Full Judgment Text
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CASE NO.:
Appeal (civil) 1076-1080 of 2002
PETITIONER:
M/s. Span Diagnostics Ltd
RESPONDENT:
Commissioner of Central Excise, Surat
DATE OF JUDGMENT: 30/04/2007
BENCH:
S.H. KAPADIA & B. SUDERSHAN REDDY
JUDGMENT:
J U D G M E N T
WITH
Civil Appeal No.5322 of 2002
M/s. J. Mitra & Co. Ltd. \005 Appellant
Versus
Commissioner of Central Excise, Delhi \005Respondent
AND
Civil Appeal Nos.1953-54 of 2003
Commissioner of Central Excise, New Delhi \005 Appellant
Versus
M/s. J. Mitra & Co. Ltd. & another \005 Respondents
Kapadia, J.
From the impugned judgment dated 1.1.2002
delivered by the Customs, Excise and Gold (Control)
Appellate Tribunal (’CEGAT’, for short), New Delhi, vide
Appeal No.E/1644 and 1645 of 2000-C, C.A. No.5322 of
2002 and C.A. No.1953-54 of 2003 have been filed by
the assessees and by the Department respectively. For
the sake of convenience and clarity we proceed to decide
each of the following civil appeals serially.
C.A.No.5322/2002\026filed by M/s. J. Mitra & Co.Ltd. (Assessee)
In this civil appeal we are concerned with the
classification of biotech products.
The said assessee was engaged in the manufacture
of blood-grouping reagents and diagnostic and laboratory
reagents. It had obtained registration on 10.9.99 for the
manufacture and clearances of the following products:
(1) Anti-A Mono Clonal
(2) Anti-B Mono Clonal
(3) Anti-Decoders Mono Clonal
(4) Anti-Decoders Mono Clonal
(5) Anti-Decoders 1gM Mono Clonal
(6) Anti-Decoders 1gG Mono Clonal
The above six items are called Monoclonal
Antibodies (for short, ’MABs’). They were classified by the
assessee under Chapter Sub-heading 3002.00 (Chapter
Heading 30.02) of Central Excise Tariff Act (for short,
’CETA’) whereas the Department classified the MABs
under CSH 3005.90 (Chapter Heading 30.05) of CETA.
The assessee classified MABs as "cultures of micro-
organisms" whereas the Department classified the said
MABs as "pharmaceutical products, not elsewhere
specified or included".
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The CEGAT (Tribunal), vide the impugned
judgment, upheld the classification of MABs under CSH
3005.90 of CETA as claimed by the Department, hence
this civil appeal is filed by the assessee.
For the sake of convenience, we quote hereinbelow
Chapter Note 3 in Chapter 30 of the CETA concerning
pharmaceutical products which reads as under:
"CHAPTER 30
PHARMACEUTICAL PRODUCTS
Notes :
1. and 2. xxx xxx xxx
3. Heading No.30.05 applies only to the
following, which are to be classified
in that heading and in no other
heading of this Schedule:-
(a) to (d) xxx xxx xxx
(e) Blood grouping reagents;
(f) to (h) xxx xxx xxx"
We quote hereinbelow Chapter Heading 30.02 and
CSH 3002.00 of CETA which read as under:
"CHAPTER 30
PHARMACEUTICAL PRODUCTS
Notes : 1. to 5. xxx xxx xxx
Heading
No.
Sub-heading
No.
Description of goods
Rate of
duty
(1)
(2)
(3)
(4)
30.02
3002.00
Antisera and other blood
fractions; Vaccines, Toxins,
Cultures of micro-organisms
(including ferments but
excluding yeasts) and similar
products
Nil
We quote hereinbelow Chapter Heading 30.05 in
entirety of CETA which reads as under:
"CHAPTER 30
PHARMACEUTICAL PRODUCTS
Notes : 1. to 5. xxx xxx xxx
Heading
No.
Sub-heading
No.
