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TMI Blog1998 (2) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... nolin Anhydrous I.P.' also under the sub-heading 2913.00 and granting total exemption to it under Notification No. 234/86-C.E. The Department filed an appeal on the ground that the products namely `Lanolin Commercial' and `Lanolin Anhydrous I.P.' were classifiable under sub-heading No. 1507.00 of the Tariff Act and not under sub-heading No. 2913.00. The Collector (Appeals) accepted the appeal of the Department. 3. It was also his submission that the products viz., `Lanolin Anhydrous I.P.' is a bulk drug and eligible for total/partial exemption under Notification No. 234/86, dated 3-4-1986 and/or Notification No. 31/88-C.E., dated 1-3-1988, as the case may be. It is a pharmaceutical aid and is considered as `Drug' for the purpose of the Drugs & Cosmetics Act, 1940. This is evident from the Licence No. 556, dated 4-4-1978 issued by the Foods & Drugs Administration Authority as well as the certificate dated 23-1-1987 issued by the Drugs Controller of India. The opinion of Drug Controller certifying that the product viz., `Lanolin Anhydrous I.P.' is a `bulk drug' cannot be ignored. In support of his contentions, he relied upon the following judgments :- (a) Leukoplast (Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by any of the products mentioned in the said sub-heading. The adjudicating authority has wrongly concluded that `Lanolin' is `Degras' and/or `Wool grease residues'. He submitted that the `Lanolin' and `Degras' are technically and commercially two different commodities. `Degras' is a source of `Lanolin' and the later has altogether different characteristics and qualities from the former. The appellants referred to the definitions of the terms `Lanolin' and `Degras' given at page Nos. 600 and 309 respectively of the Condensed Chemical Dictionary (10th Edition) by Gessner G. Hawley. The later part of the description of Heading No. 15.07 is derived from the Heading No. 1522.00 of Harmonized Commodity Description and Coding System (CCCN). The detailed explanatory notes to Heading 1522.00 under CCCN given at page 120 and 121 at Exhibits `S1' and `S2' make it clear that the product `Lanolin' is not covered under said heading. The appellants further submit that the reliance on the explanatory notes to Chapter 15 on `Lanolin' as given in CCCN is misplaced under the facts and circumstances of the present case inasmuch as said Explanatory notes relate to Lanolin for those industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself is not a pharmaceutical preparation containing any therapeutic agent. It is not an ingredient of any medicines formulation or any medicine but, only a pharmaceutical aid. 8. It is mainly used for preparation of lubricants and ointments and cosmetics etc. Therefore, `Lanolin' whether of I.P. or commercial grade is classifiable under Heading 15.07. 9. He would also like to submit that Chapter titles do provide a broad indication of the goods sought to be covered within the respective chapter and in this connection, he would cite the following case law :- (a) CCE v. Roha Dy Chem reported in 1989 (41) E.L.T. 667 (T). (b) Elgi Polytex v. CCE reported in 1988 (34) E.L.T. 404 (T). (c) Bharat Heavy Electricals Ltd. v. CCE reported in 1988 (34) E.L.T. 226 (T). (d) CCE v. Metrowood Engg. Works reported in 1989 (43) E.L.T. 660, 670 & 671. Furthermore, the HSN notes have a pursuasive value. It was also his submission that primary or pre-dominant use or function of the article is one of the most important factors since the identity of the goods is associated with its pre-dominant use or function. It was also his contention that a more specific descri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 15.05, it is mentioned inter alia, as follows :- "15.05 WOOL GREASE AND FATTY SUBSTANCES DERIVED THEREFROM (INCLUDING LANOLIN)" Lanolin, obtained by purifying wool grease, has the consistency of an ointment; it ranges in colour from yellowish-white to brown according to the degree of refining, deteriorates only very slightly in the air and has a faint, characteristic odour. Lanolin is very soluble in boiling spirit but insoluble in water, although it can absorb a large quantity of water, turning into an unctuous emulsion known as hydrated lanolin. Anhydrous lanolin is used for the preparation of lubricants, emulsifiable oils or dressings. Hydrated or emulsified lanolin is mainly used for the preparation of ointments or cosmetics. Slightly modified lanolin, which retains the essential character of lanolin, and wool alcohols (also known as lanolin alcohols-mixtures of cholesterol, isocholestrol and other higher alcohols) are also covered by this heading. The heading excludes chemically defined alcohols (generally Chapter 29) and preparations based on lanolin, for example lanolin to which medicated or perfumed substances have been added (Heading 30.03 or 30.04, or Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nhydrous I.P., is a bulk drug imported/manufactured under valid drug licence and eligible for exemption under Notification No. 234/86, dated 3-4-1986 for central excise duty. 13. The Notification No. 31/88-C.E., dated 1-3-1988 clearly mentions in the Explanation that "In this notification, the expression "bulk drug" shall have the same meaning assigned to it in the Drugs (Prices Control) Order, 1987". 14. The Notification No. 234/86-C.E., dated 3-4-1986 gives its own definition under the heading `Explanation' as follows :- "Explanation - In this notification, "bulk drugs" means any chemical or biological or plant product, conforming to pharmacopoeial standards, normally used for the diagnosis, treatment, mitigation or prevention of diseases in human beings or animals, and used as such or as ingredient in any formulation." 15. The definition of `Drugs' given in the Drugs Act has a larger amplitude than given in Explanation to Notification No. 234/86 and it is an inclusive definition. However, the fact remains that it also covers and emphasizes normal use for specified purposes including diagnosis, treatment, mitigation and prevention of diseases in human beings an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Organic Chemicals" and it is not in dispute that it is an organic chemical but it is Chapter 30 which covers "Pharmaceutical Products". Therefore, the only question which would arise to our mind is whether it would be classifiable under Chapter 29 or Chapter 30. 19. Since the appellants have claimed that it is a `bulk drug' and the Drug Controller has also certified it to be a bulk drug and in the case of Notification No. 31/88, the definition of `Drugs' as given in the Drugs Act has been adopted and in the other case, the certificate has been given with reference to Notification No. 234/86 and we find from `The Condensed Chemical Dictionary' by Gessner G. Hawley that it is used in or as ointments also, therefore, reading the Pharmacopoeia of India with Hawley's Dictionary as well as the certificate of the users and that of the Drug Controller all taken together, it becomes clear that the product is usable as pharmaceutical aid as well as ingredient in ointments for medicinal purposes and utilised for one of the uses to which drugs and medicines are normally put. Chapter 29 also covers some chemicals which are normally prescribed and used as drugs or medicines which have mai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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