Customs, Excise and Gold Tribunal - Mumbai
Unimed Technologies Ltd. vs Commr. Of Customs (J.C.H.) on 8 June, 2006
Equivalent citations: 2005(191)ELT371(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. Appellants are engaged in manufacture of Pharmaceutical products. In June 2000 they imported at JNPT port the following items, in sets, from Germany.
(1) 5 ml or 10 ml. Dropper Bottles (2) Dropper Inserts (3) Tamper Proof Closures They claimed clearance of the goods under licence free conditions vide para 5.2 of Exim Policy. The clearance was denied by holding the goods to be restricted as per Heading 3923 30.00 ITC (HS) Classifications of Imports & Exports. Consequently the goods were held liable to confiscation under section 111(d) & a fine in lieu of such confiscation of Rs. 2 lakhs & penalty of Rs. 25,000/- under Section 112(a) was imposed. Hence this appeal.
2.1 The heading under which Revenue classifies for purpose of ITC Policy reads as 3923 30.00 "Carboys, bottles, flasks and similar Articles" being in a set the goods in question are unlike conventional bottles they being imported in 3 pieces/parts. The dropper "bottle" is a container with the Dropper inserts & Closures, each part conforming to a certain specification to render them in totality to an "Eye drop delivery" entity. They are made from Lupolen & Hostalen plastics and are Gama irradiated, are, together to be used as inputs for manufacture of Eye drops delivery.
2.2 (a) The Commissioner found that heading 3923 30.00 specifically mention "bottles" as one of the items thereunder and heading 3923 30 90 is general entry and preferred 3923 39 39 being specific as applicable as goods were described as "Dropper Bottles" and on examination held the classification under 3923 30,00 & rejected the claim under 3923 30.90.
(b) The entry 3923 30.00 covers "Carboys, bottles, flasks and similar articles". Reading the same, the words 'Similar Articles" cannot be read as extending to "Eye Drop Delivery System" which collectively the imported entity would be or to Dropper inserts and or Tamper proof closure which are Two Thirds of the entity under classification consideration & give the essential characteristic to the entire import. They also need to be classified; classification of these droppers & tramper proof closers, as bottle, carboys etc, cannot be upheld. An injection-vial although apparently containing 5 ml or less or thereabouts of a pharmaceutical, is not called and understand to be a "bottle flask or Carboy", by people who deal with the same, if it is known and understood as and 'injection-vial' and not a bottle. Merely because part of import of an item is loosely described as "5ml/10ml bottle", as in this case, it cannot be understood and fixed for classification under the heading bottle by taking out one third of the set, it comprises with the two third of the other entities & their term the entire import as of "bottle". "For purposes of classification" under a tax statute or the Exim lists, commercial understanding would be more relevant to fix a classification unless the word "bottle" is otherwise defined, no material is on record to show how the entire entity under import as set is understood by people dealing with the same except that it is an "Eye Drops delivery system". It is found that in the present case, to arrive at classifying the entity, under import, except the invoice there is no other material. If a part of an 'EYE DROPS SYSTEM' in such an invoice is termed "5 ml/10 ml dropper "bottles" then it is to be understood as nothing but description of part or the reservoir for the medicament of that quantity for containing medicament in tandem with essential effect for dispensation of & as an antiseptic 'EYE DROPS'; that will not and cannot call for the entity under import to be classified as arrived at by the Id. Commissioner. The entity is more than a container the essential purpose, is the aseptic nature of packaging, for dispensing "eye drops" in aseptic measured doses. Such "essential purpose" as that of and 'Eye drop dispenser' and not a storage container/bottle carboy or flask for storage. This aspect has to be given consideration to arrive at a classification. Invocation of 'Ejusdem generis' for a mechanism, for dispensing measured doses of eye drops, when all the components under import are taken together cannot be made to place it with' bottle all sorts'; would call for classification of the 'packaged delivery system' as "others" i.e. other than what are to be classified as & what are commonly understood as entities for containers which would fall under Carboys, bottles, flasks & the like. Classification of such specialized package/containers delivery system would appropriately be under 3923 30 90 as "others" applying the later the better principle of classification, stipulated by the Rules for Interpretation of the Tariff read with the essential character stipulation in these rules. When the intend purpose & use is more than that of a bottle, the specific classification under 3923 30.00 for bottles & other Container has to give way to entry of "3923 30.90 - others" if that is not done then that entry i.e. 3923 30.90 may become redundant, which cannot be the purpose or result of an interpretation.
2.3 We would therefore upheld the classification 3923 30.90 which does not need a licence for import. The liability to confiscation under Section 111(d) is therefore not upheld. Hence penalty is also to be set aside.
3.1 Consequent to the findings, the order of confiscation and penalty is set aside and appeal allowed.
(Pronounced in Court on 8-6-2006)