TaxTMI 
TaxTMI 
2009 (10) TMI 132
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....in combination with Isoniazid is called 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 Ex....
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....availed cenvat credit on the inputs. Further, he also held that appellants were not eligible to clear the goods to UN Organisations under Notification No. 108/95-C.E., since the goods were unconditionally exempted. Therefore, he held that the appellants were required 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 und....
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....t and not of the individual exempt formulation in the kit. (xv) The respondents erred in relying upon the decision in the case of Lupin Laboratories Limited reported in 2002 (139) E.L.T. 366. (xvi) Respondents failed to appreciate that in the case of Lupin Laboratories Limited, it was paying 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. ....
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....nly of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. Accordingly, I find that Isoniazid, Rifampicin, Pyrazinamide, Ethambutol, Dapsone and Clofazamine 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 tha....
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....t in Lupin Laboratories case the tablets/capsules were first packed into separate packing and thereafter different such packs were put into packing in respect of which dispute arose. Para 5 and 6 of the decision are relevant and reproduced below:- "5. The Assistant Commissioner and the Commissioners (Appeals) both have 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 ....
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....o uphold the finding of the Commissioner (Appeals) that a new product has emerged which was not entitled to benefit of either of the notification." 7.6 The observation of the Tribunal that if the logic adopted in this case were adopted every manufacturer of pharmaceutical products, has to pay the duty twice. This observation 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 th....
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....e Notification No. 108/95-C.E., relating to clearances to UN Organization. 8.2 Serial No. 59 of the Notification No. 4/2006-C.E., dated l-3-2006, inter alia exempts formulations manufactured from the bulk drugs specified in the list-1 thereto. The relevant serial No. and list read as follows:- 59. 30 Formulations manufactured 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....