Description of goods
Rate of
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duty
(1)
(2)
(3)
(4)
30.05
Pharmaceutical goods, not
elsewhere specified
3005.10
Chemical contraceptives
Nil
3005.20
Dental cements and other dental
fillings
15%
3005.90
Others
15%
We also quote hereinbelow relevant extracts of
Chapter Note No.2 in Chapter 30 of HSN (Second Edition)
which read as follows:
"CHAPTER 30
PHARMACEUTICAL PRODUCTS
Chapter Notes.
1. xxx xxx xxx
2. For the purposes of heading No.30.02,
the expression "modified immunological
products" applies only to monoclonal
antibodies (MABs), antibody fragments,
antibody conjugates and antibody
fragment conjugates."
We also quote hereinbelow Chapter Heading 30.02
in entirety from the said HSN which reads as under:
"30.02 \026 HUMAN BLOOD; ANIMAL BLOOD
PREPARED FOR THERAPEUTIC, PROPHYLACTIC
OR DIAGNOSTIC USES; ANTISERA AND OTHER
BLOOD FRCTIONS AND MODIFIED IMUNOLOGICAL
PRODUCTS, WHETHER OR NOT OBTAINED BY
MEANS OF BIOTECHNOLOGICAL PROCESSES;
VACCINES, TOXINS, CULTURES OF MICRO-
ORGANISMS (EXCLUDING YEASTS) AND SIMILAR
PRODUCTS.
3002.10 \026 Antisera and other blood fractions
and modified immunological
products, whether or not obtained by
means of biotechnological processes
3002.20 \026 Vaccines for human medicine
3002.30 \026 Vaccines for veterinary medicine
3002.90 \026 Other
This heading covers:
(A) Human blood (e.g., human blood in sealed
ampoules).
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(B) Animal blood prepared for therapeutic,
prophylactic or diagnostic uses
Animal blood not prepared for such uses falls in heading
05.11.
(C) Antisera and other blood fractions and modified
immunological products.
These products include:
(1) Antisera and other blood fractions.
Sera are the fluid fractions separated from
blood after clotting.
The heading covers, inter alia, the
following products derived from blood:
"normal" sera, human normal
immunoglobulin, plasma, fibrinogen,
fibrin, blood globulins, serum globulins
and haemoglobin. The heading also
includes blood albumin (e.g., human
albumin obtained by fractionating the
plasma of whole human blood), prepared
for therapeutic or prophylactic uses.
Antisera are obtained from the blood of
humans or of animals which are immune
or have been immunized against diseases
or ailments, whether these are caused by
pathogenic bacteria and viruses, toxins or
allergic phenomena, etc. Antisera are
used against diphtheria, dysentery,
gangrene, meningitis, pneumonia,
tetanus, staphylococcal or streptococcal
infections, snake bite, vegetable poisoning,
allergic diseases, etc. Antisera are also
used for diagnostic purposes, including in
vitro tests. Specific immunoglobulins are
purified preparations of antisera.
The heading does not cover blood albumin not
prepared for therapeutic or prophylactic uses
(heading 35.02) or globulins (other than blood
globulins and serum globulins) (heading 35.04).
The heading also excludes medicaments which are
not separated from the blood but which in some
countries are described as "sera" or "artificial sera";
they include isotonic solutions based on sodium
chloride or other chemicals and suspensions of
pollen which are used against allergic diseases.
(2) Modified immunological products,
whether or not obtained by means of
biotechnological processes.
Products whose antigen-antibody reaction
corresponds to natural antisera and which
are used for diagnostic or therapeutic
purposes and for immunological tests are
to be regarded as falling within this
product group. They can be defined as
follows:
(a) Monoclonal antibodies (MABs) \026
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specific immunoglobulins from
selected and cloned hybridoma cells
cultured in a culture medium or
ascites.
(b) Antibody fragments \026 parts of an
antibody protein obtained by means of
specific enzymatic splitting.
(c) Antibody and antibody fragment
conjugates - enzymes (e.g., alkaline
phosphatase, peroxidase or
betagalactosidase) or dyes (fluorescin)
covalently bound to the protein
structure are used for straightforward
detection reactions.
(D) Vaccines, toxins, cultures of micro-organisms
(excluding yeasts) and similar products.
