TaxTMI 
TaxTMI 
2024 (6) TMI 174
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Excise Tariff Act, 1985 and cleared the same without payment of Central Excise duty by misleading that the product does not have therapeutic value, whereas the product appears to be hepatoprotective, which protects liver against ill effects of aflatoxins, anthelmintics, liver stimulant-helping in regeneration of liver cells, improves Food Conversion Ratio (FCR) and is a performance enhancer. The appellant also manufactured and cleared 'LIV 52 Vet liquid', which is also similar in content and usage classifying under Chapter 3004 as Ayurvedic P or P Medicine on payment of appropriate duty. The dosage of 'LIV 52 Protec' and 'LIV 52 Vet liquid' in poultry per 100 birds is the same as under; Poultry Dosage for 'Liv 52 Protec' Dosage for 'Liv 52 Vet Liquid' Chicks 5 ml per day 5 ml per day Growers 10 ml per day 10 ml per day Layers/Broilers 20 ml per day 20 ml per day 2.1 The product 'LIV 52 Protec', which is cleared without payment of duty is used for hepatic disorders and is hepato-protective like the other product 'LIV 52 Vet Liquid', which is cleared on payment of duty. 2.2 Since both 'LIV 52 Protec' and 'LIV 52 Vet Liquid' are used for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed product, quantitatively it may vary. ii. The formulation has hepato-protective properties. iii. Indicating the exact composition is difficult after mixing as set of herbal material. The geological and ecological factors will influence the composition of the ingredients in the herb. Use of each of the ingredients in traditional medicines is also provided. iv. When the raw material samples and products were analysed by Herboprint, it is observed that the ingredients and the product "Liv 52 Protec" have hepato-protective properties along with other herbal therapeutic properties. v. The powder analysis of the samples shows the presence of some cell structure. 2.4 In view of the above the therapeutic value of the product 'LIV 52 Protec' has been confirmed in the analysis, therefore it appeared that the product is not Poultry/animal feed to merit classification under Chapter 23 but actually a Veterinary Medicine or Ayurvedic Medicine falling under Chapter 30. 2.5 Further, as per Section VI of the HSN, the explanatory Note in respect of Chapter Sub-heading 30.03 states, "medicaments" (excluding goods of heading No. 30.02, 30.05 or 30.06 consist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dients and the chemical analysis report of the Indian Institute of Chemical Technology, the therapeutic property/utility of the said product is confirmed. Therefore, the product "Liv 52 Protec" was not an "Animal Feed Supplement" to merit classification under Chapter 23 but actually a veterinary medicine of Ayurvedic base and merit classification under Chapter 30 of Central Excise Tariff Act, 1985. 3.1 Further, from the product literature it also appeared that the ingredients used in the product have therapeutic functions and are also prescribed as Ayurvedic Medicine in the formulations. 3.2 Further, the appellant has also manufactured and cleared the product "Liv 52 Vet Liquid", classifying the same under Chapter 30 of CETA, 1985 and on payment of appropriate Central Excise duty whereas on the other hand classified the product "Liv 52 Protec" under Chapter 23 of CETA, 1985. Further, comparing the above two products, the usage, ingredients of the products etc., are the same in all respects and both the said products have therapeutic value. 3.3 Further, it was alleged that the appellant has wilfully misstated the facts and wilfully classified the products as 'Animal feed su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heading covers medicinal preparations obtained by mixing two or more substances. However, if they are put up in measured doses or in forms or packing for retail sale, they fall in heading 30.04. Therefore, the explanatory notes to chapter heading 30.03 are squarely applicable to heading 30.04 as well, which amongst other things states at point 5 and 6 as under: 5) Medicinal compound vegetable extracts including those obtained by treating a mixture of plants. 6) Medicinal mixtures of the plants or parts of plants of heading 12.11 Further the explanatory notes to the heading 30.04 in the foot note excludes food supplements containing vitamins or mineral salts, which are put up for the purpose of maintaining health or well being but have no indication as to use for the prevention or treatment of any disease or ailment. c) In this case 'Liv 52 Protec', apart from optimizing the utilization of animal feed ingredients, mainly protects the liver and helps counter hepatic damage thereby clearly indicating its use for prevention or treatment of liver diseases or ailments. Therefore, the product does not merit classification under CSH 2302 for the period u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as preparation used in animal feeding. The appellant has failed to bring to the notice of the Department that the materials used in the preparation of 'Liv 52 Protec' have therapeutic properties. It was only when the samples of the product were sent for testing to the Indian Institute of Chemical Technology, Hyderabad, it came to light that the product has hepato protective properties along with other therapeutic properties. Further, the appellant has also failed to bring to the notice of the Department that the impugned product is the same as 'Liv 52 Vet Liquid', which is manufactured and cleared on payment of duty under Chapter 3004 of the CETA. Further, although audits were conducted by the AG's audit party, there is nothing on record to evidence that the nature and use of 'Liv 52 Protec' was brought to the notice of the Department during the audit. Reliance is placed on the decision of Tribunal in the case of Agrico Engineering Works (India) Pvt. Ltd. Vs. CCE, Meerut -2000 (122) ELT 891 (Tribunal), wherein it was held that "the purpose of visit of excise officers was limited and there is nothing on record to show that the revenue authority pointed out this fact to the appellant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....In the present case, the department has not brought any such evidences or certificates and hence, based on the above said decision, the department has failed to bring evidence to classify the product under Chapter 30 and hence the product should be classified under Chapter 23 of CETA. f. Further the following statement is given in the packing: "Herbal veterinary preparation. Not for human use. Not for medicinal use". g. The show-cause notice has ignored the above declaration printed in the packing, in the literature, etc. The