Customs, Excise and Gold Tribunal - Delhi
Griffon Laboratories Pvt. Ltd. vs Collector Of Customs on 16 May, 1988
Equivalent citations: 1989(41)ELT613(TRI-DEL)
ORDER
S.D. Jha, Vice-President (J)
1. The question arising for decision in this appeal by the importer is classification under Central Excise Tariff for the purpose of additional duty of customs of TRITHIOPARAME THOXYPHENYL PROPENE Powder (TPP Powder) - whether they fall under T.I. 14E CET Patent or Proprietary Medicines as claimed by the appellant importer or residuary Tariff Item 68 as held by the lower authorities and in the alternative whether consequent to classification under residuary Tariff Item 68 the appellants are eligible to claim benefit of exemption under Notification 234/82-C.E., dated 1-11-1982 in respect of the goods imported.
2. The appellants vide Bill of Entry imported TPP Powder - a bulk drug. There is no dispute about basic customs classification. The dispute is only about classification for purposes of additional duty as set out above. It appears that at the time of import itself the appellants claimed under classification...for additional duty under T.I. 14E but the Assistant Collector held the goods as properly classifiable under T.I. 68 vide his order dated 18-7-1984. Classification under T.I. 14E would have entitled the appellants to claim set-off of duty under Rule 56A of the Central Excise Rules, 1944 but the same would not have been available on classification under T.I. 68. The appellants then approached the Hon'ble High Court of Bombay and the High Court by interim order dated 6-8-84 directed clearance of the powder to be allowed under Tariff Item 14E. The appellants were also directed in the meanwhile to avail of departmental remedy in respect of classification in dispute. The High Court gave certain other directions which are not material for this appeal.
3. At the hearing of the appeal Shri Jagtiani, Advocate for the appellants and Shri Sunder Rajan, JDR for the respondent were heard and the papers perused.
4. Shri Jagtiani invited attention to definition of Patent or Proprietary Medicines as set out in Explanation I to Tariff Item 14E reproduced below:
"Explanation 1. - 'Patent or Proprietary Medicines' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of or for the prevention of ailments in human beings or animals which bears either on itself or on its container or both, a name which is not specified in a monograph in a pharmacopoeia, formulary or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is, a name or a registered trade mark under the Trade and Merchandise Act, 1958 (43 of 1958) or any other mark such as a symbol, monogram, label, signature or invented words of any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as proprietor or therwise to use the name or mark with or without any indication of the identity of that person."
and argued that TPP Powder imported by the appellants is a drug or medicinal preparation used for prevention of ailments. It is used directly in the manufacture of Hepasul-fol & Hepasulfol AA Tablets. The powder retains exactly the same medicinal value when manufactured into tablets and the ultimate product tablets only differ in shape and form from TPP Powder. TPP Powder satisfies the condition in the Explanation as it is not mentioned in a monograph in a pharmacopoeia, formulary or any other publication notified in the Official Gazette. In the alternative he argued that if the goods are held classifiable under T.I. 68 the benefit of exemption Notification 234/82-C.E., dated 1-11-1982 as amended Serial No. 21 "All bulk drugs, medicines and drug-intermediates not elsewhere specified" should be granted to the appellants with consequential relief.
5. Shri Sunder Rajan submitted that the classification under residuary Tariff Item 68 done by the lower authorities was perfectly in order.
6. As for the alternative claim under Notifn. 234/82, dated 1-11-82 he submitted that the claim was not made earlier and in dispute about classification it could not be raised as an additional ground. For this argument he relied on the following decisions :
1. Ahmed Comerbhoy Mills v. Union of India and Anr. - (1986)7 ECC 190.
In this decision Bombay High Court held that at the stage of writ appeal the petitioners could not be allowed to raise the contention that vegetable tallow was not a vegetable product falling under Item 13 of the First Schedule to the Act, but was a vegetable non-essential oil falling under Item 12 of the First Schedule especially when there was no material on record to decide the classification in dispute.
2. Indian Vegetable Products Limited v. Union of India and Ors. - 1985 (22) ELT 406 (Bom.).
In this decision the High Court held that if the appellants in the appeal before the High Court had throughout the proceedings before the Customs authorities as well as before the Trial Court proceeded on the basis that the hardened oil manufactured by them is a vegetable product falling under Item 13 of Central Excise Tariff it was not open to them to contend subsequently that hardened oil produced by them is not classifiable as vegetable product under Item 13 ibid.
7. There is no dispute that TPP Powder was imported by the appellants as bulk drug. We have reproduced above Explanation I to Item No. 14E. It would be seen that for classification under the item it is not merely sufficient that the product should be a drug or medicinal preparation for treatment of prevention of ailments in human beings or animals but there are certain further requirements like the product itself or on its container or with having a name not specified in a monograph, pharmacopoeia and the like mentioned in the notification but bulk drug imported by the appellants in powder form could not in the very nature of things fulfil this part of requirement of the Explanation, even if as argued by the appellants brand name were read disjunctively. Thus viewed no infirmity can be found with the impugned order holding that bulk a drug imported by the appellants was not a patent or proprietary medicines within the meaning of Tariff Item 14E and therefore, properly classifiable under Tariff Item 68.
8. Coming to the next and alternative ground raised by Shri Jagtiani, we have given our most anxious and thoughtful consideration to this aspect of the matter. Notification 234/82-C.E., dated 1-11-1982 is an unconditional exemption notification and there being no dispute that what is imported by the appellants is a bulk drug it would be eligible to benefit of exemption under the notification. The question to be seen is whether the benefit should be denied for the mere reason that the appellants claimed classification under Tariff Item 14E and not T.I. 68. Shri Sunder Rajan contends that the question of claiming exemption under Notification 234/82 was not agitated by the appellants before the lower authorities and that cannot be urged now. The appellants had claimed classification under Tariff Item 14E and the notification is not applicable to goods falling under Item 14E. The Revenue resisted the plea on the ground that goods properly fell under Item 68. That plea has been accepted by the lower authorities and by...us. Revenue cannot approbate and reprobate or blow hot and cold in the same breath. The natural corollary flowing from classification under Tariff Item 68 claimed by the Revenue and upheld by the lower authorities and by us is that benefit of exemption aforesaid is available to the appellants. In the situation aforesaid there is no question of the claim being time-barred or belated. The benefit of exemption flows from the stand taken by the Revenue and not from the stand urged by the appellants. It is also well settled that plea as to classification if necessary facts be thereon record can be taken up at any stage. Besides sub-section (3) of Section 27 is itself clear that where, as a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf. This would mean that limitation would not apply in the aforesaid situation. We, therefore, accept the alternative claim of the appellants for benefit of exemption under Notification 234/82-C.E., dated 1-11-1982.
9. The appeal is disposed of in the foregoing terms and is allowed.