Tribunal reclassifies Inca Inchi Oil capsules as "Extra Virgin Vegetable Oil"

The Tribunal allowed the appeal, setting aside the Order-in-Appeal that classified Inca Inchi Oil in soft vegetarian Gel Capsules under CTH 3004 as P or P medicines. The Tribunal determined that the product should be classified under CETH 15159091 as "Extra Virgin Vegetable Oil," based on its natural properties and intended use as a vegetarian product without medicinal purposes. The decision emphasized that the product description, lack of testing by Drugs Control authorities, and clear labeling for non-medicinal use supported this classification, distinguishing it from previous cases involving manufactured goods with therapeutic value.

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Issues:
Classification of Inca Inchi Oil in soft vegetarian Gel Capsules under CTH 3004 as P or P medicines versus classification under CETH 15159091 as "Extra Virgin Vegetable Oil."

Analysis:
The judgment involves an appeal against the Order-in-Appeal passed by the Commissioner of Customs (Appeals) upholding the classification of Inca Inchi Oil in soft vegetarian Gel Capsules under CTH 3004 as P or P medicines. The appellant claimed that the product should be classified under CETH 15159091 as "Extra Virgin Vegetable Oil." The appellant argued that the product, extracted from the Inca Inchi tree, contains natural vitamins and antioxidants, is not chemically modified, and is not intended for medicinal use. The product, encapsulated in 500 Mg capsules, is 100% vegetarian and has been certified by the Food Safety and Standards Authority of India. The appellant contended that the product should not be classified as a medicament under CTH 3004 based on the product description and natural properties. The appellant relied on a previous Tribunal decision to support their argument.

The Revenue, represented by the Additional Commissioner, maintained that the product should be classified under CTH 3003 as medicine based on the product literature claiming properties such as preventing blood clotting and regulating blood sugar. The Revenue cited a Supreme Court decision to support their position that products with therapeutic and prophylactic value fall under the category of medicaments.

The Tribunal carefully considered both sides' submissions and found that the product description and natural properties of the Inca Inchi Oil did not support its classification as a medicament under CTH 3004. The Tribunal noted that the product was not tested by Drugs Control authorities and that the packaging clearly stated it was not for medicinal use. Drawing parallels to a previous case involving encapsulated oils, the Tribunal concluded that the product should be classified under CETH 15159091 as "Extra Virgin Vegetable Oil." The Tribunal distinguished the Revenue's cited case, stating it involved manufactured goods, unlike the naturally occurring substance in question. Consequently, the appeal was allowed, and the impugned order was set aside, with the stay petition also disposed of.

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