The main legal point established is that herbal extracts with therapeutic value should be classified under Tariff Entry 30.03 and not 13.01 under the Central Excise Act.

ORDER

1. THE APPELLANT MANUFACTURES MEDICINAL PRODUCTS OUT OF HERBAL EXTRACTS.

THE QUESTIONS WHICH HAVE ARISEN IN THIS APPEAL, INTER ALIA, ARE WHETHER THE EXTRACTS WERE GOODS FOR THE PURPOSE OF THE CENTRAL EXCISE ACT AND IF SO, WHETHER THEY WERE CLASSIFIABLE UNDER CHAPTER 13 OR 30 OF THE ACT.

2. THE APPELLANT CARRIES ON ITS BUSINESS BOTH IN WEST BENGAL AS WELL AS IN UTTAR PRADESH. DEMANDS WERE RAISED IN RESPECT OF THE PERIOD 1-8-1990 TO 28-2-1994 BY REVENUE AUTHORITIES IN BOTH THE STATES ON THE BASIS THAT THE HERBAL EXTRACTS WERE LEVIABLE TO EXCISE DUTY UNDER CHAPTER 13. AS FAR AS WEST BENGAL WAS CONCERNED, THE RELEVANT ENTRIES WERE CONSTRUED BY THE COMMISSIONER AND IT WAS HELD THAT THE GOODS WERE PROPERLY CLASSIFIABLE UNDER CHAPTER 30 UNDER TARIFF ITEM 30.03. THE RATE OF DUTY AT THAT POINT OF TIME WAS NIL. HE ACCORDINGLY DROPPED THE PROCEEDINGS.

3. AS FAR AS UTTAR PRADESH WAS CONCERNED, HOWEVER, THE COMMISSIONER DECIDED THE PROCEEDINGS AGAINST THE APPELLANT HOLDING THAT THE EXTRACTS WERE PROPERLY CLASSIFIABLE UNDER CHAPTER 13. THE APPELLANTS FURTHER APPEAL TO THE TRIBUNAL FROM THIS DECISION WAS REJECTED AND THAT IS THE ORDER IMPUGNED BEFORE US.

4. THE RELEVANT ENTRIES IN CHAPTER 13 ARE REPRODUCED BELOW:

"CHAPTER 13

LAC; GUMS, RESINS AND OTHER VEGETABLE SAPS AND EXTRACTS

HEADING NO. SUB-HEADING DESCRIPTION OF ROODS RATE OF DUTY

(1) (2) (3) (4)

13.01 LAC; GUMS, RESINS AND

OTHER VEGETABLE SAPS

AND EXTRACTS

1301.10 - LAC NIL

1301.90 - OTHER 15%”

5. THE REVENUES CONTENTION THAT THE EXTRACTS IN QUESTION WERE PROPERLY CLASSIFIABLE UNDER SUB-HEADING 1301.90 AND DUTY WAS LEVIABLE ON THE APPLICANT UNDER THE ACT IN RESPECT OF THE EXTRACTS AT 15%.

6. AS FAR AS CHAPTER 30 IS CONCERNED IT DEALS WITH PHARMACEUTICAL PRODUCTS. THE ENTRY ON WHICH RELIANCE HAS BEEN PLACED BY THE APPELLANT IS SUB-HEADING 3003.30. IT READS:

HEADING NO. SUB-HEADING NO. DESCRIPTION OF GOODS RATE OF DUTY

(1) (2) (3) (4)

30.30 MEDICAMENTS (INCLUDING

VETERINARY MEDICAMENTS)

3003.30 - MEDICAMENTS, INCLUDING

THOSE USED IN AYURVEDIC, UNANI,

SIDDHA, HOMOEOPATHIC OR

BIOCHEMIC SYSTEMS 15%"

7. THE EXTRACTS OF THE CHAPTER NOTE IN CONNECTION WITH THE RELEVANT ENTRY WHICH HAVE BEEN RELIED UPON BY THE APPELLANT ASSESSEE ARE QUOTED VERBATIM: "2. FOR THE PURPOSES OF HEADING 30.03:

(I) MEDICAMENTS MEANS GOODS (OTHER THAN FOODS OR BEVERAGES SUCH AS DIETETIC, DIABETIC OR FORTIFIED FOODS, TONIC BEVERAGES) NOT FALLING WITHIN HEADING 30.02 OR 30.04 WHICH ARE EITHER-

(A) PRODUCTS COMPRISING TWO OR MORE CONSTITUENTS WHICH HAVE BEEN MIXED OR COMPOUNDED TOGETHER FOR THERAPEUTIC OR PROPHYLACTIC USES; OR

(B) UNMIXED PRODUCTS SUITABLE FOR SUCH USES PUT UP IN MEASURED DOSES OR IN PACKINGS FOR RETAIL SALE OR FOR USE IN HOSPITALS.

* * *

5. IN RELATION TO PRODUCTS OF HEADING 30.03, CONVERSION OF POWDER INTO TABLETS OR CAPSULES, LABELLING OR RELABELLING OF CONTAINERS INTENDED FOR CONSUMERS AND REPACKING FROM BULK PACKS TO RETAIL PACKS OR THE ADOPTION OF ANY OTHER TREATMENT TO RENDER THE PRODUCT MARKETABLE TO THE CONSUMER, SHALL AMOUNT TO MANUFACTURE."

8. THE APPELLANTS RAISED SEVERAL CONTENTIONS INCLUDING THAT OF LIMITATION.

BUT THE MAINSTAY OF THE APPELLANTS ARGUMENT IS A CIRCULAR WHICH HAS BEEN ISSUED BY THE CENTRAL BOARD OF EXCISE AND