Tariff classification and natural justice: medicinal vitamin preparations were not food supplements, and denial of hearing made the orders unsustainable.

Undefined tariff expressions must be read in their common and commercial sense: medicinal and vitamin preparations sold as drugs, prescribed as pharmaceutical products, and governed by the Drugs and Cosmetics Rules were treated as patent and proprietary medicaments, not as food supplements under Heading 2108.99. The products also did not fit the Heading 21.06 description of food preparations with vitamins as secondary ingredients, so exclusion from Chapter 30 was not justified. Separate classification orders were unsustainable because denial of personal hearing breached natural justice, and no recognised exception was shown.

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Issues: (i) whether the impugned medicinal and vitamin preparations were classifiable under Heading 2108.99 as edible preparations or under Chapter 30 as patent and proprietary medicaments; (ii) whether the orders of classification could be sustained despite denial of personal hearing.

Issue (i): whether the impugned medicinal and vitamin preparations were classifiable under Heading 2108.99 as edible preparations or under Chapter 30 as patent and proprietary medicaments.

Analysis: The expression "food supplements" was not defined, and for tariff classification the term had to be understood in its common and commercial sense. The preparations were understood in trade as drugs and pharmaceutical products, were sold on prescription, and were governed by the Drugs and Cosmetics Rules, including the standards for patent and proprietary medicines containing vitamins. The Explanatory Notes to Heading 21.06 contemplated preparations based on extracts from plants, fruit concentrates, honey or fructose, with vitamins added as secondary ingredients. The impugned products did not answer that description and were not food or food preparations so as to fall within Section IV exclusion from Chapter 30. The rejection of the earlier case law on the sole ground that ingredients were not printed was also not a valid basis for classifying the goods under Heading 2108.99.

Conclusion: The impugned products were not classifiable under Heading 2108.99 and were not liable to be excluded from Chapter 30 on the footing that they were food supplements.

Issue (ii): whether the orders of classification could be sustained despite denial of personal hearing.

Analysis: The right of hearing was treated as an essential component of natural justice and not a matter of discretion. The fact that similar matters had been heard earlier did not justify dispensing with hearing in the present proceedings. Orders passed in breach of that right could not be sustained in the absence of any legally recognized exception.

Conclusion: The impugned orders were vitiated for breach of natural justice.

Final Conclusion: The classification orders placing the goods under Heading 2108.99 could not be sustained and were set aside, resulting in relief to the assessee.

Ratio Decidendi: For tariff classification, an undefined expression must be construed in its common and commercial sense; preparations that are not food or food supplements in that sense cannot be forced into a food-preparations heading, and an order passed by denying the assessee a hearing is unsustainable for breach of natural justice.

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