2004 (4) TMI 77 - SC - Central Excise

Court reclassifies products as medicaments under Tariff Item 3003.10, overturning initial classification.

ICPA HEALTH PRODUCTS (P) LTD. Versus COMMISSIONER OF C. EX., VADODARA

The court set aside the decision to classify the products under Tariff Item 38.08, ruling in favor of categorizing them under Tariff Item 3003.10 as ... Classification of goods - Classification under Tariff Item 3003.10 or under Tariff Item 38.08 - Held that:- if a product comprises of two or more constituents which have been mixed together for therapeutic or prophylactic uses, then it would be a medicament. As stated above, the Appellants' products were examined by the Chemical Examiner who has opined that these products have therapeutic properties. Also admittedly these products are used for disinfecting the skin prior to surgery. As per Concise Oxford Dictionary, 9th Edition, the term 'prophylactic' would mean 'intending to prevent diseases, a preventive medicine or course of action'. It is clear that the Appellants' products are used as a cleanser for cleaning of wounds and abrasions and minor cuts and to disinfect the skin prior to surgery. They therefore also have prophylactic uses. As the products have therapeutic properties and prophylactic uses they are Medicament falling under Chapter 30. As they fall under Chapter 30 by virtue of Note 1(c) to Chapter 38, they do not fall within Chapter 38. It will therefore have to be held that the products cannot be classified under Tariff Item 38.08. In this view of the matter, the impugned Judgment cannot be sustained and is accordingly set aside. It is held that the Appellants' products will be classifiable under Tariff Item 3003.10 - Decided in favour of assessee. Issues: Classification of products under Tariff Item 38.08 or 3003.10Analysis:1. Facts Overview: The appellants manufactured products like Hexiprep, Hexiscrub, and Haxiaque, which were classified under Tariff Item 3003.10 and duty paid under Notification No. 29/88-C.E. They received show cause notices proposing classification under Tariff Item 38.08, which was upheld by the Adjudicating Authority and CEGAT.2. Chemical Examiner's Opinion: The Chemical Examiner determined that the products contained chlorhexdine gluconate solution BP with therapeutic properties, used as disinfectants, falling under Tariff Entry 38.08.3. Product Descriptions: The products were labeled as 'superior surgical microbicidal solution,' used for skin disinfection before surgery, wound disinfection, and rapid hand disinfection for surgeons.4. Tariff Items Comparison: Tariff Item 3003.10 covered patent or proprietary medicaments, while Tariff Item 38.08 encompassed disinfectants and similar products. The Chapter Notes clarified that Chapter 38 did not apply to 'Medicaments,' defined as products mixed for therapeutic or prophylactic uses.5. Legal Interpretation: The Chemical Examiner's opinion on the products' therapeutic properties and prophylactic uses aligned with the definition of 'Medicaments' under Chapter 30, excluding them from Chapter 38. The products were deemed as falling under Tariff Item 3003.10 based on their therapeutic and prophylactic characteristics.6. Judgment Outcome: The impugned judgment was set aside, classifying the appellants' products under Tariff Item 3003.10. The appeals were allowed with no order as to costs.This detailed analysis highlights the classification dispute resolved in favor of categorizing the products as medicaments under Tariff Item 3003.10 due to their therapeutic and prophylactic properties, as per the legal interpretation provided based on relevant tariff items and definitions.