TaxTMI 
TaxTMI 
TaxTMI 
2009 (10) TMI 132
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.... Remactzid 2FDC and when it is sold in combination with Isoniazid, Pyrazinamide and Ethambutol, it is called as Rimstar 4 FDC. Clofazamine was also sold individually as "Lamprene". 2. The dispute in this case pertains to following formulations cleared by them in Multy Drug Therapy (MDT) combi pack, as follows:- Sr. No Formulations Rimactane (Rifampicin) Lamprene (Clofazamine) Dapsone (i) MB CHILD 1 Capsule of 300 mg 3 Capsule of 50mg 28 Tablets of 50mg 1 Capsule of 150mg 13 Capsule of 50 mg (ii) MB ADULT 2 Capsule of 300mg 3 Capsule of 100mg 28 Tablets of 100mg 27 Capsule of 50 mg (iii) PB CHILD 1 Capsule of 300mg 28 Tablets of 50mg 1 Capsule of 150mg (iv) PB ADULT 2 Capsule of 300mg 28 Tablets of 100mg MB Child and MB Adult are meant for the treatment of Multibacilliary Leprosy, whereas PB Child and PB Adult are for the treatment of Paucibacilliary Leprosy. 3. Chapter heading 30.04 of the First Schedule to the Central Excise Tariff Act, 1985 is relevant for the purpose of this case. Antitubercular Drugs, Antileprotic Drugs, Antimalarial Drugs Sr....
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....ired to maintain separate accounts since the exclusion provided in terms of Rule 6(6) of the Cenvat Credit Rules, 2004 from the provisions of sub-Rule 1 to 4 of Rule 6 have no application in respect of the appellants. 6. Two orders have been passed against the appellants. In Order in Original No. 12/MS-12/2008/Thane-1, dated 17-6-2008, duty demand of Rs. 1,65,45,396/- with interest as applicable was confirmed and penalty of equal to the duty demanded was imposed on the appellants. In the second impugned order No. 01/MS-01/Th-I/09 dated 23-3-2009, duty demand of Rs. 1,95,55,143/- with interest as applicable was confirmed and penalty of equal amount was imposed. Appellants are in appeal against both the orders. 7.1 Learned advocate on behalf of the appellants submitted that the classification adopted by them is correct and the following points were submitted in support of his contention:- (i) Products under dispute admittedly sold as anti-leprosy kits/anti tubercular drugs, which contain the combination of Dapsone, Clofazamine and Rifampicin and only when all this products are put together and taken together the leprosy/tuberculosis can be treated. The formula prescrib....
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....proportionate duty on Rifampicin and entire pack was not treated as exempt. In any event, this Hon'ble Tribunal in the case of Nestle India Limited reported in 2004 (169) E.L.T. 315 (Tri.-Del.) distinguish the order in the case of Lupin Laboratories Limited, and held that even process of intermixing the vitamins, - which were otherwise marketable amounts to manufacture. (xvii) In any event, the product of Chapter heading 30.04, is specified under Schedule 3 and therefore, even packing of the tablets together will amount to manufacture. 7.2 Learned Jt. CDR on behalf of the Revenue submitted that merely by placing two capsules of Rifampicin at the top of so called blister packs which also consisted of thirty capsules of Clofazamine and twenty eight tablets of Dapsone for M.B. Adult, sixteen capsules of Clofazamine and twenty eight tablets of Dapsone for M.B. Child and in case of P.B. Adult and O.B. Child with twenty eight tablets of Dapsone, duty cannot be discharged on the entire product. Since each of the product was marketable on its own putting them altogether did not confer on them any attribute of marketability that it did not posses earlier. Each of the tablets continued to ....
