TMI Blog2000 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... teria E.Coli is cultivated by fermentation process as per the following flow chart :- Culture strain of micro-organism E.Coli I Cultivation in Shake flasks (Micro laboratory) I Cultivation of Micro Organism in Main Fermenter I Separation of the Bio-mass of Micro Organism I Immobilisation and aggregation of the whole Cells/ Biomass of micro organism containing PGA activity. 4. Though the classification lists filed by the party from time to time right since 24-10-1989 classifying this product under SH 3002.00 attracting nil rate of duty was duly approved by the Asstt. Commissioner but sometimes in 1993, it was felt by the department that the product was in the nature of yeast classifiable under Ch 21. However, the party informed them that PGA is not an edible preparation and is used in the manufacture of 6 APA and 7 ADCA, which are drug intermediates used in the manufacture of Penicillin - an antibiotic. It was further learnt that PGA has repeated use like a Bio-catalyst and comes out again and again in the manufacturing process and it was felt that the product would be properly classifiable as antibiotics under sub-heading 2941.10. The party was issued with seven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (E. Coli) is obtained. The PGA is culture of E. Coli bacteria. It is stated that enzymes is only one part of the cell whereas DNA, RNA and membrane are the other parts. It is submitted that in this process, the enzyme is not separated or extracted from the cell or thereafter concentrated or immobilised. It is stated that they are immobilising the whole cell containing various components including the enzyme and the whole cells containing the PGA activity is used successively as a catalyst for the production of 6 APA by breaking the Penicillin. 7. The Ld. Advocate referred to the research paper Penicillin Acylase : Enzyme Production and its Application in the manufacture of 6 APA published by Dr. J.G. Shewale and Dr. H. Shivaraman which was shown to appellants by the Commissioner on 12-8-1996 when they appeared before him for personal hearing. The Commissioner in para 23 of his Order has placed reliance on this article and observed that in this article there is stated to be four different forms of biocatalysts. The immobilised whole cell biocatalyst is one of them. The Commissioner has observed that the authors of this article hold the opinion that the biocatalyst preparation b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. Krishnan. 9. Shri K. Srivastava, ld. SDR speaking for the Revenue relied on the definition of the word Enzyme given in Hawley s condensed chemical Dictionary in which it is stated that the names of enzymes invariably terminate in either -ase or -in. He has relied on Chapter 1 of the book Principles of Enzymology of Technological Applications . In the introductory para 1.1 of this book, it is stated that enzymes are proteins which act as catalysts in biological systems. For technological purpose, enzymes may be utilised within intact cells. Alternatively, as is now the case for most applications; enzymes are extracterd and purified prior to use as biocatalyst . The ld. SDR has further referred to the book Immobilized Enzymes; Research and Development Edited by Ichiro CHIBATA. In para 1.3 of this book it is stated, Immobilized microbial cells can be defined by replacing the word enzymes with microbial cells in the definition given for immobilised enzymes. That is, microbial cells physically confined or localized in a certain defined region of space with retention of their catalytic activities, and which can be used repeatedly and continuously. In this immobilized cells; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sms and other product of heading 30.02. 10. We have carefully considered the submissions made before us from both the sides and perused the records. The classification of the product under consideration is Penicillin G. Amidase Biocatalyst (PGA) manufactured by the appellants M/s Fermenta Pharma Biotech Ltd. Mandi (H.P). The technical note dated 28-4-1989 submitted by the party to the Department on this product states that the Culture strain of the micro-organism Escherichia Coli is cultivated by fermentation process and the cultivated micro-organism whole cells contain Penicillin G. Amidase activity (PGA). The whole cell Biomass of the micro-organism obtained after cultivation is immobilized and aggregated to get the Biocatalyst in granular form. Thus the bio-catalyst produced is the aggregated form of the whole cells of the cultivated micro-organism E. Coli containing Penicillin G. Amidase activity. The PGA is not an edible product and is used in the manufacture of 6 APA and 7 ADCA which are drug intermediate being used subsequently for the manufacture of semi synthetic penicillins class of antibiotics. The Revenue authorities seek to classify it under SH 3507.00 which correspo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Japan. In this compilation very clearly the product under consideration has been termed as enzyme as follows :- E. 6 APA is used as an important intermediate for synthetic pencillin, and has been produced industrially by penicillin by action of penicillin amidase (pencillin acylase) by a batch method using microbial cells or extracted enzymes....... For example penicillin amidase extracted from E. Coli was immobilized by covalent binding to DEAE......... The enzyme is relatively unstable in the soluble state; but its stability is increased by immobilization. The immobilized enzyme can be used for