Customs, Excise and Gold Tribunal - Delhi
Nath Bros. Exim International Ltd. vs Collector Of Customs on 18 October, 1990
Equivalent citations: 1991(53)ELT42(TRI-DEL)
ORDER K.S. Venkatramani, Member (T)
1. The appellants herein imported a consignment of Amidotrizoic Acid USP which was cleared on payment of duty on 2-2-1985 on being assessed to duty under Heading 29.01/45(10) of the Customs Tariff Act, 1975 as Acids not elsewhere specified. Subsequently, the appellants filed a refund claim on 4-4-1985 for Rs... inter alia, on the ground that Amidotrizoic Acid USP is a drug as confirmed by the Assistant Drug Controller by his endorsement on the reverse of the Bill of Entry...countervailing excise duty purpose ...had given the benefit of excise exemption...the goods as drug. They claimed lower duty on the classification under Heading 29.01/45(13) as Pharmaceutical chemicals. The claim, however, was rejected by the Deputy Collector of Customs (Refunds), Bombay C. H. by his order dated 29-9-1986 saying that no evidence has been produced that the material has sole or predominant use as drug only for the purposes of classification under Heading 29.01/45(13) CTA. The appeal against the Assistant Collector's order was rejected by the Collector of Customs (Appeals), Bombay by his order dated 6-5-1988 holding that the original assessment has been done on the basis of the markings on the goods for description and examination of the goods, and on the basis of Assistant Drug Controller's opinion on the reverse of the original B/E, which the Collector (Appeals) found was in order. The present appeal is against this order.
2. Shri Nankani, the Ld. Counsel appearing for the appellants submitted that the Collector (Appeals) has misdirected himself in passing the impugned order. The question to be decided by him was whether it was necessary to show the sole or predominant use of the goods as drug for being classified under Heading 29.01/45(13) CTA since that was the ground on which the Dy. Collector (Refunds) had rejected their claim. The Ld. Counsel referred to the Assistant Drug Controller's report on the original B/E now produced by the Ld. S.D.R. to say that the A.D.C. in his report has certified that the material can be used for diagnosis in radiology and that it is a drug. The material according to the appellants should be considered as a drug by the very fact that it conforms to USP standards, and it is also significant that the CM. itself has considered it as a drug for CVD exemption under Cx. Notification 234/82. The Ld. Counsel also relied upon extract of the Martindale Extra Pharmacopoeia 27th Edition wherein it has been stated that diotrizoiates are used as contrast media in diagnostic radiology. It was, therefore, pleaded that the goods are correctly classifiable as pharmaceutical chemicals under Heading 29.01/45(13) CTA eligible for exemption under Notification 33/83 as claimed in their refund application.
3. Shri Jayaraman, the Ld. S.D.R. contended that the A.D.C.'s report only said that the material was a diagnostic aid, which is different from saying it is a therapeutic drug. He pointed out that Heading 29.01/45(13) covers only pharmaceutical chemicals having prophylactic or therapeutic value and used solely or predominantly as drugs. Extending exemption under Excise Notification 234/82 also will not advance their case as there is an Explanation in that Notification regarding bulk drugs much wider in scope than Heading 29.01/45(13) CTA.
4. The submissions made by both the parties herein have been carefully considered. The question is whether the goods imported Amidotrizoic acid is correctly classifiable under Heading 29.01/45(13) CTA and eligible for Notification 33/83. The description under Heading 29.01/45(13) is as follows :
"(13) Pharmaceutical chemicals that is, chemicals having prophylactic or therapeutic value and used solely or predominantly as drugs, not elsewhere specified." 100% 90% The exemption under Notification 33/83 at Sl. No. 5 to the Table of that notification is extracted below:
"Sub-heading No. (13) of Heading 29.01/45 60 per cent 50%"
To fall under Heading 29.01/45(13) CTA therefore it should be shown that the goods are (1) pharmaceutical chemicals (2) they have prophylactic or therapeutic value and (3) are used solely or predominantly as drugs and (4) are not elsewhere specified. Applying these criteria to Amidotrizoic Acid it is found that though it is indicated to be of USP standards for drugs, yet as per Martindale's The Extra Pharmacopoeia 27th Edition the material is mentioned as being used as a contrast media in diagnostic radiology and the preparations of this material are for use in intravenous urography, angiography, gastro intestinal examinations, etc. wherein the preparations containing diatrizoates are to be administered prior to radiological exposures. Will this amount to prophylactic or therapeutic value? According to New Websters Dictionery of English Language the word "prophylactic" means preventive, defending from or warding off disease, and the word "therapeutic" means curative. From what has been seen from the Extra Phamacopoeia Amidotrizoic Acid is used as a contrast media in diagnostic radiology only and there is no indication therein that it or its preparations by themselves have any curative value or are prescribed and administered as a preventive medicine. Only if this criterion is satisfied the material will be covered under Heading 29.01/45 (13) CTA. The A.D.C's endorsement on the original B/E merely says that the goods are drug conforming to USP and has not commented on the material with reference to its prophylactic or therapeutic value. As has been seen the material in fact finds use only as an diagnostic aid in radio- logy and there is no indication that it is by itself administered as a preventive or curative medicine. Grant of exemption under Notification 234/82 Cx. for CVD purposes will not advance the appellants' case as that notification exempts 'all bulk drugs and medicines not elsewhere specified' and the Explanation to the notification also says inter alia that 'bulk drug' in that notification means any chemical conforming to phar-macopoeial standards used for the diagnosis treatment mitigation of illness. Diagnostic chemicals of pharmacopoeial standards like the present import are clearly covered by the terms of the notification read with the Explanation thereto. It has also been argued before us that when once the goods satisfy the definition of drug as per Drugs and Cosmetics Act it has to be accepted so by Customs authorities also for classification under Customs Tariff Act. We find that same argument had been put forth before the Tribunal in the case of Allied Chemicals & Pharma v. CC - 1990 (48) ELT 124 wherein the Tribunal held that for claiming the benefit of Notification 33/83, the goods have to answer to the description of Heading 29.01/45(13). In that case the Tribunal held that sodium laurel sulphate is a drug aid and not a drug classifiable under Heading 29.01/45(13) and is for that reason also not eligible for exemption under Notification 33/83. The same reasoning will hold good in this case also wherein Amidotrizoic Acid is only diagnostic aid in radiology as a contrast media not having therapeutic or prophylactic value by itself, and as such cannot claim classification, under Heading 29.01/45(13) and will not be eligible for exemption under Notification 33/83. There is thus no reason to interfere with the orders passed by the lower authorities and the appeal is, therefore, rejected.