TaxTMI 
TaxTMI 
2019 (8) TMI 855
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....nt and manufacture of generic and IP led niche pharmaceutical products. Also it is registered as a 100% Export Oriented Unit ("EOU") in Karnataka. 3. The Applicant has developed a new product "Narcotic Chewing Tablet" (NCT) which is used to wean off the withdrawal symptoms associated from the narcotic consumption cessation. The applicant further requested, vide their letter dated 28.05.2018, to consider "Narcotic Chewable Tablet" as "Nicotine Polacriliex Lozenge" in their application. In view of the above, the applicant has sought advance ruling in respect of the following question:- What is the appropriate classification of Nicotine Polacriliex Lozenge (hereinafter referred to as "NCT") manufactured by the Company and rate of tax applicable thereupon under Notification 01/2017-Central Tax (Rate), dated 28-06-2017 FACTS OF THE CASE: 4.1 The applicant, vide their application dated 28.04.2018, received in this office on 16.05.2018, submitted that they manufacture and sell a new product Nicotine Polacriliex Lozenge (herein after referred to as "NCT") which is used to wean off the withdrawal symptoms associated from the nicotine consumption ces....
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....ale, including Ayurvedic, Unani, homoeopathic siddha or Bio-chemic systems medicaments, put up for retail sale 12% Schedule III 41 30 Nicotine polacrilex gum 18% 4.6 The Applicant submits that their product is rightly classifiable under the chapter heading 3004, on the basis of the following reasons:- 1. The chapter heading 3004 covers all medicaments which consists of mixed or unmixed products for therapeutic or prophylactic use, put up in measured doses. In the instant case, Nicotine is put up in measured dosage of 2mg / 4mg and results in,- a. providing relief to the patient against tobacco abuse b. safeguard the patient against life harming diseases such as chronic obstructive pulmonary disease, heart disease, diabetes, harms the reproductive system in woman, cancers etc. 2. The product in question, NCT, is a medicament in true sense which has therapeutic uses. 3. The competing entry under chapter heading 30 specifically covers Nicotine Polacrilex gum and in the instant case the product NCT is in the form of "tablet" or "Lozenge" and not in the form of g....
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....lacriliex Lozenge (hereinafter referred to as "NCT") manufactured by the Company and rate of tax applicable thereupon under Notification 01 /2017-Central Tax (Rate), dated 28-06-2017 ? 6.3 The Applicant seeks appropriate classification of their product "NPL" and thereby the applicable rate of GST thereon. Therefore the main issue before us to decide is the classification of the said product. Once the classification is determined, the applicable GST rate shall follow suit. We, therefore proceed to examine the issue of classification of the impugned product. 6.4 The product NPL, in terms of the applicant's submissions, consists of Nicotine as primary ingredient and is mixed with various other ingredients to add color, flavour etc.,; Nicotine is put up in measured dosage of 2mg/4mg in NPL; it provides relief to the patient against tobacco abuse; it safeguards the patient against life harming diseases such as chronic obstructive pulmonary disease, heart disease, diabetes etc., and therefore it is a medicament in true sense having therapeutic uses; it is not a gum as it does not leave any residue when consumed and also it is in the form of tablet or loz....
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....t. But unlike cigarettes, Nicotine Polacrilex Lozenges deliver a lower, steady level of nicotine to the blood of the consumer. When used as directed. Nicotine Polacrilex Lozenges help to regulate, control, and gradually reduce the body's craving for nicotine. The Nicotine Polacrilex Lozenges contain no tar or carbon monoxide, and therefore doesn't present the same medical risks as cigarettes. However, the lozenges still deliver nicotine, the addictive ingredient in cigarettes. 7.3 It could be seen from above that the instant product supplies only nicotine, when administered. The said product is manufactured out of the chemical combination of nicotine and poly acrylic acid. Both the ingredients are organic chemicals. Therefore the product is an organic chemical, which is used to supply the nicotine. In effect the product being administered is nothing but nicotine in measured doses. 7A Explanation (iii) and (iv) appended to the Notification No. 01/2017 Central Tax (Rate), dated 28.06.2017 are relevant to classification of goods. The said explanations arc reproduced below for ease of reference.- (iii) "Tariff item", "sub-heading" "heading" and "Chapt....
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.... (c) Aqueous distillates or aqueous solutions of essential oils and preparations of headings 33.03 to 33.07, even if they have therapeutic or prophylactic properties (Chapter 33) (d) Medicated soaps however they are put up (heading 34.01) (e) Insecticides, disinfectants, etc, of heading 38.08, not put up for internal or external use as medicines (f) Preparations, such as tablets, chewing gum or patches (transdermal systems), intended to assist smokers to stop smoking (heading 21.06 or 38.24) (emphasis supplied by Authority) 7.7 The aforesaid exclusions, whether in the form of Chapter Notes at the beginning of Chapter 30 or exclusions specifically mentioned in the Explanatory Notes to Heading 3004, provide that any preparation intended to assist smokers to stop smoking shall not be covered under the Heading 3004. The use of the words 'such as' indicates that the preparation may be in any form, whether tablets, gums, lozenges or any other form, thereby meaning that if the preparations intend to wean off smokers from smoking then the preparations are either covered under heading 2....