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Commissioner of Central Excise Vs. Core Healthcare Ltd. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Judge
Reported in(2004)(178)ELT490Tri(Mum.)bai
AppellantCommissioner of Central Excise
RespondentCore Healthcare Ltd.
Excerpt:
.....manufactured by the respondents. whereas the assessee has claimed that the said product bears the brand name of the respondents, the revenue has held that the words "core iv" for tabs or "core caps" appearing on the packing of the product cannot be considered as brand name and the same are merely house mark revealing the identity of the manufacturer. as such, by applying the ratio of the hon'ble supreme court's decision in the case of astra pharmaceuticals (p) ltd. v.collector of central excise, chandigarh he has held the goods to be classifiable under heading 3003.20 as against the assessee's claim of classification under heading 3003.10.for better appreciation, we re-produce below the finding of the assistant commissioner : - on examination, i find that the party has simply mentioned.....
Judgment:
1. Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeal. We have heard Shri R.B. Pardeshi, Id. DR appearing for the Revenue and Shri Udhay Joshi, Id. Advocate, appearing for the respondents.

2. As per facts on records, Core Healthcare Ltd., are engaged in the manufacture of pharmaceutical products classifiable under Chapter 30 of the Central Excise Tariff Act, 1985. In their declarations filed under Rule 173-B, the respondents have classified their products, cleared for home consumption under Heading 3003.20 chargeable to nil rate of duty.

However, in respect of the products being exported by them, the classification has been claimed as Patent and Proprietary medicines falling under Heading 3003.10. Accordingly, the respondents cleared the said goods on payment of duty after availing the benefit of Modvat credit.

3. Proceedings were initiated proposing classification of the goods under Chapter 3003.20 attracting nil rate of duty and as consequence, denying the benefit of Modvat credit. The original adjudicating authority held in favour of Revenue and confirmed the demand of duty of Rs. 12,46,830/- and Rs. 4,51,359/-and imposed personal penalty of Rs. 5,000/-. On appeal against the above order, the Commissioner (Appeals) set aside the order of the Assistant Commissioner. Hence, the present appeal.

4. The main dispute in the appeal is the correct classification of the medicaments manufactured by the respondents. Whereas the assessee has claimed that the said product bears the brand name of the respondents, the Revenue has held that the words "Core IV" for tabs or "Core Caps" appearing on the packing of the product cannot be considered as brand name and the same are merely house mark revealing the identity of the manufacturer. As such, by applying the ratio of the Hon'ble Supreme Court's decision in the case of Astra Pharmaceuticals (P) Ltd. v.Collector of Central Excise, Chandigarh he has held the goods to be classifiable under Heading 3003.20 as against the assessee's claim of classification under Heading 3003.10.

For better appreciation, we re-produce below the finding of the Assistant Commissioner : - On examination, I find that the party has simply mentioned some sort of short forms viz., 'CORE IV 'CORE TABS', NS, 5D, 10D' along with the names of the medicaments (as mentioned earlier) which are generic names and defined in Pharmacopia pertaining to Indian, British and United States. One can not get such medicines by calling Core IV, Core Tabs, NS, 5D, or 10D in the market because the medicines as mentioned above are Pharmacopia products and being identified with those names only and not with the invented codes/names generated by the party and claimed to have been their brand names. I am putting some names of the medicines which are being manufactured and cleared by them under their brand names : - (1) CIPROCORE (2) GELEC (3) IMPRODEX (4) HYDROFAST-45, (5) HYDROFAST-33, (6) PLASMEX (7) METROMIDAZOLE. These are the names which are in fact the brand names of the product because these represents the relationship between products and mark.

In other words if someone approaches with these names in the market for the medicines, the person will get these particular medicines which are being manufactured and cleared by M/s. Core Health Care Ltd., only.

Thus I feel that more indication of name and address of the manufacturer on the label or container along with the words "Core-IV", "Core Tabs", NS, 5D and 10D which does not represents the relationship between mark and product of the intravenous fluids manufactured by using "Form fill and seal technology" (and similarly for the other medicines as mentioned above) cannot be treated as "Brand Name" since the Party's name and address and various generated code words (as mentioned have in above) are not the specific symbol monogram, label, signature and invented words used in relation to the medicines being manufactured by the assessee. I also find that the products as mentioned above does not satisfied the condition of Section Note 2(ii) of Chapter 30 of Central Excise Tariff Act, 1985 as the medicaments under question are of generic nature and being sold in the market in their pharmacopia names more mentioning of name and address and some code words viz., NS, 5D, 10D "Core IV", "Core Tabs" only projects the image of the party.