These products include:
(1) Vaccines \026 preparations of microbial
origin containing either viruses or bacteria
suspended in saline solutions, oil (lipovaccines)
or other media. These preparations have
usually been treated to reduce their toxicity
without destroying their immunising properties.
The heading also covers mixtures (such as
Diphtheria, Tetanus and Pertussis (DPT)
vaccine) consisting of vaccines and toxoids.
(2) Toxins (poisons secreted by bacteria),
toxoids, crypto-toxins and anti-toxins, of
microbial origin.
(3) Cultures of micro-organisms (excluding
yeasts). These include ferments such as
lactic ferments used in the preparations of
milk derivatives (kephir, yogurt, lactic
acid) and acetic ferments for making
vinegar; moulds for the manufacture of
penicillin and other antibiotics; and
cultures of micro-organisms for technical
purposes (e.g., for aiding plant growth).
Milk or whey containing small quantities of lactic
ferments is classifiable in Chapter 4.
(4) Virus, human, animal and vegetable and
anti-virus.
(5) Bacteriophage.
The heading also includes diagnostic
reagents of microbial origin, other than
those provided for in Note 4 (d) to this
Chapter \026 see heading 30.06. It does not
cover enzymes (rennet, amylase, etc.) even
if of microbial origin (streptokinase,
streptodornase, etc.) (heading 35.07) nor
dead single-cell micro-organisms (other
than vaccines) (heading 21.02).
The products of this heading remain classified
here whether or not in measured doses or put up for
retail sale and whether in bulk or in small packings."
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We also quote hereinbelow Chapter Heading 30.06
of HSN which is equal to Chapter Heading 30.05 in CETA
and which reads as under:
"30.06 \026 PHARMACEUTICAL GOODS SPECIFIED
IN NOTE 4 TO THIS CHAPTER.
3006.10
Sterile surgical catgut, similar sterile suture materials
and sterile tissue adhesives for surgical wound closure;
sterile laminaria and sterile laminaria tents; sterile
absorbable surgical or dental haemostatics
3006.20
Blood-grouping reagents
3006.30
Opacifying preparations for X-ray examinations;
diagnostic reagents designed to be administered to the
patient
3006.40
Dental cements and other dental fillings; bone
reconstruction cements
3006.50
First-aid boxes and kits
3006.60
Chemical contraceptive preparations based on
hormones or spermicides
This heading covers only the following goods:
(1) Sterile surgical catgut, similar sterile suture
materials and sterile tissue adhesives for
surgical wound closure.
This item covers all kinds of ligatures for
surgical sutures, provided they are
sterile. These ligatures are usually put
up in antiseptic solutions or in sealed
sterile containers.
The materials used for such ligatures
include:
(a) catgut (processed collagen from the
intestines of cattle, sheep or other
animals);
(b) natural fibres (cotton, silk, linen);
(c) synthetic polymer fibres, such as
polyamides (nylons), polyesters;
(d) metals (stainless steel, tantalum,
silver, bronze).
The item also covers tissue adhesives
such as those consisting of butyl
cyanoacrylate and a dye; after
application, the monomer polymerises
and the product is therefore used in place
of conventional suture materials for
closing internal for closing internal or
external wounds of the human body.
The heading excludes non-sterile suture materials. These
are classified according to their nature e.g. catgut
(heading 42.06), silkworm put, textile yarns, etc. (Section
XI), metal were (Chapter 71or Section XV).
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(2) Sterile laminaria and sterile laminaria
tents.
This item is restricted to sterile laminaria
and sterile laminaria tents (small
lengths of algae, sometimes brown and
with a rough grooved surface). They swell
considerably on contact with moist
substances and become smooth and
flexible.
They are therefore used in surgery as a
means of dilation.
Non-sterile products are excluded (heading 12.12)
(3) Sterile absorbable surgical or dental
haemostatics.
This item covers sterile products used in
surgery or dentistry to stop bleeding and
having the property of being absorbed by
the body fluids. It includes oxidized
cellulose, generally in the form of gauze of
fibres ("wool"), in pads, pledgets or strip,
gelatin sponge or foam; calcium alginate
gauze, "wool" or "film".
(4) Blood-grouping reagents.
The reagents under this heading must be
suitable for direct use in blood-grouping.