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....are specifically covered under the aforesaid sub-headings when specific sub-headings are available and which are more appropriate, the question of classifying these goods under "other anti-tubercular drugs" or "other antileprotic drugs" does not arise and hence all the products except "Rifampicin" attracts Nil rate of duty vide Notification No. 4/2006-C.E., dated 1-3-2006. 21. Further, I find that in the case of M/s. Lupin Laboratories Limited v. Joint Commissioner of Customs & Central Excise, Aurangabad - 2002 (139) E.L.T. 366 (Tri.-Mumbai) wherein similar issue was involved, Hon'ble Tribunal has observed that "since each of the products was marketable on its own putting them all together did not confer on them any attribute of marketability that it did not possess earlier. Each of tablets continued to have a separate identity, which was not submerged in the new identity that the assembling of combination of tablets acquired. Such a combination did not in fact require any identity. It was, very simple, a matter of convenience for the customer." "It is also relevant to note that these four or three tablets were initially packed, after their manufacture into this combination packi....
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....ve explained how the processes that the appellant undertook amounted to "any other treatment to render the product marketable to the consumer, and therefore amounts to manufacture". The Commissioner (Appeals) accepts explicitly, that each of the products, prior to its being packed in the manner that we have explained, was marketable. He says "while it is not denied that tablets/capsules manufactured by them are separately marketable and marketed, but by putting them in one pack, all the four tablets become marketable at one and the same time together". This logic is specious. If each of these drugs was earlier marketable considered on its own, they were all marketable at one time. The products which were earlier not marketable do not now become marketable. In its decision in Lakme Lever Ltd. v. CCE [2001 (127) E..L.T. 790], the Tribunal had considered the nature and scope of Note 4 of Chapter 43 of the Tariff, relating to cosmetic products of heading 33.03, 33.04 and 33.05. The note is identically worded as Note 5 of Chapter 30. The Tribunal came to the conclusion that "any other treatment" referred to in that note must result in conferring upon the product which emerges any attrib....
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....ion itself shows that tablets were packed and different packs were put in a separate package as a kit. In this case this is not the situation. Different types of tablets/capsules in loose condition have been packed in a combined Blister pack. There was no packing process in respect of individual tablets earlier. It is not the case of Revenue that the tablets which were received in bulk by the appellants by way of import and by local purchases were in a condition to be considered as marketable to retail customers. In the case of P or P medicaments, the duty is charged on the basis of MRP and when the duty is charged on MRP, what is required to be considered is marketability at the retail stage. No evidence has been put forth by the Revenue to show that these tablets are being marketed in loose condition in retail market. It is also not the case of Revenue that the appellants have combined different types of packages into a kit. In fact all the tablets/capsules required by a patient for a month is available in one blister pack. If the stand of Revenue in this case is accepted, no medicine packed in blister pack will be chargeable to excise duty since tablets/capsules in loose conditi....
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....d from the bulk drugs specified in List 1. Nil - Explanation. - For the purposes of this notification, the expression "formulation" means medicaments processed out of or containing one or more bulk drugs, with or without the use of any pharmaceuticals aids (such as diluent, disintegrating agents, moistening agent, lubricant, buffering agent, stabliser or preserver) which are therapeutically inert and do not interfere with therapeutical or prophylactic activity of the drugs, for internal or external use, or in the diagnosis, treatment, mitigation or prevention of disease in human beings or animals, but shall not include any substance to which the provisions of the Drugs and Cosmetics Act, 1940 (23 of 1940) do not apply. List 1 (1) Streptomycin (2) Isoniazid (3) Thiacetazone (4) Ethambutol (5) PAS (6) Pyrazinamide (7) Dapsone (8) Clofazamine (9) Tetracycline Hydrochloride (10) Pilocarpine (11) Hydrocortisone (12) Idoxuridine (13) Acetazolamide (14) Atropine (15) Homatropm (16) Chloroquine (17) Amodiaquine (18) Quinine (19) Pyrimethamine (20) Sulfamethoryrezine (21) Diethyl Carbamazine (22) Arteether or formulation of artemisinin. 8.3 As sub....