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TMI Blog2001 (12) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... led submissions. It was claimed that the majority of the products listed in Annexure-A were antisera, etc. It was claimed that there was a clear distinction between blood grouping sera and blood grouping reagents although both could be used in blood grouping. In this respect certificate dated 24-1-94 from the Institute of Immuno Hematology was referred to. 4.In the show cause notice reliance was placed on Note 3(d) to Chapter 30 whereby diagnostic reagents designed to be administered to the patient, were to be classified under Heading 3005 which covered "Pharmaceutical goods not elsewhere specified", and the allegation was made that the contested products were so classifiable. In the reply it was claimed that the substances having been purified from cultures of micro-organisms were rightly classifiable under Heading 3002. It was further claimed that the diagnostic reagents referred to in the said note should relate to Opacifying preparations, etc. and would not cover the present products. 5.As regards the products shown in Annexure-B to the Notice, it was claimed that the products being used for diagnosis of different diseases and being known in the market as test reagents, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst this judgment the Assessee filed an appeal which was disposed of by the Commissioner (Appeals) vide Order No. NK(438)/SRT 86/96, dated 15-3-96. The same arguments, as were made before the lower authority, were advanced by Assessee. 11.The Commissioner, apart from examining the evidence produced by the Assessee, also relied upon the opinion of the Dy. Chief Chemist in examining the classification of the disputed products. The Commissioner accepted that the products listed at Sr. Nos. 1 to 34 of the Annexure-A to the show cause notice were antisera used for blood grouping but he chose to term them as "blood grouping reagents". In doing so he relied upon Chapter Note 3(d). He stressed that the sales literature also termed these products as diagnostic reagents. 12.As regards the products at Sr. Nos. 35 to 37 of Annexure-A of the SCN, the Commissioner noted the finding of the Assistant Commissioner. The Assistant Commissioner had classified them under Heading 30.05 because they were diagnostic reagents administered to the patient. The Commissioner referred to the opinion of the Dy. C.C. as regards these products, who opined that since these products were cultures of micro-organism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssification of all products under Heading 3002. 17.The Revenue have filed Appeal Nos. E/1522/R/96 & E/1544/R/96-Bom. 18.In the first appeal, the challenge is made of re-classification of products at Sr. Nos. 35 to 37 of the Annexure-A and all products except at Sr. No. 4 of the Annexure-B to the show cause notice. It is claimed that the Dy. C.C. opinion should not have been placed above the dictates of the Chapter Notes etc. The Assessees have filed cross-objection against these Appeal bearing No. E/CO/30/R/97. The Revenue have also filed Appeal being No. E/1544/R/96 against the second order of the Commissioner quantifying the differential duty. It was claimed that reduction of duty was not warranted. His order that the assessment should be effective from the date of provisional assessment is also challenged. Assessees have filed cross-objection bearing No. 52/R/97. 19.There is one peculiarity in this set of appeals. After hearing the assessees the Commissioner (Appeals) obtained the advice of the Dy. Chief Chemist on the technical matters before him. In making the order he heavily relied thereupon. Admittedly the appellants were not aware of the opinion. However, in the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noglobudin, 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 immunised 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. A healthy human or animal is injected with a toxic substance. The body produces antibodies. The blood is drawn and subject to clotting. The remittance clear Liquid Serum." 26.Where a person loses blood due to accident or where he is suffering from a disease like cancer, blood transfusion becomes necessary. However, there are certain prescriptions to be followed before the transfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kground now we turn to the products to be classified. 34.We have annexed the Annexure-A & B of the show cause notices to this Order. 35.The first part of the contest is the classification of the products at Sr. Nos. 1 to 34 in Annexure-A. As the description of the items itself shows, these are Sera containing various antibodies. For a very long time the assessees claimed classification under Heading 3002 which was accepted by the department. The Appellants assessees continue to claim this classification. 36.The Revenue supported the classification under Heading 3005 as 'Blood Grouping Reagent'. The claim made by the Appellants assessees is that Heading 3002 is specific whereas Heading 3005 is generic. It is claimed that blood grouping antisera are not blood grouping reagents. It is claimed that reagents produce chemical reaction in another substance whereas there is no chemical reaction in agglutination. It is claimed that the agglutination is not a chemical reaction but a immunological reaction. It is claimed that irrespective of their uses antisera would continue to fall under Heading 3002 and that the classification of Therapeutic Prophylactic antisera under Heading 3002 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d grouping, then they would cease to fall under Heading 3002 and would fall under the residuary Heading 3005. 40.Considerable energy was spent by Shri Patil, learned Counsel in defining the phrase 'reagents'. It was claimed that reagents are substances which produce a chemical reaction and that serological reaction cannot be called chemical reaction. 