Custom, Excise & Service Tax Tribunal
Fresenius Kabi India Pvt Ltd vs Commissioner Of Customs (Import), ... on 5 May, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal Nos. C/9 to 13/02 (Arising out of Order-in-Appeal No. 394 to 398/2001-MCH dated 04.10.2001 passed by Commissioner of Customs (Appeals), Mumbai.) For approval and signature: Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K.Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Fresenius Kabi India Pvt Ltd Appellant (Represented by: Mr M.P. Baxi, Advocate) Vs Commissioner of Customs (Import), Mumbai Respondent (Represented by:Mr B.P. Pereira, SDR) CORAM:
Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K.Gaule, Member (Technical) Date of Hearing : 05.05.2010 Date of Decision: 05.05.2010 ORDER NO..
Per: P.G. Chacko
1. In these appeals filed by the assessee, the short question which arises for consideration is whether the goods imported by them in 1999 and 2000 and described in the relevant Bills of Entry as Intravenous Amino acid attracted the benefit of Notification No 20/99-Cus dated 28.2.1999 (Ser No. 50 read with List 2) and No. 16/2000-Cus dated 1.3.2000 (Ser No. 80 read with List 2). The relevant entry under either of the Notifications read thus: Life saving drugs/medicines including their salts and esters and diagnostic text kits specified in List 2. Item No. 100 under List 2 annexed to each Notification was Intravenous Amino acids. The goods involved in appeal C/13/02 was imported under brand name Vamin-G, whereas the one involved in the rest of the appeals was imported under the brand name Aminomix. As it appears from the records, irrespective of the brand names, the commodity was composed of a mixture of Amino acids, glucose (carbohydrate) and electrolytes. The original authority, in adjudication of the relevant show-cause notices, held that the benefit of the notification would be available only to Intravenous Amino acid free from carbohydrates, electrolytes etc. Consequently, the assessee was denied the benefit of the notifications and was directed to pay duty at normal rate. In the appeals filed by the assessee against the Orders-in-Original, the learned Commissioner (Appeals) upheld the above view and also relied on the Boards Circular No 45/2000-Cus dated 16.5.2000, wherein it had been clarified that the benefit of concessional rate of duty in terms of serial No. 50 of the Table annexed to Notification No 20/99-Cus was not to be extended to Intravenous Amino acids admixed with carbohydrates and electrolytes. The present appeals of the assessee are directed against the Appellate Commissioners order.
2. The learned Counsel for the appellant submits that mere presence of carbohydrates and electrolytes or other ingredients in admixture with Intravenous Amino acids would not take the amino acids out of the purview of any of the notifications. He has referred to what appears to be medical literature on amino acids. He submits that amino acids are the chief ingredients of the imported goods and that the same are accepted to be a source of proteins. In the absence of electrolytes and carbohydrates etc, a part of the amino acids would be consumed as a source of energy for the synthesis of proteins from amino acids. In order to ensure that the amino acids are entirely used up in synthesis of proteins which are essential for patients undergoing medical treatments, carbohydrates and electrolytes are included as sources of energy, which is essential for the synthesis of proteins from amino acids. According to the learned Counsel, by reason of the amino acids having been in admixture with carbohydrates and electrolytes as source of energy, the amino acids should not be denied the benefit of the notifications. In this connection, the learned Counsel relies on the Tribunals decision in Commissioner of Customs, Chennai vs Tablets (India) Ltd 2005 (191) ELT 280 (Tri-Chennai), wherein the benefit of Notification No. 17/2001-Cus was extended to Intravenous Amino acids manufactured out of bulk drugs imported by the party. The Tribunal held that the presence of sorbitol or glucose alongwith amino acids so manufactured by the importer did not make the product other than amino acids. The learned Counsel further submits that the Civil Appeal filed by the department against the Tribunals decision in the case of Tablets (India) Ltd vs Commissioner was dismissed as reported in 2006 (198) ELT A 36 (SC). The learned Counsel has also claimed support from the Supreme Courts decision in Union of India and others vs TISCO Ltd 1977 E.L.T. (J-61) and the Tribunals decision in Farida Classic Shoes Ltd 2000 (123) ELT 748 (Tri), to his submission that, if the legislative intent behind the notification was to exclude carbohydrates, electrolytes etc from the purview of the Entry at Serial No 100 in List 2 annexed to the notifications, words like exclusively, only, wholly etc would have been employed. In the case of TISCO Ltd, the benefit of a notification ( No. 30/60) was extended to duty-paid pig iron mixed with other non-duty-paid materials, even though the item specified under the notification was duty-paid pig iron. In the case of Farida Classic Shoes Ltd, the benefit of Notification No. 49/86-CE as amended was extended to heels and soles of shoes, cleared by the assessee, after holding the view that the mere presence of rubber sheets affixed to the heel portion of the heels and soles would not take the goods out of the purview of the relevant entry (components of footwear, intermediate heels and soles and heels combinedly made of wood or leather.) The learned Counsel has argued that, in view of the case law cited by him, the benefit of Notification No 20/99-cus (Ser. No. 50) and the benefit of Notification No. 16/2000 (serial No. 80) are to be extended to the goods in question.
