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Micropure Parenterals Pvt. Ltd. Vs. Commissioner of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(2005)(190)ELT23Tri(Mum.)bai
AppellantMicropure Parenterals Pvt. Ltd.
RespondentCommissioner of Central Excise
Excerpt: the form of tablets containing other ingredients. the appellants have contended that their product vitamin b complex tablets container the following ingredients : (1) thiamine (2) riboflavin (3) niacinamide (4) calcium pantothenate (5) lactose (6) i.p.a. (7) mangesium stearate (8) p.v.p. the printed label showing the composition of the product indicates the ingredients in the product in question as vitamin b1, vitamin b2, vitamin b6, niacinamide i.p. and calcium pantothenate. such a product does not fall under sub-heading 2936.00 in view of the chapter note referred to above, as the product is a formulation of several vitamins with other ingredients added and not separate chemically defined organic components. though this requirement is subject to the condition "except where the.....
1. There was a difference of opinion as regards the classification of medicaments in the form of tablets/injections having fixed dose i.e.

combination of Vitamin B1, B6, B12. While the Western Zonal Bench, Mumbai in Emerck India Ltd. v. CCE, Mumbai held the products are classifiable as medicaments under chapter 30 of the Central Excise Tariff, another coordinate Bench of CESTAT in the case of P&B Laboratories Ltd v. CCE, Mumbai-V arrived at a conclusion that fixed dose combination of Vitamin B1, B6, B12 in injection as well as in tablet form fall under heading 29.36. This bench has been constituted to hear the matter for resolving these divergences.

2. After hearing both sides & considering the material on record, the opinions of Drugs Technical Advisory Board & other relevant material, it is found and held as-Micronova Pharmaceuticals Pvt. Ltd. v. Collector of CCE Bangalore Tribunal in its order dtd 31.5.96, while examining the classification of Vitamin B Complex Tablets NFI, held as follows.

We have considered the rival submissions and perused the record. The point of decision is whether the product in question namely Vitamin B Complex Tablets NFI attracts classification under Tariff sub-heading 2936.00 as held by the impugned order or under sub-heading 3003.02 as claimed by the appellant. The former sub-heading covers provitamins and vitamins natural or reproduced by synthesis (including natural concentrates) derivatives thereof used primarily as vitamins and intermixtures thereof, whether or not in any solvent while the latter covers Medicaments (other than patent or proprietary) other than those which are exclusively used in Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic systems. The moot point thus is whether the Vitamin B Complex Tablets merit classification as Vitamins under sub-heading 2936.00 or as medicaments other than patent or proprietary ones. At first blush it may appear that the specific entry "Vitamin" will apply and not the general one "Medicaments". But the position is not so. It was the contention of the appellants before the authorities below that the former entry "vitamin" covers only bulk drug and not a vitamin preparation (tablets) as theirs. This was not accepted by the Collector (Appeals) who held that thee is no provision that only a bulk drug should attract the classification under 2936.20. For proper appreciation of the issue, the Chapter Notes under these two Chapters 29 and 30 have to be considered. The former Chapter covers Organic Chemicals and Chapter Note 1(a) lays down that except where the context otherwise requires, the headings of that chapter inter alia apply only to separate chemically defined organic compounds whether or not containing impurities. Applying this test, it will appear that the entry 2936.00 will cover only a separate chemically defined vitamin or intermixtures of vitamins but not a medicament or preparation in the form of tablets containing other ingredients. The appellants have contended that their product Vitamin B Complex Tablets container the following ingredients : (1) Thiamine (2) Riboflavin (3) Niacinamide (4) Calcium Pantothenate (5) Lactose (6) I.P.A. (7) Mangesium Stearate (8) P.V.P. The printed label showing the composition of the product indicates the ingredients in the product in question as Vitamin B1, Vitamin B2, Vitamin B6, Niacinamide I.P. and Calcium Pantothenate. Such a product does not fall under sub-heading 2936.00 in view of the Chapter Note referred to above, as the product is a formulation of several vitamins with other ingredients added and not separate chemically defined organic components. Though this requirement is subject to the condition "Except where the context otherwise requires" as per the said Chapter Note, the wording of the subject Tariff Heading 29.36 does not take within this sweep the product, Vitamin B Complex tablets containing several other ingredients. This entry which has been preferred by the authorities below is, therefore, not appropriate.