continuous operation without significant loss of activity at 37oC for 14 weeks....... In addition to find a more advantageous method for the industrial production of 6 APA from penicillin, the authors investigated the immobilization of E. Coli cells having penicillin amidase activity by the polyacryalamide gel method. The enzymic properties of immobilized cells were investigated and compared with those of intact cells. The result showed that the heat stability of the enzyme was increased by immobilization..... Although complete chemcial synthesis of 6 APA is possible, it is eco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been commercialised within two decades of its discovery. This was possible because of the simultaneous advancements in the areas of strain improvement, fermentation automation, large scale enzyme purification, enzyme immobilization, reactor designing down stream processing etc............ which constitute as aspects of modern technology (emphasis added). Throughout this article, the authors have referred to the Penicillin amidase or Penicillin Acylase as an enzyme. The Commissioner in his order has also extracted some parts from this article in support of his conclusion. However Dr. J.G. Shiwale the co-author of this paper and Group Manager, Research and Development, Hindustan Antibiotic Ltd. Pimpri, Pune - a Central Govt. establishment in his letter dated 2-9-1996 addressed to Mr. S. Krishnan, Executive Vice President and Secretary of the appellants states that the product manufactured by them does not fall under the category of immobilized enzyme. He reiterates the same opinion in letter dated 16-10-1997 addressed to the company. As we have already seen above, Dr. Shiwale as co-author of the research paper (Supra) has repeatedly and emphatically termed this product as an enzym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamined a sample of Penicillin G. Amidase Biocatalyst manufactured by M/s Fermentapharma Biodil Limited. It would not come under the category of Enzymes. The correct discription of the product would be that it is a culture of micro-organism . Again both of opinions these are unsubstantiated opinions without the support of any scientific data or literature. They do not say whether the samples of the product were subject to any tests and if so, what were they and what were the results. We are, therefore of the view that these certificates cannot be relied upon for the purpose of arriving at the nature, classification of the product under consideration. 14. The next is the letter dated 4-12-1996 of the Chief Chemist, Central Revenue Control Laboratory. In this letter Dr. Badri Prasad, Chief Chemist, CRCL has stated that he had visited the manufacturing unit of the company on 21-9-1996. The Chief Chemist has described in detail the manufacturing process of the product PGA Bio-catalyst and has stated that he had discussed the details of manufacturing process and other technical details with General Manager (Works) of the company. The samples of PGA were also drawn and were subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 36.07)..... The Ld. Advocate of the appellants was at pains to emphasise that the term Culture not only refers to the process but also to the end product. He refers to the definition given in Encyclopedia and Dictionary of Medicine Nursing and Allied Health, Fourth Edition by W.B Saunders Company as below :- Culture 1. the propagation of micro-organisms or of living tissue cells in special media conducive to their growth, 2. to induce such propagation 3. the product of such propagation. The definition in the Lexicon Webster Dictionary is:- Culture - the cultivation of micro-organism as bacteria for scientific study of medicinal use, the product on growth resulting from such cultivations . 17. The ld. Advocate also referred to the Final Order No. 780/98-C dated 11-9-1998 of the CEGAT in which the issue for determination before the Bench was the eligibility of the product Laviest capsules (falling for classification under TI 14E of the Schedule to the erstwhile Central Excise Tariff) to the benefit of the Notification No. 211/69 dated 20-9-1969 at Sl. No. 2 thereof and Notification 37/85 dated 17-3-1985 at Sl. No. 6 thereof which covered culture of micro-organisms. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions of PH. The enzyme also has the ability to catalyse acylation of 6-APA in acidic conditions.....). Though Dr. J.G. Shewale-- the Co-author of the paper in his subsequent communications to the company has retracted the findings arrived at by him in the article, but he has not given any reasons for it. He has also not stated as to why and in which way the inference drawn from his paper that PGA is an enzyme-is wrong. He has, however, certainly not called it a culture. 4. There is overwhelming quantity of technical literature (cited in paragraphs of this order in the preceeding paragraphs in support of the view that PGA is an enzyme. 5. The Chief Chemist, CRCL after studying the manufacturing process, consulting the technical literature on the subject and on analysis of the samples has advised, Penicillin G. Amidase is an enzyme.... Thus the product may be considered as crude enzyme preparation . 6. There is no technical literature and reasoned expert opinion filed that would call this product as culture. Dr. P.R. Reddy and Dr. K. Lahiri in their respective certificates have stated that it would not come under the category of enzymes and its correct description would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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