Classification of calcium gluconate and limitation on remand: organic chemical heading upheld, but extended period and penalty were barred.

Calcium gluconate IP was held classifiable under Heading 2918.00 as an organic chemical, not under Heading 3003.30 as a medicament, because the product corresponded to the same calcium gluconate considered in earlier decisions and the available materials and market understanding supported chemical classification. On limitation, the extended period could not be invoked where the demand had earlier been confined to the normal period and that limitation had not been challenged on appeal. The adjudicating authority on remand was therefore not permitted to enlarge the demand or impose penalty beyond the scope of the remand, leaving only normal-period duty liability with applicable interest.

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Issues: (i) Whether calcium gluconate IP manufactured by the assessee was classifiable under Heading 3003.30 as a medicament or under Heading 2918.00 as an organic chemical. (ii) Whether the extended period of limitation and penalty could be sustained.

Issue (i): Whether calcium gluconate IP manufactured by the assessee was classifiable under Heading 3003.30 as a medicament or under Heading 2918.00 as an organic chemical.

Analysis: The product was held to fall under Heading 2918.00. The assessee's own case proceeded on the basis that the product was covered by Note 2(i)(a) of Chapter 30, but the product was found to be the same calcium gluconate considered in earlier decisions and to be classifiable as an organic chemical. The rival materials and the accepted market understanding of the product supported classification under Heading 2918.00 rather than as a medicament under Chapter 30.

Conclusion: The classification under Heading 2918.00 was upheld and the claim for classification under Heading 3003.30 was rejected.

Issue (ii): Whether the extended period of limitation and penalty could be sustained.

Analysis: The demand had earlier been confined to the normal period under Section 11A of the Central Excise Act, 1944, and the department had not challenged that limitation. The adjudicating authority, on remand, could not enlarge the demand by invoking the extended period or impose penalty beyond the scope of the remand.

Conclusion: The extended period of limitation and the penalty were set aside, and the demand was confined to the normal period under Section 11A of the Central Excise Act, 1944 with interest under Section 11AB of the Central Excise Act, 1944.

Final Conclusion: The product was held classifiable under Heading 2918.00, but the assessee was granted relief against the extended-period demand and penalty, leaving only the normal-period duty liability with applicable interest.

Ratio Decidendi: Where the appellate remand does not reopen the department's failure to challenge limitation, the adjudicating authority cannot enhance the demand by invoking the extended period or impose penalty beyond the scope of the remand.

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