They are either sera of human or animal
origin, or vegetable extracts of seeds or
other parts of plants (phytagglutinins).
These reagents are used in the
determination of blood-groups by
reference to the characteristics of the
blood corpuscles or of the blood serum.
In addition to the active principle(s), they
may contain substances to strengthen
their activity or stabilize them
(antiseptics, antibiotics, etc.).
A. The following are to be regarded as
reagents for determining blood-group
by reference to the characteristics of
blood corpuscles:
(i) Preparations for determining the A,
B, O and AB groups. A1 and A2 sub-
groups and Factor H.
(ii) Preparations for determining the M,
N, S and P groups and other groups
such as Lu, K and Le.
(iii) Preparations for determining the Rh
groups and C, F, V, etc. sub-groups.
(iv) Preparations for determining the
blood-groups of animals.
B. The preparations to be regarded as
reagents for determining the
characteristics of sera are those
used to determine:
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(i) characteristics of Gm, Km, etc.,
systems;
(ii) serum groups Gc, Ag, etc.
C. Anti-human globulin serum (Coombs
serum), which is essential in certain
blood-grouping techniques, is also to
be regarded as a reagent of this
heading."
D. xxx xxx xxx
5. to 8. xxx xxx xxx"
According to the assessee, MAB is produced by
hybridoma technology in which hybrids (fused cells) are
allowed to grow by multiplication in culture medium and
in that process they secrete the antibodies. According to
the assessee, these hybrids (fused cells) are micro-
organisms and as they grow in culture medium,
therefore, they are classifiable under CSH 3002.00 as
"cultures of micro-organisms". In this connection,
reliance is place on "Compendium of Transfusion of
Medicine" by Dr. R. N. Makroo. In his book Dr. R.N.
Makroo has stated that with advancement in
biotechnology, hybridoma technology has made available
a new source of reagents; that before the introduction of
hybridoma technology, the A.B.O grouping reagents were
derived from human donors with or without
immunization. According to Dr. Makroo, the main
reagent used in blood-bank laboratory is antisera (which
is an antibody). Essentially MAB, according to Dr.
Makroo, is obtained from cell culture. It helps in blood-
grouping. The development of MAB obtained from cell
culture secreting antibodies called hybridoma, has made
available a new source of blood-grouping reagents.
According to the assessee, Chapter Heading 30.05 of
CETA is the same as Chapter Heading 30.06 of HSN.
Under Chapter Heading 30.06, there is an Explanatory
Note in HSN which states that "blood-grouping reagents"
(which term also finds place in Chapter Note ’3’ to
Chapter 30 of CETA) are either the sera of human or
animal origin, or vegetable extracts of seeds or other
parts of plants and, therefore, such reagents fall under
Chapter Heading 30.05 of CETA. However, according to
the assessee, MAB is not the sera of human or animal
origin or vegetable extracts or plant extracts and,
therefore, it cannot fall under Chapter Heading 30.05 of
CETA and consequently it has to fall under Chapter
Heading 30.02 of CETA. According to the assessee, only
polyclonal antibodies are covered under Chapter Heading
30.05 whereas MABs are covered under Chapter Heading
30.02 as "culture of micro-organism".
According to the Department, on the other hand,
MAB is a "blood-grouping reagent" which is used in
hospitals for blood-grouping. These reagents, according
to the Department, are used in the determination of
blood-groups by reference to the characteristics of blood
corpuscles of blood-serum and, therefore, the said MAB
falls under Chapter Heading 30.05. According to the
Department, the said MAB has no therapeutic or
prophylactic value; that they are merely blood-grouping
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reagents and, therefore, they fall in Chapter Note ’3’
which states that all "blood-grouping reagents" fall under
Chapter Heading 30.05. On behalf of the Department, it
is further argued that on account of Note 3(e) to Chapter
30 of CETA, MAB can only be classified under Chapter
Heading 30.05 of CETA. According to the Department,
even in common parlance MAB is known as "blood-
grouping reagent" and, therefore, it falls under Chapter
Heading 30.05 of CETA. On behalf of the Department, it
is argued that in the present case we should not go by
HSN. According to the Department, HSN deals with
human blood, animal blood prepared for diagnostic uses;
antisera and other blood fractions and Modified
Immunological Products (for short, ’MIP’), whether or not
obtained by means of biotechnological process; vaccine,
toxin, cultures of micro-organisms and similar products
whereas Chapter Heading 30.02 of CETA does not deal
with items like human blood and MIP which items are
dealt with by HSN and, therefore, according to the
Department, in the present case, one should not rely
upon the Explanatory Note to HSN.
