Customs, Excise and Gold Tribunal - Mumbai
Yatan Pharmaceutical Pvt. Ltd. vs Commr. Of Cus. & C. Ex. on 15 January, 2003
Equivalent citations: 2003(154)ELT250(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. These three appeals are filed by the same appellants, as the issues are the same. These are, therefore, disposed of vide this single order.
2. The appellants manufacture medicaments. They filed the declaration claiming these to be Patent and Proprietary medicines, claiming classification under sub-heading 3003.10. The department was of the opinion that these were generic medicaments classifiable under sub-heading 3003.20 at nil rate of duty. The Assistant Commissioner modified the declaration modifying classifications. In doing so, he relied upon the Supreme Court judgment in the case of Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise, Chandigarh - 1995 (75) E.L.T. 214. The Commissioner (Appeals) upheld this order. He held that all the marks appearing on the medicaments and on the packing were "house marks" and not brand names. Following the same judgment of the Supreme Court, he dismissed the appeal. Appeal No. E/1947/R/97 is filed against this order.
3. In two other orders, passed by the Assistant Commissioner dated 29-2-96 and 28-6-96, Modvat credit of the duty paid on the inputs going into the manufacture of medicaments, which were cleared on payment of duty as P & P medicine was reversed. The Commissioner (Appeals) in both cases upheld these orders against relying upon the ratio of the Supreme Court's judgment (supra). Appeal Nos. E/1948/R-97/Bom and E/1949/R/97/Bom are filed against this reversal.
4. We have heard Shri Mathew, Advocate, for the appellant and Shri Uma Shankar, DR, for the Revenue.
5. Prior to the adoption of the CET based on the international Tariff, Patent and Proprietary medicines fell under Tariff Item No. 14E. Tariff Item No. 68 covered all goods not elsewhere specified. Item No. 14E read as follows :-
"Patent or proprietary medicine not containing alcohol, opium, Indian hemp or other narcotic, drugs or other narcotics other than those medicines which are exclusively ayurvedic, unani, sidha or homoeopathic.
Explanation 1. - "Patent or proprietary medicines' means any drugs or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in, human beings or animals which bears either on itself or on its container or both, a name which is not specified in a monograph in a pharmacopoeia, formulary or other publications notified in this behalf by the Central Government in the Official Gazette or which is a brand name, that is, a name or a registered or any other work, such as a symbol, monograph, label, signature or invented words or any writing which is used in relation to the medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person."
6. This definition had come up for examination by the Allahabad High Court in the case of Ramsey Pharma Pvt. Ltd. v. Superintendent -1983 (12) E.L.T. 78. On examination of the labels on the packing of the medicaments, the Hon'ble High Court observed as under :-
"It is common ground that the medicines in question bear names which are contained in the Indian Pharmacopoeia, that none of them had any brand name and that the petitioner has not got any trade mark registered under the Trade and Merchandise Marks Act, 1958, in respect of any of those medicines. But the crux of the controversy is whether the labels on the bottles of these medicines and the cardboard cartons in which such bottles are packed bear any mark such as a symbol, monogram, invented words or writing indicating connection in the course of trade between those medicines and the person having, either as proprietor or otherwise, the right to use such mark.
The petitioner has produced as Annexure II to its petition a sample label, thereon after the name of the medicine, the ingredients therein the purpose for which it is intended to be used and how it should be administered, the following words are printed.
"Manufactured by Ramsey Pharma Private Ltd, Naini (Allahabad)".
The name "Ramsey" is printed not in block letters but in calligraphic letters. On the left hand bottom corner of the label, is a symbol consisting of a circle within which the name "Ramsey" is printed both vertically and horizontally."
7. The conclusion of the Hon'ble High Court was as follows :-
"Thus the calligraphic types used for the name 'Ramsey' as distinct from the ordinary block letters used for the remaining portion of the name and address of the manufacturer, together with the geometrical design of the circle in which the word 'Ramsey' is printed both vertically and horizontally, constitutes a distinctive design so as to distinguish the medicines manufactured by the petitioner from the medicines manufactured by others. We are unable to accept the contention of Sri Kacker that in order to attract the explanation to Item No. 14E of the First Schedule the distinctiveness must be only in regard to the name of the medicine and not the name of the manufacturer. The relevant portion of the Explanation reads :
"....any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person."
According to the explanation it is sufficient if the mark used in relation to the medicine indicates a connection in the course of trade between such medicine and the manufacturer having a right to use such mark.
Thus we are unable to accept the first ground urged by Sri Kacker, namely that the medicinal preparation in question are not liable to excise duty."
