1998 (7) TMI 631 - AT - Central Excise

Classification of Piperazine Hydrate Liquid under Central Excise Tariff Act

The appeal involved the classification of Piperazine Hydrate Liquid under Chapter sub-heading 3003.20 of the Central Excise Tariff Act. The majority view ... Medicines - Piperazine Hydrate Liquid Issues Involved:1. Classification of Piperazine Hydrate Liquid.2. Interpretation of Chapter Note 2(ii) of Chapter 30 of the Central Excise Tariff Act, 1985 (CETA).3. Compliance with Drugs and Cosmetics Rules, 1986.4. Distinction between house mark and product mark.Issue-wise Detailed Analysis:1. Classification of Piperazine Hydrate Liquid:The primary issue in this appeal was whether Piperazine Hydrate Liquid manufactured by the appellants could be classified as a patent and proprietary medicine under Chapter Note 2(ii) of Chapter 30 of CETA. The appellants argued that their product was a patent and proprietary medicament because it was specified in the British Pharmacopoeia and complied with the necessary labeling rules. The Department contended that the product bore a brand name due to the prominent display of the manufacturer's name, thereby excluding it from being classified under Chapter Note 2(ii).2. Interpretation of Chapter Note 2(ii) of Chapter 30 of CETA:Chapter Note 2(ii) defines 'patent or proprietary medicaments' as any drug or medicinal preparation used for treatment or prevention of ailments in humans or animals, bearing a name not specified in a recognized pharmacopoeia or a brand name. The appellants contended that their product was listed in the British Pharmacopoeia, and the labeling was in compliance with the statutory requirements. The Department argued that the prominent display of the manufacturer's name and logo indicated a brand name, thus disqualifying it from being classified under Chapter Note 2(ii).3. Compliance with Drugs and Cosmetics Rules, 1986:The appellants argued that under Rule 96 of the Drugs and Cosmetics Rules, it was mandatory to use the generic name of the drug and mention the manufacturer's name on the label. They contended that the display of their monogram and the name 'Agrivet Farmcare' was in compliance with these rules and did not constitute a brand name. The Tribunal found merit in this argument, noting that the label prominently displayed the generic name 'Piperazine Hydrate' and the manufacturer's details were in smaller print, conforming to the statutory requirements.4. Distinction between House Mark and Product Mark:The Tribunal examined the distinction between a house mark and a product mark, referencing the Supreme Court's judgment in the case of Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise, Chandigarh. It was noted that a house mark is used on all products of a manufacturer and serves as an emblem of the manufacturer, while a product mark or brand name is used to identify a specific product. The Tribunal concluded that the use of the name 'Agrivet Farmcare' and the manufacturer's logo on the label did not constitute a product mark but was a house mark, required under the Drugs and Cosmetics Rules.Separate Judgments:Majority View:The majority view, including the opinion of the third member, held that the product was correctly classifiable under Chapter sub-heading 3003.20. The Tribunal found that the label's display of the manufacturer's name and logo did not amount to using a brand name, thus allowing the appeal and setting aside the impugned order.Dissenting Opinion:The Vice President, however, held a different view, emphasizing that the label indicated a connection between the product and the manufacturer, thereby constituting a brand name. He argued that the product should be classified as a patent and proprietary medicine and rejected the appeal.Final Decision:Based on the majority view, the appeal was allowed, and the product was classified under Chapter sub-heading 3003.20. The Tribunal concluded that the labeling complied with statutory requirements and did not constitute a brand name, thus not disqualifying the product from being classified under Chapter Note 2(ii) of Chapter 30 of CETA.