We find merit in the arguments advanced on behalf
of the assessee. There is no dispute that MAB is a blood-
grouping reagent. The question is : whether merely
because MAB is a blood-grouping reagent, should it be
classified under Chapter Heading 30.05 on account of
Note No.3(e) to Chapter 30 of CETA, even though MAB is
a "culture of micro-organism" falling under CSH 3002.00
(Chapter Heading 30.02). It is well-settled that the width
of the Heading under CETA cannot be expanded by
reading Note 3(e) to Chapter 30. In our view, MAB is a
"culture of micro-organism". It falls specifically under
Chapter Heading 30.02 of CETA. MAB is not a sera of
human or animal origin, it is not a vegetable extract, it is
not a plant extract and on the other hand it is obtained
by hybridoma technology (cellular fusion). Therefore, it
cannot fall under Chapter Heading 30.05 of CETA.
Moreover, Chapter Heading 30.05 is residuary. The
width of Chapter Heading 30.05 is restricted to products
which are mentioned in Note 3(e) to Chapter 30. In other
words, not all those pharma products which could not be
classified elsewhere in the tariff would fall under Chapter
Heading 30.05, but only those which are specified in Note
No.3 would fall under Chapter Heading 30.05. In the
present case, MAB specifically falls in Chapter Heading
30.02 as culture of micro-organism. If an item like MAB
is specifically falling in Chapter Heading 30.02, it cannot
be classified under Chapter Heading 30.05 merely on
account of Chapter Note ’3’. In the present case, the
Department seeks to expand the scope of Chapter
Heading 30.05, which is residuary, by relying upon Note
’3’ even when MAB falls under Chapter Heading 30.02 as
"culture of micro-organism". In the present case MAB is
not polyclonal, it is monoclonal and, therefore, it is
known as MAB. In the case of Inter Care Ltd. v.
Collector of Customs, New Delhi \026 1997 (89) ELT 545
(Tribunal) it has been held that polyclonal product would
fall under Chapter Heading 30.05. However, in the
present case, MAB is not polyclonal, it is monoclonal and
it is obtained by culture of micro-organism and,
therefore, it would fall under Chapter Heading 30.02
(CSH 3002.00). Our view is also supported by the
Explanatory Note in HSN to Chapter Heading 30.02
which refers to MIP. The said Note conclusively proves
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that MAB is a "culture of micro-organism" and, therefore,
it would fall under Chapter Heading 30.02. Lastly, even
the HSN Explanatory Note to Chapter Heading 30.06
corresponding to Chapter Heading 30.05 of CETA, shows
that MAB is excluded from Chapter Heading 30.05. That
Heading states that blood-grouping reagents, suitable in
blood-grouping, are sera either of human or animal origin
or vegetables’ extracts or plants’ extracts. In other
words, MAB which is not the sera of either human or
animal origin or vegetable or plant extracts, cannot fall
under Chapter Heading 30.05, particularly, when MAB is
a culture of micro-organism. There is one more aspect
which needs to be highlighted. In the HSN, we have
Chapter Heading 30.02 which refers to human blood;
animal blood; "antisera and other blood fractions and
MIP"; therefore, human blood is one item, animal blood is
another item whereas "antisera, blood fraction and MIP"
is the third item. Therefore, the third item forms one
separate class. In that class we have MIP which includes
MAB. Therefore, if one reads the third item as a separate
class as "antisera and blood fractions" then abridgement
of HSN entries by CETA cannot rule out MIP which
includes MAB. Therefore, when HSN treats antisera,
blood fractions and MIP including MAB as one class then
there is no contradiction between Chapter Heading 30.02
of CETA and Chapter Heading 30.02 of HSN. Therefore,
taking any view of the matter, HSN cannot be ruled out.
