Judgment
1. The appellant-asessee is aggrieved with the order-in-appeal dated 29-1-1988 passed by the Collector of Central Excise (Appeals), Madras.2. By this order the ld. Collector has denied the benefit of exemption of Notification No. 245/83 and also for the benefit of concessional rate of duty under Notification No. 45/82, dated 28th February 1982 in respect of the item 'Water for injection' manufactured and cleared by them for the period February 1986 to December 1986.
3. The facts of the case are that the show cause notice dated 21-1-1987 was issued by the Superintendent of Central Excise alleging that the appellant had manufactured and cleared 'water for injection' falling under Tariff Item No. 14E of the erstwhile Schedule of the Central Excise Tariff Act and the same fell under sub-heading No. 3003.19 of the Central Excise Tariff Act from 1-3-1986, for which they had been paying duty by claiming deduction of 15% discount and 15% Excise duty from maximum retail prices as per Notification No. 245/83. It had been alleged that the assessee had a contract with Government of India for supply of the said item at Rs. 0.62 P per vial and therefore, it was alleged that the duty claimed for approval at 0.47 P was not correct.
Therefore, they were asked to show cause as to why the differential duty, short levied, amounting to Rs. 33,739.75 for the quantity of the said item cleared for the said period should not be demanded from them after revising the assessable value. The ld. Assistant Collector after adjudication denied the benefit of both the Notifications. The prices have been approved for 55 ps. per vial during Feb' 1986 and 54 Ps. from March' 1986 onwards; with these modifications the demand for differential duty was confirmed.
4. The ld. Collector rejecting their appeal held that the assessee had attempted to raise the question of classification, which cannot be revised as there is no provision for filing a classification list under protest in Rule 173B of Central Excise Rules and, therefore, rejected the prayer for reclassification under Tariff Item 68. Further holding that they should have filed appeal against the order of classification under Tariff Item 14E as it existed then. On the aspect of valuation the ld. Collector has noted their submissions that although they were not entitled for the benefit of the Notification No. 245/83 which was wrongly claimed by them under the guidance of Superintendent. The ld.Collector has held that even if they have filed a classification list by quoting the wrong Notification, even then it was within the jurisdiction of the proper officer to correct the reference to the notification which is applicable in the case of appellants after making such enquiry as the proper officer deemed fit as per the authority of Sub-rule (2) of Rule 173(B). Therefore, in that premise, the ld.Collector has set aside the Assistant Collector's orders denying the benefit of Notification No. 45/82 as amended and directed him to consider granting the benefit.
5. In this appeal, the appellants are contending that the Collector had cursorily rejected their plea to consider correct classification of the product on the ground that they have not filed a appeal against the non-speaking order of the Superintendent, wherein he had told them that as per Board's letter, classification of the item is under Tariff Item 14E as it existed then. Therefore, then called so the non-speaking order of the Superintendent is also a communication letter as subsequently mentioned in impugned order-in-appeal itself. In this regard, they rely on the Allahabad High Court's judgment rendered in the case of Ajanta Paper Products, Ratanpum, Agra-4 v. Collector of Central Excise, Kanpur and Anr. as reported in 1982 (10) E.L.T. 201 and that of judgment of the Tribunal in the case of Brooke Bond India Ltd. v. Collector of Central Excise, as reported in 1983 (13) E.L.T. 1169, wherein it has been stated that a letter of Deputy Collector of Central Excise cannot be considered as an adjudicating order and that the order is to be a speaking one.
It is further stated by them that they had suitably replied to the letter dated 19-2-1986 of the Superintendent disputing the classification effected by the Superintendent and requesting for issue of an appealable order. However, no such order had been issued to them.
They have stated that they had raised the said dispute before the Collector (Appeals) and had clearly pointed out that the proper officer for approving the classification of the product in question was the Assistant Collector and not the Superintendent and therefore, the letter dated 18-2-1986 of the Superintendent cannot be considered as a order on classification. On merits, it is stated by them that the item "Water for Injection I.P" is a Pharmacopoeial preparation covered under Indian Pharmacopoeia (3rd edition 1985) Vol. II page 545 and that it is not a patent or proprietary product as it is marketed without any monogram, symbol or Trade Mark of the manufacturers and therefore, Tariff Item 14E or sub-heading 3003.19 under the new tariff is not attracted. It is submitted by them that it is a Pharmaceutical Aid, which is not patent or proprietary and therefore, the classification of the product prior to 28-2-1986 has to be under Tariff Item 68 and thereafter under sub-heading 3003.20. It is also submitted that the Assistant Collector's reliance on the Board's letter No. 24/20/63-CX.l, dated 7-2-1963 for classifying under Tariff Item 14E amounts to simply following the Board's instructions without acting as an independent judicial authority. Therefore, the order is liable to be set-aside. In this regard, they have also relied on the several judgments.
6. We have heard Shri R. Nambirajan, ld. Advocate for the appellant and Shri V.C. Bhartiya, ld. JDR for the Revenue. Ld. Advocate pointed out that they are not using any Trade Mark or Symbol on the product and that the mention of the company's initial is only a house name and not a trade name. They have also submitted that the item is included in the Indian Pharmacopoeia and hence the classification has to be under Tariff Item 68 and thereafter under sub-heading 3003.19. In that view of the matter, the exemption under Notification 45/82, dated 28-2-1982 is available on the said product. Ld. Advocate pointed out that there is no order on the classification.
