphold the impugned order and reject the appeal.