For the above reasons, we find merit in the civil
appeal filed by the assessee (Civil Appeal No.5322 of
2002) and, accordingly, we classify the above six items
under Chapter Heading 30.02 of CETA.
Accordingly, the said civil appeal is answered in
favour of the assessee and against the Department.
C.A.Nos.1953-1954/2003\026filed by the Department
The short question which needs to be decided in
these civil appeals is : Whether Beta Visipreg, Visipreg
Strip, Pregnancy Test Card fall as "antisera" under
Chapter Heading 30.02 of CETA (according to the
assessee) or whether it falls under Chapter Heading
38.22 of CETA as "diagnostic or laboratory reagent" (as
contended by the Department).
The above three products were cleared by the
assessee as Pregnancy Test Kits (PTK). According to the
assessee the above three products are for the detection of
hCG hormones in urine, as a test for pregnancy. The
three products are meant for in-vitro diagnostic use only.
According to the assessee, Chapter Heading 30.02 covers
antisera of all forms.
On the other hand, it was argued on behalf of the
Department that although PTK was an antisera, the
above three products were classifiable as diagnostic or
laboratory reagents under Chapter Heading 38.22 as they
were used exclusively in laboratory for diagnostic
purposes. According to the Adjudicating Authority,
Chapter Heading 30.02 applied only to crude antisera
and since the above three products were refined antisera,
they did not fall under Chapter Heading 30.02.
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At the outset, we quote hereinbelow Chapter
Heading 38.22 (CSH 3822.00) which reads as under:
"CHAPTER 38
MISCELLANEOUS CHEMICAL PRODUCTS
Notes:
1. to 3. xxx xxx xxx
Heading
No.
Sub-heading
No.
Description of goods
Rate of
duty
(1)
(2)
(3)
(4)
38.22
3822.00
Composite diagnostic or
laboratory reagents, other than
those of Chapter 30
20%
As stated above, Chapter Heading 30.02 refers to
antisera and other blood fractions. According to the
Explanatory Note in HSN (Seventh Edition), antisera is
obtained from the blood of humans or animals which are
immune against diseases. Antisera is used for diagnostic
purposes, including in-vitro tests. There is nothing like
crude antisera and refined antisera. In the present case,
even according to the Department, PTK is an antisera,
however, according to the Department, PTK is a refined
antisera. As stated, antisera falls under Chapter Heading
30.02. In the circumstances, "antisera" is covered by
Chapter Heading 30.02 and since it is covered by that
Heading, Chapter Heading 38.22 will not apply. If one
reads Chapter Heading 38.22, it becomes clear that there
could be diagnostic or laboratory reagents which could
fall under Chapter Heading 30.02 and also under
Chapter Heading 38.22. However, if a diagnostic or
laboratory reagent like antisera falls under Chapter
Heading 30.02 then it stands excluded from Chapter
Heading 38.22.
Before concluding we may record the statement
made on behalf of M/s. J. Mitra & Co. Ltd. that they have
closed down their business in producing the following
two items, namely, Syphilis RPR (VDRL) and Salmonella
Antigens. Hence, they do not seek to press the
classification issue concerning the said two items.
Hence we answer C.A. No.1953-54 of 2003, filed by
the Department, in favour of the assessee and against
the Department.
For the above reasons, the assessee succeeds on
Item Nos. 1 to 9, mentioned at page No.5 of the paper
book in C.A.Nos.1953-54/2003 and, therefore, the
Department was not entitled to invoke the extended
period of limitation under Section 11A of the Central
Excise Act, 1944.
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C.A.Nos.1076-1080/2002 \026 filed by M/s. Span Diagnostics
Ltd. (assessee)
These civil appeals are filed by M/s. Span
Diagnostics Ltd. (assessee) under Section 35(L) of the
Central Excise Act, 1944, against the decision of the
CEGAT (for short, ’Tribunal’) dated 4.12.2001.
