Customs, Excise and Gold Tribunal - Delhi
Cattle Remedies vs Commissioner Of Central Excise on 29 September, 2003
Equivalent citations: 2004(163)ELT79(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This order will dispose of the above captioned two appeals arising out of the common order-in-original passed by the adjudicating authority. Appeal No. E/58/02-B has been filed by the assessee while the other appeal No. E/188/03-B has been filed by the Revenue.
2. In appeal No. E/58, the assessee has challenged that part of the impugned order vide which the classification of the goods in question viz. BLOTINOX, CATORRHOEA, CATGALL, DRESSOL, DEWORMIN, MAGGACITE, PROLLAPSE-IN, CATCOUGH, CATONE, DUGDH-DAN and UTEROTONE had been held to be under sub-heading 3003.30 upto 22-7-96 and under 3003.39 w.e.f. 23-7-96, of the CETA. The learned Counsel has contended that these goods cannot be classified under this sub-heading being not ayurvedic veterinary medicaments, but are classifiable only under Heading 23.02 as animal feed. On the other hand, the learned SDR has reiterated the correctness of the findings of the adjudicating authority classifying these goods under subheadings 3003.30 and 3003.39 of the CETA.
3. We have gone through the record and heard both sides. Admittedly the assessee has got Drug Licence bearing No. 3/84 from the Drug Control Authority. In that Licence, these goods had been listed as drugs which they had been permitted to manufacture. This circumstance goes a long way to prove the allegations of the Department that these goods are drugs/medicines, otherwise if these were not so, the Drug Control Authority would not have listed them as drugs in the Drug Licence.
4. It also remains undisputed that the assessees procured registration certificate from the Directorate of Industries for manufacture of Ayurvedic Veterinary Medicaments. This certificate was issued by the authority on the information supplied by the assessees regarding the manufacture of the goods by them and on that information, they must have shown these goods as Ayurvedic Veterinary Medicaments, otherwise if the goods were only animal feed supplements, no such certificate was required even for the manufacture of the same. Even on the packing of these goods, the same had been declared as Ayurvedic Veterinary Medicines. The use and purpose of these goods had also been mentioned on the packages. We also find that the assessees had consistently even advertised these goods as medicines and not as animal feed supplements.
5. Therefore, keeping in mind all the above referred facts and circumstances, in our view, the above referred goods had been rightly classified under sub-heading 3003.30 up to 22-7-96 and under sub-heading 3003.39 w.e.f. 23-7-96 as Ayurvedic Veterinary Medicaments. We uphold the findings of the adjudicating authority regarding the classification of these goods.
6. In this appeal, besides the classification issue, the learned Counsel has also raised the issue of brand name and limitation. The Counsel has contended that the adjudicating authority has wrongly concluded that the assessees were using the brand name of another person on the goods being manufactured by them, especially when the dispute in that regard is still pending between them and another person in the Hon'ble High Court of Delhi. He has also contended that the demand raised is time barred as all the material facts regarding the nature of production of the goods were within the knowledge of the Department and as such, the extended period of limitation could not be invoked. The provisions of Section 11AC could not be invoked for imposing penalty equal to the amount of duty for the period prior to 28-9-96. The learned SDR while refuting this contention of the Counsel, has reiterated the correctness of the impugned order in this regard.
7. We find from the record that the assessees had been charged with the user of brand names CATCOUGH, CATONE, AND UTEROTONE belonging to M/s. Bio Herbs Farma, Hathras. These brand names, no doubt, stands registered in favour of the said company. But we also find that the assessees have challenged the user of these brand names by the said company on the ground that they were using it since 1969 whereas the said company obtained registration only in 1981. They had also moved the competent authority under the Trade and Merchandise Marks Act in this regard and even challenged the right of the said company to use the above said brand names before the Hon'ble Delhi High Court and they had been allowed to continue with the user of the brand name. But all these facts had not been properly appreciated and weighed by the adjudicating authority while denying the benefit of the SSI Notification to the assessees on the ground of having used the brand names of another person. The matter in this regard deserves to be reexamined by the adjudicating authority.
8. On the question of limitation, the contention of the Counsel, in our view, cannot be accepted. There had been apparently suppression of material facts by the assessees from the Department. They had kept secret from the Department the fact of their manufacture of Ayurvedic Medicaments. They had been rather representing that the goods in dispute manufactured by them were only animal feed supplements. It was their duty to disclose honestly the true nature of the goods manufactured by them. Having kept concealed those facts, they had been rightly charged with the allegation of suppression of the correct facts from the Department and as such the extended period of limitation had been correctly invoked against them.
9. Therefore, the duty demand after deciding the issue of brand name afresh, as observed above, will be redetermined by the adjudicating authority and so also the issue of imposition of penalty under Section 11AC read with Rule 173Q keeping in view the fact that Section 11AC came into force w.e.f. 28-9-96 whereas the demand period ranges from 1994-95 to 1998-99. No other point has been raised in this appeal.
10. In appeal No. E/188, the Revenue has disputed the validity of that part of the impugned order vide which the adjudicating authority had classified the two products viz. CALMIN AND VIMIN manufactured by the assessees under Heading 23.02 as animal feeds.
11. The learned SDR has contended that these goods were also drugs/animal medicines and as such, they are classifiable under sub-heading 3003.30 and 3003.39 and that the adjudicating authority has wrongly classified them under sub-heading 2302.00 as animal feed supplements. But in our view, this contention of the SDR is not liable to be accepted. These goods had not been listed as drugs in the Drug Licence issued to the assessees by the Drug Control Authority. These goods also do not stand covered by the Registration Certificate issued to the assessees by the Directorate of Industries for manufacture of Ayurvedic Veterinary Medicaments. We also find that these goods had never been marketed as medicines; rather even on their packing, these had not been described as medicines but only cattle feed supplements. Therefore, by taking into account all these facts and circumstances, in our view, the adjudicating authority has rightly classified these goods under Heading 23.02 of the CETA as animal feed supplements. The impugned order passed by the adjudicating authority in this regard is perfectly legal and valid and we uphold the same.
12. In the light of the discussion made above, the impugned order in appeal No. 58/02-C stands modified as discussed above and the matter is sent back to the adjudicating authority for deciding the issue of brand name and thereafter the duty as well as penalty liability of the assessees/manufacturers, afresh after hearing both the sides. But appeal No. E/188/2003 filed by the Revenue is dismissed and the impugned order to the extent to which it has been challenged therein is upheld.
13. The appeals are disposed of in the above terms.