3. The learned JDR, on the other hand, submits that the relevant entry Intravenous Amino acid should be literally understood and accordingly the amino acid admixed with other materials should not be given the benefit of the notifications as clarified in the Boards Circular No 45/00 ibid. He has made an attempt to distinguish the case of Tablets (India) Ltd by submitting that, in that case, the importer had claimed the benefit of concessional rate of duty under an entry different from the one claimed by the assessee in the present case. In his rejoinder, the learned Counsel has claimed that the appellants case is on a stronger footing vis-`-vis Tablets (India) Ltd (supra). In answer to a query from the Bench, the learned Counsel has also pointed out that the appellant has been clearing the same goods on payment of appropriate duty without claiming the benefit of the relevant Notifications after the imports in question.
4. After careful consideration of the submissions, we have found a case for the appellant. Admittedly, the goods in question was composed of Intravenous Amino acids alongwith glucose (carbohydrate) and a variety of electrolytes. It is not in dispute that the goods were imported for intravenous application. It is again not in dispute that intravenous amino acids in the imported goods were life saving drugs. Such life saving drugs were covered under Serial No 50 (A) of Notification No. 20/99-Cus and Serial No 80 (A) of Notification No. 16/2000-Cus. The controversy is with regard to the presence of glucose (carbohydrate) and electrolytes in admixture with amino acids. From the scientific literature produced by the learned Counsel, it appears that these amino acids, when administered to a patient intravenously, would be used up in the synthesis of proteins which are essential life saving nutrients for the patients. It further appears that, for such synthesis. energy is required, which is supplied by the biochemical processes involving carbohydrates and electrolytes. It would thus appear that the amino acids would optimally benefit patients in the presence of carbohydrates, electrolytes etc. The functional ingredient, however, is Introvenous amino acid. Apparently, the benefit of the notification is available to these intravenous amino acids. In the case of Tablets (India) Ltd, the Tribunal held that the benefit would still be available even if sorbitol or glucose was also present alongwith amino acids. The decision of the Tribunal stood upheld when the Civil Appeal filed by the department was dismissed by the apex court. We have also found a parallel between this case and the case of TISCO cited by the learned Counsel. In the cited case, the question was whether the benefit of Notification No. 30/60 was available to duty-paid pig iron mixed with non-duty-paid materials. The notification, in its terms, extended the benefit to duty-paid pig iron. The Honble Supreme Court took the view that the benefit was not available exclusively or only to duty-paid pig iron inasmuch as expressions like exclusively, only etc were not used in the above notification. In the result, the benefit of the notification was extended to duty-paid pig iron mixed with non-duty-paid materials.
We find a parallel between case considered by the apex court and the one which we are considering.
5. It is settled law that, where there is a conflict between the Tribunals decision and a circular of the Board, the former shall prevail. In the present case, the Tribunals decision in Tablets (India) Ltd (supra) was upheld by the Supreme Court and, therefore, the view taken in that case should prevail over what was clarified by the Board in Circular No. 45/2000 ibid.
6. In the result, we set aside the impugned order and allow these appeals, but with the rider that this decision of ours shall not be a precedent for any period subsequent to the period of the subject imports.
(Pronounced in Court.) (S.K.Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) rk 6