Custom, Excise & Service Tax Tribunal
Aristo Pharmaceuticals Pvt. Ltd vs Mumbai Iii on 18 September, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPLICATION NO: C/Stay-1403/2012
APPEAL NOS: C/334/2010 & C/747, 841 to 861/2012
[Arising out of Order-in-Appeal No: 03/Mumbai-III/2010 dated 04/01/2010 & 85 to 106/Mumbai-III/2012 passed by the Commissioner of Customs (Appeals),Mumbai III.]
For approval and signature:
Honble Shri S.S. Kang, Vice President
Honble Shri P.R. Chandrasekharan, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Aristo Pharmaceuticals Pvt. Ltd.
Appellant
Vs
Commissioner of Customs
Mumbai III
Respondent
Appearance:
Shri J.S. Sanghvi, Consultant for the appellant Shri K.S. Mishra, Asstt. Commissioner (AR) for the respondent CORAM:
Honble Shri S.S. Kang, Vice President Honble Shri P.R. Chandrasekharan, Member (Technical) Date of hearing: 18/09/2012 Date of decision: 18/09/2012 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
There are 23 appeals and in all these appeals the issue involved is common and, therefore, they are taken up together for consideration and disposal
2. The appellant M/s. Aristo Pharmaceuticals Pvt. Ltd., imported Probiotic Blend D0204 Dietary Supplement and sought classification of the same under CTH No. 30029030 as Cultures of Micro-organisms/bacteria (excluding yeasts). The department was of the view that the product is classifiable as Miscellaneous Edible Preparations falling under Heading CTH No. 2106 9099 as food preparations not elsewhere specified or included and the bills of entries were assessed accordingly. The appellant challenged the classification before the lower appellate authority who rejected their appeal and hence they are before us.
3. The learned counsel for the appellant submits that the goods Probiotic Blend D0204 is a formulation containing Lactobacillus micro-organism and yeast, and is an approved drug. The Drug Controller of India has directed all firms marketing the subject product as dietary supplement to obtain relevant licence under the Drugs and Cosmetics Rules; therefore, the goods cannot be classified as dietary supplement under Heading No. 2106 9099 and is rightly classifiable under 3002 9030. He, further, submits that they have been issued with a licence under Drugs and Cosmetics Rules to manufacture Probiotic Blend D0204 consisting of the following strains, namely; bifidobacterium longum; lactobacillus acidophilus; lactobacillus rhamnosus; and saccharomyces boulardii, and the same is a drug. He further submits that they are marketing the product as a drug for infectious diarrhea and rota viral diarrhea. They manufacture these goods from the imported material which is procured in bulk in 200 kgs. packing and which consists of the live bacteria as aforesaid. He also submits that the test certificate accompanying the product issued by the manufacturer clearly indicates that the ingredients contained in the products are starch, micro-organisms and magnesium stearate and the microorganisms are the four strains as indicated supra. It is his contention that they are only undertaking the process of converting this material into capsule form and marketing the same as a drug. Therefore, the material under importation has therapeutic and prophylactic properties. It is his further argument that merely because the drug is dietary supplement, it cannot be considered as a miscellaneous edible preparation.
4. The learned Assistant Commissioner (AR) appearing for the Revenue, on the other hand, contends that as per the declarations given in bill of entry by the appellant, the product is declared as dietary supplement and it is in bulk form in packing of 200 kgs. The product is nothing but a food supplement and hence is classifiable rightly under Heading No. 2106 as food preparations not elsewhere specified or included.
5. We have carefully considered the rival submissions. As the issue lies in a narrow compass, we are of the view that the appeals themselves can be disposed of at this stage. Therefore, after dispensing with the pre-deposit of the dues adjudged, we take up the appeals for consideration and disposal.
5.1. To be considered as a product falling under Chapter 21, the product should be a food preparation. The product under importation is live microorganisms in a base of starch and magnesium stearate. Further as per the certificate of analysis accompanying the goods at the time of importation given by the manufacturer, it is clear that the product contains four microorganisms and the product have been allowed to be cleared after obtaining the necessary permission from the Assistant Drugs Controller.
5.2. Taking into account the submissions made by the counsel for the appellant, we are of the view that the matter needs reconsideration by the original adjudicating authority as to whether the product under importation is a food preparation or a drug which has to be decided after drawing samples of the product and getting it tested by the Drug Control authorities to ascertain whether the product has therapeutic / prophylactic properties. Since the product is a mixture of various substances, the General Interpretative Rules would also come into play for classification of the product to ascertain the essential nature of the product under importation and thereafter, the classification would have to be made. Therefore, we set aside the impugned orders and direct the Revenue to consider the matter afresh after subjecting the product to test by the Drugs Controller Authorities and obtaining their expert opinion on the matter regarding the nature of the product.
6. Thus the appeals are allowed by way of remand. Needless to say, the appellant should be given an opportunity to be heard before final order is passed. The stay application is also disposed of.
7. We also direct the Revenue authorities to keep the assessment provisional in respect of future importation, if any, till the classification dispute is decided.
(Pronounced in Court) S.S. Kang (Vice President) (P.R. Chandrasekharan) Member (Technical) */as 6