5. As against the above, the Commissioner (Appeals) has observed as under:- I find substantial force in the arguments raised by the appellants that the names like "Core IV", "Core Caps" and "Core Tabs" are the brand names on which they are exporting their goods. It has been held by the Hon'ble Apex Court in the case of Astra Pharmaceuticals (supra) that brand name is one by which the product is identified and asked for. In view of the brand names used on the products by the appellants, the products become PP medicines by virtue of second part of explanation given in Note 2(ii) to Chapter 30 and the product becomes chargeable to duty. However, since the appellants are using the brand names on their product when the same is exported under bond, they are not required to pay duty. Therefore, the provisions of Rule 57C cannot be made applicable in this case and the appellants are not required to reverse the Modvat credit availed by them on the inputs used in the manufacture of exported goods. The finding of the adjudicating authority, that since the appellants are marketing their products by Pharmacopoeial names, it is not necessary to prove that the words like "Core IV" etc. used by them on their products are their brand names, is not correct, inasmuch as the appellants are marketing their products in pharmacopoeial names only in domestic market and not in foreign market. Therefore, it is concluded that the disputed words used by the appellants viz., "Core IV", "Core Caps" "Core Tabs", etc. are their brand names which establishes relationship between the mark and the medicine, and thereby the appellants products are to be classified under CSH 3003.10 of the Schedule to the CETA 85.

6. The labels or the outer container showing the markings have been produced before us. It is seen that the same is shown as Ciprofloxacin Tablets or Ibuprofen and Paracetamol Tablets or Paracetamol Tablets in Bold letters. However, below the said description is the words "Core Tabs" or Corflam is written. Similarly, in respect of the injection, it is seen that the same revealed that they are described by their generic name with Core IV written below it. It is also further noticed that Core IV is written on all the different injection, whether the same is Sodium Chloride Intravenous Infusion or Darrow's Solution or Mannitol Intravenous Infusion BP or any other Glucose Intravenous Infusion BP or any other products. As such, it becomes clear that the Core IV is not the brand name of the respondents. The goods are not being sold by this brand name but by the generic name specified in Pharmacopoeia. The respondents have also not claimed that the brand name is registered under a trade and merchandise market or is known in the market under their trade name and the formula is specifically formulated by them.

7. The Hon'ble Supreme Court in the case of Astra Pharmaceuticals (P) Ltd., referred supra has made a distinction between the house mark and the trade name. A house mark is used in all the products and is a device in the form of an emblem, word or both. Whereas a product mark or brand name is used which is invariably a word or a combination of a word and letter or numeral, by which the product is identified and asked for. The goods are marketed only by the product mark or brand name.

8. By applying the ratio of the above decision of the Hon'ble Supreme Court to the facts of the instant case, we find that the word Core IV or Core Tabs appearing on the container is nothing but a house mark showing a connection between the manufacturer and the medicine.Wockhardt Ltd. v. Collector of Central Excise, Aurangabad reported in 2000 (124) E.L.T. 386 (Tri.) has held that the names under which the product is described having been given in the pharmacopoeia, mentioning of the name reflecting the connection with the manufacturer will not make the medicine as patent or proprietary. Inasmuch as in the present case also the medicines are being sold under the product's name as described in pharmacopoeia and were not special preparation made by the respondents in which they could claim proprietary rights, the same have to be held as not patent or proprietary medicaments. Similarly, in the case of Liva Pharma Ltd. v. Commissioner of Central Excise, Aurangabad , it was noticed that the name Ranitidine appears in the Pharmacopoeia and the mark "Liva" on the packing indicated the name or house mark of the manufacturer as is mandatory under the Indian Drug Rules. Accordingly, it was held that as the pharmacopoieal preparation is sold under its pharmacopoeial name, the appearance of the word "Liva" will not make it as patent or proprietary medicine. To the same effect, is another decision of the Tribunal in the case of Miaami Pharma & Chemicals Ltd. v. Collector of Central Excise, Pune that appearance of the letters 'MPC' embossed on the bottles is only a house mark and not product mark and the medicines cannot be classified under Heading 3003.10. It is further noticed that the same issue arose in the case of Wyeth Laboratories Ltd. v.Commissioner of Central Excise, Mumbai and by following Astra Pharmaceutical Pvt. Ltd., it was held that where the goods are being manufactured under the names mentioned in Pharmacopoeia, they cannot be held to be classifiable as Patent or Proprietary medicine.BDH Industries Ltd., v.Commissioner of Central Excise, Mumbai-V wherein the assessee claimed the goods to be classifiable under Heading 3003.10 and claimed Modvat credit of duty paid on the inputs used in the manufacture of the same. The Tribunal observed that the medicaments, which were exported, were not patent or proprietary medicines. Inasmuch as the mark on the container was only house mark and as such, the assessee was not entitled to the benefit of the Modvat credit.

11. As we have discussed earlier, the expression Core IV, Core Tabs and Corflam is only in nature of a house mark and the medicines are being marketed under the names specified in Pharmacopoeia. The respondents have also not rebutted the Revenue's contention that the orders for export have also been placed under generic name and not under the trade name. It has also not been contested before us that the medicines are being traded in the market in their trade name. As such, we are of the view that the Commissioner (Appeals)'s order holding the goods to be P&P medicines and thus entitled to the benefit of the Modvat credit is not sustainable. Accordingly, we set aside the same and allow the appeal of the Revenue by restoring the order of the Assistant Commissioner.


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