8. The Madras High Court in deciding a similar issue UOI v. Indo French Pharmaceutical Co. - 1983 (12) E.L.T. 725 in similar circumstances arrived at a different interpretation. On examination of the distinguishing marks used by the manufacturer, the Hon'ble Court held as under :-
"It is admitted that the three products manufactured by the respondent are Indian Pharmacopoeia products. In the Explanation, these products will become patent and proprietary medicines only if a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark. In other words, if a manufacturer uses a word, symbol or monogram, apart from a monograph in a pharmacopoeia, formulary or other publications, that could be treated as indicating that the manufacturer has a proprietary interest in the medicine manufactured by him. The symbol used by the respondent cannot be described as a monogram. In the Concise Oxford Dictionary, 6th Edition, the meaning of 'monogram' is given thus - "Two or more letters, especially person's initials, interwoven as device". In view of this meaning of the word 'monogram', the learned Standing Counsel contended that it might be taken to be a symbol and even then these products would become patent or proprietary medicines under Explanation I to Item 14E. We are unable to accept this contention of the learned Standing Counsel. In order to attract the Explanation I to Item 14E, the symbol must indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person. The label itself contains the name of the respondent in full as "Indo-French Manufacturing Co. (P) Ltd., Nanganallur, Madras 61". The symbol, as already stated is a small rectangle with a flame and the words "Indo-French" super added. The symbol by itself cannot be said to be intended to indicate a connection in the course of trade between medicine and the respondent. Further it is so insignificant in appearance compared to the over all size of the label that an ordinary prudent and reasonable man is not likely to draw any connection between the respondent and the medicine in the course of the trade."
9. The Madras High Court judgment was followed by the Tribunal in the case of Astra Pharmaceutical Pvt Ltd. - 1987 (32) E.L.T. 720. The Supreme Court in dealing with the appeal arising out of this order of the Tribunal [1995 (75) E.L.T. 14] approved the ratio laid down by the Madras High Court in preference to that of the Allahabad High Court.
10. The judgment of the Supreme Court is relied upon by both original and appellate authority in the case before us.
11. The goods, which are involved in the controversy and the markings thereupon, are described as follows : -
S. No. Product Description Marking on the product Remarks
1.
Indomethacine Capsules INDOSAM Printed on the Aluminium foil and the outer carton
2. Paracetamol P-500 Embossed on the Tablet
3. Compound Magnesium Trisilicate G Embossed on the Tablet
4. Ampiciline Cloxociline AMPI CLOXA Printed on the capsule
5. Amoxyciline capsule
-
-
6. Cloxaciline Capsule
-
-
12. In the case of item listed in Sl. 5 and 6 there were no markings on the products. The pharmaceutical substances used therein are clearly shown in the pharmacopoeia. It was conceded by the Counsel for the appellants that there could be no dispute that these goods fell under sub-heading No. 3003.20 As regards the item listed at Sl. 3 the wording "G" cannot establish any relationship between the product and the manufacturer and therefore its classification under Heading 3003.20 cannot be disputed.
13. As regards the remaining three products viz., Indosam, P-500 and Ampi Cloxa, the classification would have to be done on in depth analysis of all the marking on the body of the tablets etc. as also the containers to ascertain whether these could be termed as house names or as product names.
14. Unfortunately, neither the original authority nor the appellate authority has discussed the marking appearing on the medicaments or the containers thereof. In the two judgments referred to above, both the High Courts had examined the marking on the medicament and container, before arriving at (albeit divergent) conclusions. The Commissioner (Appeals) has without discussing the markings had declared them to be "house marking" so to bring them in the ambit of the Supreme Court judgment. This has rendered in both orders as non-speaking.
15. We also observe that the order dated 28-3-96 issued on 13-6-96 dealt with the classification of the goods. Any deliberation as to the grant of refund and/or recovery of differential duty could therefore be made only after the decision on the classification. However, the same Assistant Commissioner in his order dated 29-2-96 issued on 29-3-96 proceeded to confirm the duty of Rs. 55,293/- on the grant of reversal of Modvat credit and on the observation that the medicaments were not Patent or Proprietary.
16. We hold that the products Compound Magnesium Trisilicate, Amoxyciline capsules and Cloxociline Capsules merit classification under sub-heading 3003.20. As regards the other products the proceedings are remanded to the jurisdictional Assistant/Deputy Commissioner who shall after allowing the assessees to state merit case, pronounce his findings on the classification. He shall thereafter pass appropriate orders on the reversal of Modvat credit.
17. The appeals are disposed off in these terms.