C-589-590/BII-132-133/83 dated 17-3-1983. By this order the Appellate Collector of Central Excise ordered that the liquid paraffin IP grade should be assessed after labelling and packing under item 14E of Central Excise, since the product was of pharmaceutical grade and that the paraffin was sold in drum bearing labelling and marking with a monogram of the assessee. He held that as packing amounts to manufacture so far as tariff item 14E was concerned the product would be liable to further duty under tariff item 14E after packing and labelling. He accordingly held that the assessment made by the Asstt.
Collector was in order. He also held that the assessee had misdeclared the product as a drug intermediate falling under item 68 and had suppressed the fact that a product satisfying the specification of tariff item 8 emerged. There was no time-bar in the demand as it would be covered by the longer period of 5 years. The Appellate Collector as well as the Asstt. Collector before him held that the liquid paraffin was also assessable under item 8 of the Central Excise Tariff before its packing and labelling.
2. At the hearing before the Tribunal on 2-9-1983 the counsel for the appellants argued that the goods were sold in drums of 200 litres or more and were of Indian pharmaceutical grade. Even if the drums carried the name of M/s. Lubri-chem it will not make the liquid paraffin patent or proprietary medicine liable to be assessed under item 14E. The goods should be assessed under item 68 as a drug intermediate since it is sold to manufacturers of medicine and exempt under notification No.62/78. The counsel referred to a judgment of the Tribunal in 1983 ELT 1138, apparently seeking to obtain assessment under item 68; but in that judgment, the Tribunal decided 68 to be the proper item for the liquid paraffin of a certain description, one of which was freedom from bituminous content. There are also the factors of flame height and viscosity to be determined. We have nothing on bituminous contents concerning these goods and, therefore, we do not quite see how the judgment can be applied to these cases.
3. There can be little doubt that assessment under item 8 was a correct one and we need not spend too much time on this. The main dispute is the assessment of the packed liquid paraffin under item 14E-Central Excise. This item covers patent and proprietary medicines not containing alcohol, opium, Indian hemp or other narcotic drugs or other narcotics other than those medicines which are exclusively Ayurvedic, Unani, Sidha, Homoeopathic. The item carries an explanation which specifies that if any drug or medicinal preparation in whatever form carries or is carried in a container bearing a name, a symbol, monogram, a label or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of the person, the medicine will be termed as patent and pro-prietary medicine. The counsel for the appellant said that the goods were pharmacopocial preparation used in pharmaceutical industry. They are not sold in ready to use packings but in 200 Itr. drums and packings meant only for actual industrial consumption.
4. The counsel for the department opposed the appellant saying that the use of any name or any container containing a medicine, a drug or preparation makes the contents of such container liable to be assessed as a patent and proprietary medicine. There can be no distinction simply because these goods were packed in large drums of 200 Ltr.
capacity or more.
5. We are inclined to agree with the learned counsel for the department that the use of a name on the drums so that the drums and their contents can be connected to a particular person as the proprietor who manufactures or markets the medicine is sufficient to class the goods as patent and proprietary medicine. To hold otherwise would be to invite endless disputes as to the break off point at which a container can no longer be held to be a container liable to attract to itself the attention of item 14E simply because it (container) is too big. Unless the law itself provides the dividing line it is difficult to accept the appellants' suggestion. It may be true that the goods are sold to manufacturers of medicine but we do not see that this can make such a difference in the assessment.
6. The assessment under item 8 of the unpacked liquid paraffin was because, as indicated by the lower authorities, the goods conformed to the description of that item and, therefore, that assessment was correct also.
7. As regards the time bar, it needs to be mentioned that the factory made no declaration that paraffin was sold in labelled drums/containers. They also claimed goods were drug intermediates assessable free of duty under item 68. Nor did the assessee report that an item 8 product was obtained. Tests showed the product answered to these specifications. The factory therefore failed to make a complete and true declaration. The longer time limit of 5 years was therefore correctly applied.
8. We are, therefore, unable to interfere with the decision of the lower authority and accordingly reject these appeals.