product itself shows very clearly that the same is not for medicinal use and the same is herbal veterinary preparation. It further declares Animal Feed Supplement on the principal display panel of the label. Further, the literature does not contain a single word of therapeutic claim of the product. The product is clearly a hepatic stimulant and growth supporter. h. As per the decision in the case of Dabur India Limited Vs. CCE-2005 (182) ELT 290 (SC) and various Circulars of the Department, the following requirements have to be fulfilled to classify a product under medicament: i. There must be drug license to manufa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wing averments; the certificate furnished by the Indian Institute of Chemical Technology, Hyderabad states that as per the hebro print test, Liv 52 Protec contents, possess therapeutic attributes; the appellant's contention that the therapeutic efficacy study has not been done hence the report is not complete is devoid of any merit. Moreso when the appellant themselves have not adduced any proof of efficacy study that 'Liv 52 Protec' does not have any therapeutic and prophylactic attributes; the argument of the appellant that if 'Liv 52 Protec' has to qualify as Ayurvedic medicament, the regulatory authority invariably would make them take the drug licence in compliance of the extant drug laws enforced by Government of Karnataka is not relevant to classification of goods; 'Liv 52 Protec' is manufactured using herbs i) Sarapunkha (ii) Bhumyaamlaki (iii) Arjuna (iv) Yavtika (v) Kakamachi (vi) Nimba (vii) Punarnava (viii) Bhringaraja; an expert casually certifying stating that 'Liv 52 Protec' is a food supplement and also known in the market as animal food cannot be the basis to classify 'Liv 52 Protec' as non-ayurvedic medicine; the argument that 'Liv 52 Protec' is used only to stren....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l its ingredients are mentioned in the books of Ayurvedic medicines. It has also been observed that the aforesaid two tests have been upheld by the Hon'ble Supreme Court in the case of M/s. Richardson Hindustan; hence any preparations containing herbs and shrubs, the main ingredients of Ayurveda to qualify as Ayurvedic medicaments, they should be mentioned in the authoritative books of Ayurvedic medicines, the appellant has admitted that 'Liv 52 Protec' has presence of eight ingredients all of which undisputedly have a mention in the authoritative books of Ayurvedic medicine. Hence, the first test to qualify as Ayurvedic medicine is fulfilled. The appellant on his own volition has accepted that there are five herbs (i) Bhumyaamlaki- Treatment of liver diseases (ii) Arjuna-Emaciation & Chronic Thrombosis); (3) Kakamachi - Treatment of Skin Diseases (iv) Punarnava - Treatment of Diuretic (5) Bhringaraja - Treatment of intestinal worm, all undisputedly present in the formulation prepared/manufactured by the appellant-company and sold in the market under the brand name 'Liv 52 Vet', which is admittedly classified under CSH 3004 as Ayurvedic P or P medicines and cleared on payment of ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
...."of Ayurvedic systems". 10. In this regard it is pertinent to examine the following terminology/ definitions; a. Medicaments- A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy (Pharmacotherapy) is an important part of the medical field and relies on the science of pharmacology for continual advancement and on pharmacy for appropriate management. Drugs are classified in many ways. One of the key divisions is by level of control, which distinguishes prescription drugs (those that a pharmacist dispenses only on the order of a physician, from overthe- counter drugs those that consumers can order for themselves). Another key distinction is between traditional small molecule drugs, usually derived from chemical synthesis, and biopharmaceuticals, which include recombinant proteins, vaccines, blood products used therapeutically, gene therapy, monoclonal antibodies and cell therapy (for instance, stem cell therapies). Other ways to classify medicines are by mode of action, route of administration, biological system affected, or therapeutic effects. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut does not treat any existing or pre-existing diseases or symptoms. 12. The appellant submits that their product 'Liv52 Protec' is not a medicament but an animal feed supplement and it does not have therapeutic or prophylactic properties. A food supplement gives nutrition in the form of carbohydrates, proteins, vitamins, minerals, Trace minerals etc. The major herbs in 'Liv 52 Protec' are Andrographis paniculata (Yavtika) enhances the body's resistance against common infections by stimulating the production of antibodies. It also acts as a hepato-protective that helps prevent liver damage. Phyllanthus amarus (Bhumyaamalaki) is a rich antioxidant, which is effective in the treatment of infective hepatitis. It contains wedelolactone and dimethyl wedelolactone and stimulates the secretion of digestive enzymes. It eliminates toxins and aids in the regeneration of hepatopancreas. The herbal ingredients in the impugned product also have similar hepatoprotective properties. We find that 'Liv 52 Protec' liquid stabilizes the hepatic cell membrane and promotes regeneration of the liver and also protects the liver from toxins, drugs and chemicals. Liv 52 Protec, is an appetite stimulant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y in animals, birds, aqua, etc. Therefore, the goods which are cleared by the appellant namely 'Liv 52 Protec' are in the category of medicaments/drugs classifiable under Chapter 30 of Central Excise Tariff Act, 1985. 16. The appellant has contended that for an item to be classified under Chapter 30, it is required to have a Drug licence from the competent authority. We find that as regards the classification under Central Excise Tariff Act, 1985 the item, has to be classified only as per its functionality/properties under the appropriate Chapter Heading/sub heading/Tariff item. The requirement of any licence or otherwise would come subsequently and it has no bearing on the classification under the Central Excise Tariff Act, 1985. 17. In this case, the appellant is manufacturing a similar product 'Liv 52 Vet' and classifying the same under Chapter Heading 30 as an 'Ayurvedic medicament' and paying the appropriate duty. However, 'Liv 52 Protec' is branded and marketed as animal feed supplement. Animal feed supplements are mixtures that are added either to animal feed or fed directly to animals to provide extra nutrients such as vitamins and minerals. The impugned product 'Liv ....