In these civil appeals we are concerned with Item
Nos.21 to 32, referred to in Annexure A to the paper book
(at pages 27-28), Item Nos.35, 36 and 37 in Annexure A
to the paper book (at pages 27-28) and Item Nos.1 to 15
in Annexure B to the paper book (at page 29).
At the outset we quote hereinbelow Item Nos.21 to
32 of Annexure A which read as under:
"ANNEXTURE- ’A’
Name of the products which will fall under chapter sub-heading
3005.90
--------------------------------------------------------
Sr. Code No. Item Pkg.
No.
--------------------------------------------------------
21. 11127A Anti-A (Monoclonal) 5 ML
22. 11127B Anti-A (Monoclonal) 10 ML
23. 11127C Anti-A (Monoclonal) 3x5 ML
24. 11128A Anti-B (Monoclonal) 5 ML
25. 11128B Anti-B (Monoclonal) 10 ML
26. 11128C Anti-D (Monoclonal lgG+lgM) 3x5 ML
27. 11129A Anti-D (Monoclonal IgM) 5 ML
28. 11129B Anti-D (Monoclonal IgM) 10 ML
29. 11129C Anti-D (Monoclonal IgM) 3x5 ML
30. 11130A Anti-D (Monoclonal IgG + IgM) 5 ML
31. 11130C Anti-D (Monoclonal IgG + IgM) 3x5 ML
32. 11131A Anti-A, B & D (Mono. IgM) 3x5 ML
------------- ---------------------------------------
It is not in dispute that above Item Nos.21 to 32 are
identical to Item Nos.1 to 6 in C.A. No.5322 of 2002 -
filed by M/s. J. Mitra and Co. (assessee).
In the circumstances, we hold for the above reasons
that Item Nos.21 to 32 would fall under Chapter Heading
30.02 of CETA. Accordingly, the assessee succeeds in
this regard.
As regards Item Nos.35, 36 and 37 of Annexure A is
concerned, we quote hereinbelow the exact description of
the said three items which read as under:
"ANNEXTURE- ’A’
Name of the products which will fall under chapter sub-heading
3005.90
--------------------------------------------------------
Sr. Code No. Item Pkg.
No.
--------------------------------------------------------
35. 18411 P.P.D. STU/0.1 ML 5 ML
36. 18411A P.P.D. 10TU/0.1 ML 5 ML
37. 18412A Tuberculin P.P.D.
Lyophilized 10TU/0.1 ML 500 TU
------------- -----------------------------------------------------------------------
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On this point we may state that the Adjudicating
Authority had referred the matter for opinion to Dy. Chief
Chemist who opined that the three items were "cultures
of micro-organisms" and, therefore, they came under
Chapter Heading 30.02 and not under Chapter Heading
30.05. Apart from the question as to whether the Dy.
Chief Chemist was or was not entitled to classify, the fact
remains that the question as to whether the above
produces are "diagnostic reagents" was not referred.
In this case we are concerned with classification of
diagnostic reagent for vivo detection of T.B. mycobacteria.
According to the Adjudicating Authority, these reagents
are of mycobacterium origin but they are injected
intradermally into the patient and, therefore, they are
classifiable under Chapter Heading 30.05 (CSH 3005.90).
According to the Department, the above three items are
put up by the assessee for sale in measured doses and,
therefore, they were classifiable under Chapter Heading
30.05. In this connection, reliance is placed on Chapter
Note 3(d) to Chapter 30 which reads as under:
"CHAPTER 30
PHARMACEUTICAL PRODUCTS
Notes:
1. to 2. xxx xxx xxx
3. Heading No.30.05 applies only to the
following, which are to be classified in
that heading and in no other heading of
this Schedule: -
(a) to (c) xxx xxx xxx
(e) Opacifying preparations for X-ray
examinations and diagnostic
reagents designed to be
administered to the patient, being
unmixed products put up in
measured doses or products
consisting of two or more ingredients
which have been mixed together for
such uses;
(f) to (h) xxx xxx xxx "
(emphasis supplied)
On reading Chapter Note 3(d) it is clear that
preparations for X-ray examinations and diagnostic
reagents designed to be administered to the patient, put
up in measured doses would fall under Chapter Heading
30.05. However, in this case there is no finding given by
any of the Authorities below as to whether Item Nos.35,
36 and 37, quoted above, are diagnostic reagents. This
question has got to be decided as the assessee contends
that the above three products are not diagnostic
reagents, they are "diagnostic aid". In this connection,
reliance is placed on Pharmacopoeia of India (Third
Edition) by Ministry of Health and Family Welfare (GOI)
and also on The National Medical Series for
Independent Study (Microbiology - 2nd Edition) by Dr.