The alternative classification claimed by the appellants, namely, 3003.20 has been held by the Collector (Appeals) to be not applicable on the ground that medicament has been defined in Chapter Note 2(i) of Chapter 30 s products for therapeutic or prophylactic uses, that it has been admitted by the appellants that Vitamin B Complex is therapeutically inert and that the vitamins neither prevent any diseases nor cure them which is the function of a therapeutic product. He has, in this connection, observed that just because of Vitamins finding a place in a pharmacopoeal formulary one cannot go beyond the scope of the definition in the Tariff and classify the goods as a medicament. While it is undeniable that one cannot go beyond the scope of the Tariff it is to be noted that the Collector has misinterpreted the Tariff entry itself. The Chapter Note 2 lays down that for the purpose of Heading 30.03 medicament means products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses or unmixed products suitable for such use put up in measured does on in packings for retail sale or for use in hospitals. The Collector has referred to dictionary meaning of the term "therapeutic" and has missed the other type of use "prophylactic" figuring in the said Chapter Note. He has also drawn a wrong conclusion that the appellants had admitted that Vitamin B Complex is therapeutically inert. What the appellants had stated was that their product Vitamin B Complex tablets are a formulation made out of principal Vitamins and other ingredients which are pharmaceutical necessities and therapeutically inert. They therapeutically inert attribute is in respect of the other ingredients and not the Vitamins themselves.

This mistake apart, the use of vitamin formulation in the manner satisfying the definition in the relevant Chapter Note would absence gives rise to metabolic disturbances. Their administration is to treat these disturbances and to prevent them and hence Vitamin B Complex Tablets satisfy the criteria of therapeutic or prophylactic use. Thus the product in question merits classification under Tariff sub-heading 3003.20 as claimed by the appellants. The impugned order is accordingly set aside and the appeal allowed.

We find that the Bench in that case have considered the Chapter Notes of Chapter 29 to 30 in the correct perspective and found no reason to come to a conclusion, to alter the classification of such fixed does content of vitamin B1,B6,B12, merely because Drug Technical Advisory Board vide their order, have recommended no therapeutic application on such fixed does of vitamin B1, B6, B12.

b) In the case of Emerck India Ltd v. CCE, Mumbai the Bench has considered notification GSR/702/E dtd 14/10/99 issued by Ministry of Health and Family Welfare, which prohibits manufacture sale & distribution of such combinative of vitamin B1,B6,B12 for human use, with effect from date specified therein, in exercise of powers under Section 26A of the Drug & Cosmetics Act, 1940. The Bench has also considered earlier directions issued dtd.

23/2/96 by the Drug Controller General (India) to the following effect.

"The rationality and efficacy of the subject drug had been examined by a Technical Committee of Expert and its recommendations were further considered by the Drugs Technical Advisory Board (DTAB). The DTAB was of the view that indiscriminate use of preparations containing FDC of Vitamins B1,B6,B12 is to be discouraged as this product is observed to be useful only in certain conditions, viz, peripheral neuropathy due to multi factorial etiology.

You are, therefore, advised to instruct all manufacturers in your State to mention only above indications in the product insert/literature etc. for this product. You are also requested to advise and inform all concerned personnel to use subject product for the indications so specified.

The Bench observed that the above quoted letter recognizes that fixed does combination of vitamins did have prophylactic activity which is not even disputed by the 1999 notification GSR 702 (E) dtd 14.10.99 issued of Ministry of Health and Family Welfare. The classification of medicaments under Central Excise Tariff is governed by Note 2 to Chapter 30 for medicaments which include "for therapeutics or prophylactic use". The note includes prophylactic agents as well. The Bench observed that even the above said notification issued under Drugs & Cosmetics Act does not say that fixed does combination of vitamins do not have any therapeutic or prophylactic value. It only says that such FDCs do not have those values as claimed by the manufacturers. The fact that these FDCs have therapeutic or prophylactic use is evident from the letter dtd 23.2.96 of the Drugs Controller. This letter itself is based on Drugs Technical Advisory Boards opinion. In view of those observations the Tribunal in the case of Emerck held that FDCs of vitamins are classifiable under chapter heading 3003.10 as medicaments.

c) We find that classification under chapter heading 3003.10, as arrived at for such fixed doses combinations of vitamins which admittedly have a brand/trade name and which have prophylactic use is more appropriate instead of under heading 2936.00 as arrived at in the case of P&B Laboratories Ltd. v. CCE, Mumbai-V . We are also reinforced in our view by Rule 3(c) of the Rules of Interpretation of the Schedule, in coming to the conclusion that the impugned products are correctly classifiable under chapter 30 as medicaments.

3. In view of our findings, classification in the case of Emerck India Ltd. v. CCE, Mumbai is upheld and the reference is answered accordingly. Matter now to be placed before the appropriate Bench to pass the order in this appeal referred for the resolving the difference on the question of classification.

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