ORDER
K.S. Venkataramani, Member (T)
1. The appellants in this case filed a classification list No. 6/95-96 with effect from 24-4-1995 for their product honeypro granules classifying them under Chapter Heading No. 3003.10 with 15% duty as medicament. The product is described as ‘readily digestible milk protein enriched with lysine, methionine, iron, zinc, calcium, honey, lecithin and vitamins. According to the direction for use, the granules are to be added in a measureful to a glass of warm milk and to be taken adding sugar to taste. The jurisdictional Asstt. Commissioner of Central Excise, Div. I, Aurangabad issued 2 show cause notices for the period April 1995 to August 1995 and from September 1995 to January 1996 on the ground that honeypro is nothing but an edible preparation as food supplement for general health and energy. Since the preparation does not have any therapeutic or prophylactic use, the Asstt. Commissioner held that the correct classification should be under sub-heading 2108.90 of Central Excise Tariff Act as other edible preparation in the form of food supplement. The total duty demanded in the 2 show cause notices amounted to Rs. 65,685.77. The appellants’ plea that the product is registered as a drug under the Drugs and Cosmetic Act and has prophylactic use was not accepted by the Asstt. Commissioner and he confirmed the demand under the classification proposed in the show cause notices. The appeal against the Asstt. Commissioner’s order was rejected by the Commissioner (Appeals) against which the present appeal has been filed. The Commissioner (Appeals) noted that Chapter Note 2 to Chapter 30 has defined medicament to mean goods other than foods or beverages such as dietetic, diabetic or fortified foods or tonic beverages. He found that the products in question does not have therapeutic or prophylactic uses and it is essentially high protein nutritional product which is enriched with certain vitamins and other ingredients. He found that the product is basically a protein enriched with vitamins meant for nutritional rather than prophylactic use. Accordingly, the Commissioner (Appeals) has held that the product has been rightly classified under Chapter Heading 2108.90 CETA.
2. Shri R.M. Sharma, the ld. Counsel for the appellants, contended that the lower authorities had ignored the fact that the appellants have been issued with the licence by the Food & Drugs Administration Department under the Drugs & Cosmetics Act and the product has been licensed as a drug. The ld. Counsel further argued that the formulation of the product is as per the I.P. standards. It was further urged that a perusal of its composition would show that the product contains zinc 700 PPM which is beyond the permissible limit of 50 PPM as mentioned under the Prevention of Food Adulteration Rules and such percentage of zinc contained can only be used for drug and medicine preparations. The ld. Counsel also relied upon the Supreme Court decision in the case of B.P.L. Pharmaceuticals Ltd. v. Collector of Central Excise, Vadodara -1995 (77) E.L.T. 485 (S.C.) and also Madhya Pradesh High Court decision in the case of Panama Chemical Works v. Union of India -1992 (62) E.L.T. 241, wherein the Madhya Pradesh High Court had held that digestive tablets having 3% active ingredients as per Ayurvedic texts and 97% sugar/liquid glucose for taste and as a preservative will be assessable as medicaments under sub-heading 3003.30 CETA. This decision has also been followed by the Tribunal in the case of Dabur India Ltd. v. Collector of Central Excise, Meerut – 1994 (71) E.L.T. 1069 (Tribunal) to hold that the product called hajmola candy containing 25% active ingredients as medicament under the same sub-heading 3003.30 CETA. The ld. Counsel urged that here also honeypro granules is prescribed for the post-surgical and convalescence patients and patients suffering from diseases like T.B. diabetics etc. It was further pleaded that the Chapter 21 is a general heading for edible food, whereas, the heading claimed by the appellants under Chapter 30 CETA is specific for medicament.