41.Shri Deepak Kumar arguing for the revenue said that serological reaction involves chemical reaction inasmuch as in the process antibodies conjugates to the antigens which gives non-covalent reaction and chemical energy is released from free energy. 42.We find that it would be an error to define the phrase 'reagent' used in Note (3) to Chapter 30 as defined in the general English dictionary. There are a number of methods by which blood grouping is made. Apart from the 'ABO' and 'Rh' systems cited above, there are other systems. Like KEL, Lu, K, Le, MNS, and P systems. Without exception all of them use antisera leading to serological reaction. No chemical is used in blood grouping. Therefore it is futile to say that antisera cannot be called 'reagents'. Therefore, the dictionary definition of 'reagents' cannot be allowed to qualify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentical, we would have differed from the Tribunal judgment in that case. But since in the present dispute the products are not similar we hold that the judgment does not give guidelines to the classification of the contested products before us. 46.We hold that antisera used for the purpose of blood grouping would not fall under sub-heading 3002, but would fall under sub-heading 3005; and therefore, that the products at Sr. Nos. 1 to 34 of Annexure-A to the show cause notice are classifiable under Heading 3005. 47.The second set of disputed articles occurs at Serial Nos. 35 to 37 of Annexure A to the show cause notice. These are Purified Protein Derivatives (PPD) obtained from tuberculosis bacteria grown in special medium and then further processed. The Assistant Collector held that although these products were of micro bacterium origin they would merit classification under heading 30.05 in terms of Chapter Note 3(d) because they were intra-dermally injected into a patient. The Commissioner (Appeals) classified the product under 30.03. In doing so he relied upon the opinion of the Dy. Chief Chemist to the effect that intra-dermal administration of the PPD did not amount to "admin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.1 ml., the vial containing 5 ml. would not be called as a measured dose but multiple doses. The Commissioner adopted this logic. To our mind the phrase multiple doses is not devoid of measurement. The vial as it existed did contain pre-determined quantity and the measurement of the dose was prescribed thereupon. 51.We observe that the contested products here are used to produce reactions which are measurable. We thus find that the tuberculism PPD satisfies both the conditions prescribed in the aforesaid Chapter Notes. These products would therefore rightly fall for classification under Heading 3005.90. 52.The third set of disputed articles are covered under Serial Numbers 1 to 3 and 5 to 15 of Annexure 'B' to the show cause notice. The assessees had sought coverage under Heading 30.02 on the ground that they were blood fractions and toxin preparations. The show cause notice alleged that the classification warranted was under Heading 38.22 inasmuch as they were miscellaneous chemical preparations. The Assistant Collector observed that the various preparations were prepared from fractionated human blood and by separating certain active proteins and other fractions such as gamma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Heading 30.05. 58.We have thus, not upheld the claim of the assessee that all the contested goods would merit classification under sub-heading 3002.02. We have upheld the classification as made by the Assistant Commissioner of the various product falling under Appendix A annexed herewith. The classification of the products falling under Annexure B made by us is entirely different from that claimed by both sides. 59.A similar situation had occurred in a judgment given by the Supreme Court in the case of Warner Hindustan Ltd. v. C.C.Ex., Hyderabad [1999 (113) E.L.T. 24]. The Tribunal had in their judgment [1989 (42) E.L.T. 33] classified Halls Icemint Tablets as confectionery falling under Chapter 17, whereas the dispute before the Tribunal was contesting entries under sub-headings 3003.19 and 3003.30. In that situation, the Supreme Court held that the Tribunal could not build up a new case at the appellate stage. What was appropriate was for the Tribunal to permit the authorities and the assessee to settle the issue. 60.As far as the products covered under Annexure A is concerned, we have upheld the classification made by the Assistant Collector. In the case of products co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner. 64.The second dispute is on the directions of the Commissioner that the price should be treated as Cum-duty-price. The Revenue cites Supreme Court judgment in the case of Bata India Ltd. [1996 (84) E.L.T. 164]. In this judgment, the Supreme Court held that where no tax was payable, but where the price was inflated by any amount by way of tax, the deduction was not available. The assessees say that Bata India Ltd. judgment would not apply. They say that in case the duty is held later to be payable, the price would become Cum-duty-price. This issue is also settled by the Larger Bench of the Tribunal in the case of Srichakra Tyres Ltd. v. CCE, Madras [1999 (108) E.L.T. 361]. In this judgment, it was held that where any duty was attracted subsequent to the sale of the goods, the goods would become burdened with "duty payable" and would make the such price Cum-duty-price. On this ground, therefore, the orders of the Commissioner (Appeals) sustain. 65.On the other observations and directions made by the Commissioner as to the goods being capable of description "Bulk Drugs" as also on the availability of Modvat credit, no contest has been made by the Revenue. 66.We, thus, up ..... 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