1991 (1) TMI 306 - AT - Customs

Summary

Issues:
Delay in filing Supplementary appeals, Challenge to order-in-appeal No. 70 to 80-Ind/89, Classification of Gallic acid NF under Customs Tariff, Interpretation of pharmaceutical grade chemicals, Reliance on Merck Index and BTN Explanatory Notes, Application of Rules of Interpretation of Customs Tariff.

Delay in filing Supplementary appeals:
The delay in filing the Supplementary appeals was condoned after hearing both parties.

Challenge to order-in-appeal No. 70 to 80-Ind/89:
The appellants challenged the order-in-appeal passed by the Collector of Customs (Appeals), New Delhi, which set aside the order-in-original passed by the Assistant Collector of Customs and Central Excise, Indore regarding refund claims of excess duties paid on Gallic acid NF 99.5% purity.

Classification of Gallic acid NF under Customs Tariff:
The Collector held that Gallic acid NF did not have prophylactic or therapeutic value solely or predominantly as a drug, based on BTN Explanatory Notes, and rejected the classification under sub-heading (13) of Heading 29.01/45 of the Customs Tariff. The appellants contended that Gallic acid NF of pharmacopoeial grade should qualify under sub-heading (13) as pharmaceutical chemicals.

Interpretation of pharmaceutical grade chemicals:
The appellants argued that Gallic acid NF, being of pharmacopoeial grade, should be classified as a drug with therapeutic value, contrary to the Collector's findings based on the use of Gallic acid in various industries as per Merck Index and BTN Explanatory Notes.

Reliance on Merck Index and BTN Explanatory Notes:
The appellants relied on the Merck Index to establish the therapeutic use and value of Gallic acid NF as an astringent and styptic. They argued that the Collector erred in rejecting the authority of the Merck Index and should have classified the imported goods under sub-heading (13) based on their pharmacopoeial grade.

Application of Rules of Interpretation of Customs Tariff:
The appellants invoked Rule 3(c) of the Rules of Interpretation of Customs Tariff for specific classification under sub-heading (13) of Heading 29.01/45, emphasizing that the imported goods met the criteria for pharmaceutical chemicals with therapeutic value.

The Tribunal ruled in favor of the appellants, stating that the imported Gallic acid NF, meeting pharmacopoeial standards and used for manufacturing drugs with therapeutic value, qualified for classification under sub-heading (13) of the Customs Tariff. The Tribunal rejected the Collector's reasoning, emphasizing that the goods' pharmaceutical nature warranted the classification sought by the appellants. The decision highlighted the importance of the specific use and grade of chemicals in determining their classification under the Customs Tariff, emphasizing the significance of pharmaceutical standards in such classifications.