3. Shri S.V. Singh, the ld. DR for the department, referred to Chapter l(a) of Chapter notes to Chapter 30 covering pharmaceutical products and pointed out that according to the chapter notes this Chapter does not cover foods or beverages such as, dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters. In the present case, the goods are nothing but fortified foods being enriched with protein and as such get excluded from Chapter 30. Therefore, there was no question of even applying Chapter Note 2 relating to medicament. But even then, as Commissioner (Appeals) pointed out, they get excluded from the coverage of medicament. The product here is basically of milk protein which is enriched with vitamins. The ld. DR relied upon the Supreme Court decision in the case of Shree Baidyanath Ayurved Bhavan Ltd. v. Collr. of C. Ex., Nagpur – 1996 (83) E.L.T. 492 (S.C.) for characteristics of the medicine as one that it is prescribed by a Doctor with dosage and has to be taken for a prescribed period. In the present case, applying those criteria, there is no indication whether these characteristics are fulfilled by the product in question because it is essentially an edible food preparation with enriched vitamin. It can be taken for a long period. The ld. DR also pointed out that in this case no evidence has been led to substantiate the claim that the product is available only on a prescription by Doctor. The order of the Asstt. Commissioner has pointed out that similar product is being marketed as nutritional supplement. The ld. DR contended that the case law cited by the appellants is distinguishable. In the B.P.L. Pharmaceuticals Ltd. decided by the Supreme Court regarding selsun shampoo, there were other circumstances besides the drug licence which was considered by the Supreme Court. In the Madhya Pradesh decision supra, the High Court noted that sugar in that case was added only as a preservative. Here that is not so. The ld. DR also relied upon the Tribunal decision in the case of Collector v. Warner Hindustan Ltd. – 1989 (42) E.L.T. 33 wherein the Tribunal held that the product called halls, ice mint tablet cannot be considered as ayurvedic medicine.
4. We have carefully considered the submissions. The question is whether, the product in dispute ‘honeypro granules’ is a medicament under sub-heading 3003.10 or food supplement under Heading 2108.90. The copy of the label on the product which is on record describes it as honey protein efficiency ratio enriched with lysine, methionine, iron, calcium, honey, vitamins & zinc. The label further says that the product is a readily digestible milk protein enriched with the above material. There is also indication of direction for use which says that add two measureful of honeypro granules in a glass of warm milk and add sugar to taste, if required and stir well to make a homogeneous drink and consume. Dosage is indicated as two measureful (15 gm.) twice daily. As for the nature of the product, it is essential for considering it as a drug to apply the test laid down by the Supreme Court in the B.P.L. Pharmaceuticals Ltd. case supra as to whether it is substance intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human being or animal. The application of the product as indicated by the appellants in the appeal memorandum goes to show that the product is prescribed for post surgical and convalescence patients, children in growth phase. There is no indication clearly as to what is the disease that the product is to prevent or treat. It may be noted that in the B.P.L. Pharmaceuticals Ltd. case the Supreme Court noted the selsun shampoo was a substance for treating dandruff which is a disease. In the case of Panama Chemical Works decided by the Madhya Pradesh High Court supra on which also the appellants rely there was an adjudication order by the Drug Controller authorities after issue of show cause notice to the manufacturers of SWAD holding that on the basis of their explanation that the product was medicament. This was further supported by technical expert opinion in that case. On the other hand, in the present case before us, the appellants had claimed before the Asstt. Commissioner that the product is considered as drug in the Current Index of Medical Specialities Vol. 18 No. 3 Sept. Dec. 1995. But on a perusal of the document, the Asstt. Commissioner has found that the product in question is not mentioned therein as a drug but on the contrary the honeypro liquid containing nearly same ingredients like the present product honeypro granules is mentioned as a nutritional supplement. This is significant and it is in line with the description of the product in the label referred to above as high protein efficiency ratio enriched with lysine, methionine, vitamins etc. In such situation, the lower authorities have correctly applied Chapter Note 2 of Chapter 30 of CETA to hold that high protein granules is basically a protein enriched with vitamins meant for nutritional rather than prophylactic use and as such it would be classifiable under sub-heading 2108.90 and not under sub-heading 3003.10 claimed by the appellants. It is also noted that in, this case, the appellants have not indicated what is the active ingredient in the preparation and what is the disease which it seeks to treat or prevent. On the other hand, the material on record would lend support to the view as already noted above that the product as found by the Asstt. Commissioner as nutritional supplement. The appellants have also not led evidence from experts as in the other cases cited by them to show that the product is prescribed as a medicament. If the zinc content of the product would take it out of the purview of nutritional supplement, there should be suitable indication on the product label about its use only on a doctor’s prescription. In one of the labels on record there is no such indication and in another it seems to indicate it only as an option. Therefore, this contention also fails to advance the case of the appellants.
5. In the result, we see no reason to interfere with the impugned order. The appeal is rejected.