ORDER
Jyoti Balasundaram, Member (J)
1. The brief facts of the case are as follows:
The appellants manufacture medicines for human as well as for veterinary use. Some of the veterinary products were used as feed supplements for animals including birds. They manufactured the following items viz. (1) Clopidox powder (2) Trivet Boluo 5’s Tablets (3) Tridox Bolus 10’s Tablets (4) Pinmit Vet Powder (5) D.L. Tetramisole Powder (6) Sulphadiazin and (7) Trimethoprim Bolus Tablets and classified them under TI-68 of the Schedule to the Erstwhile Central Excise Tariff. They also claimed exemption under Notification No. 234/82 dated 1-11-1982 which grants full exemption in respect of animal feed and supplements. The Range Officer of Hosur Range issued a show cause notice on 10-12-1986 proposing re-classification of the items under TI 14E (P or P Medicines) stating that those veterinary products were not animal feed supplements and, therefore, not eligible for the exemption claimed, and demanded duty for the period from October’ 1984 to February’ 1986 under Section 11A of the Central Excises and Salt Act, 1944. The Collector (Appeals) held that the Assistant Collector was not empowered to demand duty beyond a period of six months and hence the show cause notice issued by the Range Officer after the period of six months, could not be adjudicated by the Assistant Collector. In these circumstances a fresh show cause notice dated 12-10-1989 was issued by the Additional Collector of Central Excise. After adjudication the impugned order was passed confirming the demand. Hence this appeal.
2. We have heard Shri Vijaya Raghavan, learned Consultant for the appellants and Shri L. Narasimha Murthy, learned DR for the respondent.
3. The issue of classification of the disputed products is no longer open for consideration as the same has been settled by the earlier order of the Tribunal in the appellants’ own case – Order No. 453/90-C dated 3-5-1990 in which two products, Mortin (Vet) and Wormal were held to be classifiable under TI 14E of the Central Excise Tariff, relying upon the ratio of the Tribunal’s decision in the case of Collector of Central Excise v. ESKAYEF reported in 1990 (45) ELT 490 (Tribunal). In paragraph 6 of the order (supra) the Tribunal held as follows :
“As regards the classification of the goods under Item 14E of Central Excise Tariff, we find that the case is covered by the ratio of the Tribunal’s decision in the case of Collector of Central Excise v. ESKAYEF, 1990 (45) ELT 490 (Tribunal) on which reliance has been placed by the learned DR while the learned Counsel contended that what constitutes an animal feed supplement is set out in British Veterinary Codex 1965 (extract furnished) which classified even antibiotics and anti-infection agents when added in micro quantities to feeds for prevention of ailments they are to be considered as only feed supplements or additives and not as drugs. As against this, the Tribunal in its order cited supra has clearly held that the criterion to be applied for classification is the definition of patent or proprietary medicines as given in Explanation-I to Tariff Item 14E and that the manner of taking the medicines i.e. with the feed is irrelevant. In the instant case also the products in question admittedly have therapeutic value with prescribed dosages are to be administered on prescription. They are to be used in treatment of, or for prevention of, ailments in animals and the substances bear registered mark. They thus qualify to be classified under Item 14E of Central Excise Tariff. In this view of the matter we uphold the classification of the goods in question under Item 14E as ordered by the Collector. The appeal is disposed of in the above terms.”
4. The issue which survives for determination is whether the demand for duty is barred by limitation since the show cause notice was issued on 12-10-1989 demanding duty for the period from October 1984 to February 1986. The appellants contend that the clearances were made on the basis of approved classification lists and the demand having arisen merely due to change in the opinion on the part of the Excise authorities without reference to new facts, the demand can be effective only from the date of notice and not for any prior period. The appellants filed their first classification list on 10-10-1984 classifying their product as animal feed supplements under TI-68 claiming exemption in terms of Notification No. 234/82. This was duly approved by the Assistant Collector, Hosur Division on 27-6-1985. After due verification a subsequent classification list dated 24-7-1985 was also finally approved by the Assistant Collector on 3-10-1985. After verification by the Inspector and the Superintendent the labels and literature relating to the items were filed along with the classification list and it is not correct for the Additional Collector to observe that the particulars as contained in the labels have been suppressed by the appellants. The fact that the labels in question (which contained the details of the composition of the items) were filed along with the classification list on 10-10-1984 and 27-6-1985 is revealed from the observations in the impugned order that the labels were kept in the records and files of the Excise Department. In paragraph 16 of the impugned order the Adjudicating authority states “that at the time of adjudication the Consultant could not produce the labels for other items but I was able to produce the same from the past records.” In order to examine the merits of the claim, I went through the printed labels available on record. In paragraph 22 of the order it is stated that the classification approving authority has accepted the declaration on the face value and allowed exemption. However, at a later date during the verification of the records it was found that these products were not eligible for exemption. In paragraph 24 the Additional Collector observes that at the time of adjudication he has examined the labels available in the above records (emphasis applied). This clearly establishes the fact that the labels of the products were filed along with the classification list and were available with the authorities at the time of approval of the classification list. Therefore, it cannot be said that the appellants have guilty of suppression or mis-declaration. In the face of the approval of the classification list the question of the effective date of changed classification would have to be considered. The Tribunal in the case of Brakes India Ltd. reported in 1987 (31) ELT 1030 (Tribunal) had laid down that duty can be demanded only from the date of show cause notice if the products are sought to be reclassified on change in interpretation. The Tribunal had laid down the criteria for the effective date of such change in the classification to say that where the change in the stand on the part of the Excise authorities was not due to discovery of new facts or any change in tariff entry or decision of any Court or any such similar reason, but was the result of only a change in the opinion of the Excise authorities the change in classification even if permissible would be effective only from the date of show cause notice. The Tribunal held that when clearances were made on approval of classification list, the demand can be effective only from the date of the notice and not for any anterior period.
5. In this view of the matter the demand for the period prior to the date of issue of the show cause notice is not maintainable. Therefore, the demand is set aside as being barred by limitation.
6. In the result we uphold the classification of the goods under TI 14E as ordered. However, we set aside the demand for duty on the ground of limitation. The appeal is disposed of in the above terms.