7. Ld. JDR submitted that the appellants were putting the name Astra IDL on the wrapper of the product and therefore, it constituted a Trade Name and hence they were not entitled the benefit of the notification.
8. We have carefully considered the submissions made by both the sides and perused the records. After the case was closed for orders, the ld.Counsel has filed a copy of the judgment passed by the Hon'ble Supreme Court of India in Civil Appeal No. 3403 (NM) of 1987 [since reported in 1995 (75) E.L.T. 214 (SC)] in respect of one of their drugs 20% Dextrose injection. The said item was classified under Tariff Item 14E and the Tribunal had taken a view that the use of the company's name Astra IDL disentitled them from classification under Tariff Item 68.
The Hon'ble Supreme Court has negatived the revenue's contention and set-aside the Tribunal's order and has held that the use of the word 'Astra' is only of a house name and that it is not a trade mark. We have carefully perused the records and also the grounds made before us.
The Collector (Appeals) has taken a view that the appellants had not challenged the question of classification effected by the Superintendent in this case. This aspect of the matter has been challenged by the appellants and we are quite satisfied with the grounds urged by them on this aspect. The reason being the appellants had immediately sent a letter dated 19-2-1986 protesting the letter of the Superintendent. They had sought for a reasoned order. It is also their plea that Superintendent cannot decide the matter. This argument has not been properly dealt with by the Collector (Appeals) and as the question of classification has not been dealt with by the lower authorities at the earliest stage and therefore, merely dealing with the aspect of notification will not be proper. We therefore, feel that the impugned orders are required to be set aside and the matter is required to be remanded to the lower authorities for deciding the question of classification, in the light of the Supreme Court's judgment cited before us, thus the impugned orders are set aside and matter remanded [to] the lower authorities.
9. This is a revenue appeal against the same order of the Collector (Appeals) on the aspect pertaining to valuation. As we have already set aside the lower authorities' order, the Revenue Appeal also is required to be remanded for reconsideration of the matter. Therefore, the Revenue appeal is also allowed by remand.
10. With due respects to Hon'ble Member (J) my views and orders are as follows :- 11. In view of the judgment of the Hon'ble Supreme Court in the assessee's own case, the appeal succeeds on classification.
12. As in the case of DEXTROSE INJECTION, subject matter of the above judgment, it has been held by the Hon'ble Supreme Court that there is a distinction between 'House Mark' and 'Product Mark' (brand name) and the monograph of the appellant has been held to be a House Mark.
Therefore, the 'water for injection I.P.' which is a pharmacopoeial preparation (covered by both Indian Pharmacopoeia as well as Martindale) has to be treated as a 'medicament' other than a patent or proprietary product. It is classifiable as such under Tariff Item 68 under the old tariff (prior to 28-2-1986) and under the Heading 3003.20 under the new tariff (after 28-2-1986).
13. This settles the classification issue in the light of ratio of the Hon'ble Supreme Court judgment.
14. The second aspect relates to the appropriate notification governing the effective rate of duty. In this respect, the decision as per para 10 above renders the Notification No. 45/82 (as amended) and 245/83 (as amended) irrelevant and inapplicable; but it leaves intact the assessee's initial claim regarding the benefit of Notification No.234/82 (as amended) for the period covered by the old tariff during which the item was classifiable under Tariff Item 68.
15. This aspect was, however, not covered by the impugned orders. The lower authorities have not dealt with this notification apparently because of their stand on classification. This contention had however, been raised in the appeal memorandum as well but the department has not made any submissions evidently because of their basic plea on classification.
16. If the assessee had included this plea only in his miscellaneous application forwarding the Supreme Court judgment subsequent to hearing, I would have considered a remand or reopening of the matter.
However, since this was one of the pleas raised in the Appeal Memo and one with reference to which the relief was sought, the department ought to have taken the precaution, at least at this stage to cover this aspect as well. Since it has not been so done but the serial No. 21 of Notification No. 234/82-C.E. (as amended) explicitly covers "All bulk drugs, and medicines" it could also be dealt with here itself.
17. The 'water for injection' of pharmacopoeial grade is a recognised pharmacopoeial aid and a drug, which as per our order, was required to be classified as a 'medicament', but it could not be considered as a bulk drug or medicine in the absence of any evidence in support of this contention. Therefore, it will not be covered by the above serial No.as it stood during the relevant period. Accordingly, the benefit of this notification would not be available to the appellants.
18. However, the demand for this period (prior to 28-2-1986) was barred by time as no suppression or mis-statement could be said to be involved in view of the Hon'ble Supreme Court judgment and our decision as per para 10 above following the ratio thereof; whereas for the period subsequent to 28-2-1986 the statutory rate of duty was itself nil, therefore, no demand survives.
19. In view of the above position, the valuation aspect and the revenue appeal become infructuous.
20. I, therefore, accept the assessee's appeal and reject the department's appeal.