Per Jyoti Balasundaram :

The above appeals involve common issues and are hence heard together and disposed of by this common order.

2. The brief facts of the case are that M/s. ICPA Health Products P. Ltd. are engaged in the manufacture of pharmaceutical products and preparations for oral or dental hygiene falling under Sub-heading 3003.10 and 3306.00 of the Schedule to the CETA, 1985 respectively. They were availing concessional rate of duty under Notification 175/86-CE dated 1.3.86 as they had not crossed SSI limit upto 14.6.88. They had classified their products viz. (1) Hexiprep (2) Hexiscrub (surgiscrub) and (3) Hexiaqua under Sub-heading 3003.10 and paid duty under Notification 29/88-CE dated 1.3.88 at 10% adv. BED and 5% SED which appeared to the Department to have been paid incorrectly. The Chemical Examiner opined, from the contents of the labels of all the 3 products, that Chlorhexidine Gluconate Solution BP had therapeutic properties and use as disinfectant which is specifically covered under CET Heading 38.08 and hence the above mentioned 3 products containing Chlorhexidine Gluconate Solution BP were disinfectants falling under that Heading and not medicaments falling under CET Sub-heading 3003.10. The Department was also of the view that the product Hexidine manufactured by M/s. ICPA Health Products P. Ltd. was a product for oral hygiene classifiable under Sub-heading 3306.00 and not a medicament under Chapter 30. Accordingly, a show cause notice dated 23.5.91/29.5.91 proposing reclassification of Hexiprep, Hexiscrub and Hexiaqua under CET Sub-heading 3808.00 and Hexidine under CET Sub-heading 3306.00 and proposing recovery of differential duty of Rs. 7,41,813.13 for clearances during the period from March 1988 to November 89. The extended period was invoked in the notice on the ground of misstatement and suppression of facts. The adjudicating authority upheld the classification proposed in the show cause notice and confirmed the entire demand, by his order dated 28.11.91 against which the assessee has filed E/770/92-C.

3. E/38/95 and E/39/95-C arise out of the order dated 27.9.94 of the Collector of Central Excise (Appeals), Ahmedabad setting aside the order dated 20.5.93 of approval of classification list No. 5/90-91 dated 2.8.91 classifying Hexiprep Hexiscrub and Hexiaqua under CET Sub-heading 3808.90 and Hexidine under CET sub-heading 3306.00 and Order-in-Original dated 28.7.93 confirming consequential duty demand of Rs. 21,13,369.03, both passed by the Assistant Collector of Central Excise.

4. We have heard Shri V. Lakshmikumaran, learned Counsel and Shri H.K. Jain, learned SDR.

5. We record our findings as under:

5.1 Classification of Hexiprep, Hexiscrub and Hexiaqua

The basic ingredient of these 3 products is chlorhexdine gluconate solution BP, which is a 20% aqueous solution of 1.1 hexamethylenebis (5-(4 chlorophenyl) biguanide) digluconate. The Pharmaceutical Codex (incorporating the British Pharmaceutical Codex) mentions that Chlorhexidine Gluconate Solution BP containing 0.05 to 0.5% is used for disinfection of the hands. The labels of the 3 products above mentioned describe them as "superior surgical microbicidal solution". Hexiprep is used to paint the skin as required to disinfect the skin before surgery. It is for rapid skin disinfection prior to surgery. Hexiaqua is used as a skin disinfectant to paint the skin before surgery and as a wound disinfectant. It is described as a cleanser, and to used for cleansing of wounds and abrasions and minor cuts. Hexiscrub is for use on hands and forearms of Surgeons for rapid hand disinfection prior to surgery. These three products are described as "faster, longer acting microbicidals". The killing of microbes is to prevent a patient from contracting any infection. Hence the disputed microbicidal solutions are in the nature of disinfectants and are hence excluded from the coverage of Chapter 30 by virtue of Note 1 (a) (2) to Chapter 38. The contention of the lear