TaxTMI 
TaxTMI 
2019 (5) TMI 216
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.... department and are engaged in the manufacture of pharmaceutical products and Nutritional Supplement/proprietary food under the brand name 'Beneficiale Liquid' and 'DSN Capsule'. The appellant is clearing their final product at nil rate of duty by availing the benefit of exemption under Notification No. 49/2003-CE dated 10.6.2003, which exempted the clearance of goods from the notified area in the state of Uttarakhand. 3. Acting on the intelligence gathered and developed by officers of DGCEI, Dehradun, regarding that the appellant was not paying the Central Excise duty by claiming and availing the exemption under Notification No. 49/2003, by mis-classifying their product under Excise Tariff Sub-Heading (CETH) under 3003 & 2106 inasmuch as....
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....tted that for the classification of goods the therapeutic and prophylactic values are to be ascertained which is required in the treatment of diseases. The reliance is also placed on the decision of Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Wockhardt Life Sciences Ltd. - 2012 (277) ELT 299 (SC) and Commissioner of Central Excise, Mumbai-IV Vs. Ciens Laboratories, Mumbai - 2013 (295) ELT 3 (SC). These judgement indicated that a product which has curative properties are considered to be of prophylactic values. It is further submitted that the products are being prescribed for the treatment of ailments by the doctors, which for the treatment immune system, loss of memory and malfunction of organs. These products c....
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....". Para 6.8 The Tribunal had in addition to this observation, have examined in detail the report of CRCL and authoritative books on Ayurveda to arrive that conclusion that the products in dispute are not medicine. The Commissioner has ignored these observations of Tribunal and relied only a part observation. Further, there is no such remark on the package of the appellant. 3. Relied on the chapter note to chapter 30 which states that chapter 30 does not apply to food preparation containing only nutritional substances. Para 6.10 & 6.11 Appellant has already substantiated in para 1 and 4 that products in dispute have prophylactic value. They are not only nutritional supplements. 4. Stated that due to following packing the prod....
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....ated as medicine, on account of their prophylactic character. These products cannot be considered as food supplement only on the sole ground of not having precautionary warning on the packaging or is being sold across in the counter. It is submitted that these criteria are not decisive but only indicative of the nature of the product. Learned Advocate also placed reliance on the decision of Hon'ble Apex Court in the case of Commissioner of Central Excise, New Delhi Vs. Connaught Plaza Restaurant (P) Ltd. - 2012 (286) ELT 321 (SC), wherein it is held that the manner in which a product is marketed by the manufacturer does not necessarily play a decisive role in affecting the commercial understating of such product. 4.3 It was also submitted....
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....d the parties and perused the case record. The issue is to be decided in this appeal is regarding classification of the product namely DSN and beneficial as to whether under Chapter 3004 and 2106. The department has drawn the sample and sent for the test to the CRCL, which is authorised Government body, for test of the product, in question. It has been opined by the CRCL as under : "Test Memo No. 02/2016 Report:- On opening the sample packet two samples were found. Out of these are sample is packed in glass bottle kept inside paper cartoon (unit packing) described as "beneficial R Liquid" and registered here as CL-159 (DGCEI)/15.09.16 and second sample is packed in caps kept inside blister strip packing (2 Nos.) bearing described a....