David T. Kingsbury and Gerald E. Wagner.
Since this question has not been answered we remit
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the matter to the Adjudicating Authority to decide
whether Item Nos.35, 36 and 37, quoted hereinabove, are
diagnostic reagents or whether they are in aid of
diagnosis.
Now, coming to Item Nos.1 to 15 of Annexure B, we
quote hereinbelow the said items which read as under:
"ANNEXTURE - ’B’
Name of the products which will fall under chapter sub-heading 3822
-----------------------------------------------------------
Sr. Code No. Item Pkg.
No.
-----------------------------------------------------------
1. 17401A Anti Sheep Hemolysin 5 ML
2. 19404 Chem. Control (Assayed) 5x3 ML
3. 19404A Chem. Control (Unassayed) 5x3 ML
4. 17405 Fraund’s Adjuvant (Com) 10 ML
5. 17406 Guinea pig (Complement) 5x1 ML
6. 19408 Kahn VDRL + Va control 5 ML
7. 19409 Kahn VDRL - Va control 5 ML
8. 19444 Chem. Control Assayed
Normal 5x3 ML
9. 19444A Chem. Control Assayed
Abnormal 5x3 ML
10. 25907 R.A. Test (Latax Test) 10 T
11. 25907A R.A. Test (Latax Test) 20 T
12. 25934 C.R.P. (Latax Test) 20 T
13. 25947 ASO (Latax Test) 20 T
14. 25946B Austragen (Latax Test) 25 T
15. 25946C Austragen (Latax Test) 50 T
-----------------------------------------------------
According to the assessee, the above 15 items fall
under Chapter Heading 30.02 as they are "blood
fractions". This is not disputed by the Department.
However, according to the Department, since Item Nos.1
to 15 are manufactured by coating latex particles with
protein, they fall under Chapter Heading 38.22 of CETA.
However, according to the Tribunal, the said items fall
under Chapter Heading 30.05 of CETA. At this stage we
may note that according to the Department, the said 15
items came under Chapter Heading 38.22 whereas,
according to the assessee, they came under Chapter
Heading 30.02. The only question before the Tribunal
was whether it came under Chapter Heading 38.22 or
whether it came under Chapter Heading 30.02. In M/s.
Mitra’s case (which we have decided hereinabove vide
C.A.No.5322 of 2002), we have taken the view that "blood
fractions" fall under Chapter Heading 30.02. Chapter
Heading 30.02 refers to "blood fractions". Merely
because the medium used is latex (rubber) or paper, will
not bring the items under Chapter Heading 38.22. Once
an item is a "Blood Fraction" it falls under Chapter
Heading 30.02. The medium is irrelevant. The medium
could be paper or rubber. The configuration of the
product and the function are important. In our opinion,
Item Nos.1 to 15 are "Blood Fractions". They are "Blood
Fractions" even according to the Department.
In the circumstances, we classify Item Nos.1 to 15
of Annexure B to the paper book under Chapter Heading
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30.02 (CSH 3002.00).
Accordingly, except for Item Nos.35, 36 and 37 of
Annexure A, the assessee \026 M/s. Span Diagnostics Ltd.
succeeds in C.A. Nos.1076-1080 of 2002. However, with
regard to Item Nos.35, 36 and 37 of Annexure A, the
matter shall stand remitted to the Adjudicating Authority
for fresh decision in accordance with law. Consequently
the question of limitation will remain open only with
regard to Item Nos.35, 36 and 37 of Annexure A in C.A.
Nos.1076-1080 of 2002.
Accordingly, the above C.A. No.5322 of 2002, C.A.
Nos.1953-54 of 2003 and C.A. Nos.1076-1080 of 2002
stand disposed of with no order as to costs.