Medicament classification prevails over food-preparation entry where products are therapeutically used and commonly prescribed, securing exemption.

Products such as DSN capsules and Beneficiale Liquid were held classifiable under Tariff Heading 3004 as medicaments, not under Tariff Heading 2106 as food preparations, because common parlance, medical prescription, and their therapeutic or prophylactic use showed they were used for treatment and immunity support. The Tribunal applied the common parlance test, the primary use test, and the principle that a specific medicament entry prevails over a residuary food-preparation entry. On that classification, the goods fell within the scope of Notification No. 49/2003-CE, so exemption was available and the denial of exemption could not stand. The related demand, interest, and penalty were not sustainable.

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Issues: (i) Whether the products, namely DSN capsules and Beneficiale Liquid, were classifiable under Tariff Heading 3004 as medicaments or under Tariff Heading 2106 as food preparations; (ii) whether, on such classification, the assessee was entitled to exemption under Notification No. 49/2003-CE.

Issue (i): Whether the products, namely DSN capsules and Beneficiale Liquid, were classifiable under Tariff Heading 3004 as medicaments or under Tariff Heading 2106 as food preparations.

Analysis: The products were found by the departmental test report to contain vitamins and minerals and to be preparations needed by the body to remain healthy, but the Tribunal held that classification could not rest on that report alone. The decisive consideration was whether the goods were understood in common parlance and by medical practitioners as products used for cure or prevention. The record showed that the products were regularly prescribed by doctors for treatment of ailments and to boost immunity. Applying the common parlance test, the primary use test, and the settled principle that products with therapeutic or prophylactic attributes fall within Chapter 30, the Tribunal held that Chapter Heading 2106, being residuary, could not prevail over the specific medicament entry.

Conclusion: The products were classifiable under Tariff Heading 3004 and not under Tariff Heading 2106, in favour of the assessee.

Issue (ii): Whether, on such classification, the assessee was entitled to exemption under Notification No. 49/2003-CE.

Analysis: Once the goods were held to fall under Tariff Heading 3004, they answered the description of exempted goods under the notification. The finding of the lower authority denying exemption was therefore unsustainable.

Conclusion: The assessee was entitled to the exemption under Notification No. 49/2003-CE, in favour of the assessee.

Final Conclusion: The demand, interest, and penalty based on classification under Tariff Heading 2106 could not be sustained, and the assessee succeeded on both classification and exemption.

Ratio Decidendi: Where a product has therapeutic or prophylactic use and is understood in common parlance as a medicament, it must be classified under the specific medicament entry rather than a residuary food-preparation entry; exemption linked to that classification follows accordingly.

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