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TMI Blog2002 (1) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... e is also a dispute as to whether the demand of duty is time-barred or not. The Commissioner of Central Excise, by order dated 10-2-2000, held that the products mentioned at Serial Nos. (1) to (6) were classifiable as 'Blood-grouping reagents' under Chapter Sub-Heading 3005.90 of the Schedule to the Central Excise Tariff Act, 1985 [in short, CET Schedule] as claimed by the Department and not as 'cultures of micro-organisms' under CSH 3002.00 of the said Schedule as claimed by M/s. J. Mitra & Co. Ltd. He classified the rest of the products as 'Diagnostic and laboratory reagents' under CSH 3822.00 vis-a-vis the assessee's claim to have them classified as 'Antisera' under CSH 3002.00. The Commissioner confirmed against the assessee-company demand of duty to the extent of Rs. 1,25,85,035/- on the products cleared by them during 1994-95 to August 1999 and imposed on them a penalty of equal amount under Rules 173Q etc. of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944. Interest on duty was also demanded from 28-9-1996 under Section 11AB of the Act. The present appeal No. 1644/2000-C was filed by the company against the above order of the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsultant (Transfusion Medicine), Indraprastha Medical Corporation Ltd., New Delhi [page 188 of Paper Book]. (ii) Certificate dated 1-7-99 of Dr. Kabita Chatterjee, All India Institute of Medical Sciences, New Delhi. [Page 189 of Paper Book]. (iii) Certificate dated 17-6-99 of Dr. S.K. Chaudhary, Indian Red Cross Society, New Delhi [page 190 of Paper Book] (iv) Pages 34 and 35 of Dr. R.N. Makroo's book on 'Basic Blood Group Serology' [pages 307-309 of Paper Book] The Counsel has contended that since the MABs are specifically covered as cultures of micro-organisms under Heading 30.02, the same cannot be classified under the residuary Heading 30.05. He has relied on the Supreme Court's judgment in Indian Metals & Ferro Alloys Ltd. v. Collector of Central Excise [1991 (51) E.L.T. 165 (S.C.)]. According to the Counsel, a combined reading of HSN Explanatory Notes to Heading 30.02 and Heading 30.06 (corresponding to Heading 30.05 of CET Schedule) would show that only polyclonal antibodies are covered under Heading 30.05 and MABs are covered only under Heading 30.02 as 'cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or expressions employed in or under Heading 30.03. The last of the Chapter Notes viz. Note (6) defines a term used under Heading 30.04. The oft-referred-to Note 3(e) reads as under :- Heading No. 30.05"3. applies only to the following, which are to be classified in that heading and in no other heading of this Schedule :- (a) ..………...... (b) .......………. (c) .......………. (d) ........……… (e) Blood-grouping reagents; (f) .......………. (g) .......………. (h) .......………." Heading 30.02 includes two distinct categories of goods viz. Antisera and other blood fractions AND Vaccines, Toxins, Cultures of micro-organisms and similar products. The HSN Notes to Heading 30.02 (vide pages 465 and 466) have also represented them as two distinct and mutually exclusive categories of goods vide (C) and (D) below. According to the HSN Notes, Heading 30.02 covers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouping/blood-typing reagents and prescribed the same for such use only. Therefore, irrespective of the biochemical or other technical characteristics of the products, the goods would fall for classification only as blood-grouping reagents according to common parlance and hence would come within the coverage of the specific entry of Heading 30.05 read with Chapter Note 3(e). The Apex Court's ruling in Shree Baidyanath Ayurved Bhavan case (supra) appears to have been appositely relied on by the adjudicating authority. Where (as in the instant case) any product is known to the market by a specific name which finds specific mention under any Tariff Heading either per se or read with any Section/Chapter Note, the product would ipso jure fall under that Heading only. In such a case, the scientific or technical characteristics of the product - whether manufactural, constitutional or functional - are irrelevant to its classification, and so are HSN notes. Therefore, the reliance placed by ld. Counsel on experts' certificates or on HSN notes will have no persuasive effect on us. We, thus, find that the adjudicating authority has rejected the assessee's claim under Heading 30.02 by a conceiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titute of Immunology and Drug Control Department of Delhi Government. After recording a finding that the products were not crude antisera but only hCG antibodies derived from antisera, ld. Commissioner ruled out the applicability of Heading 30.02 by taking the view that the term 'antisera' used in that Heading stood for crude antisera only. 4.2.Ld. Counsel has submitted that the foreign manufacturers viz. M/s. ABI Applied Bio Tech Company Inc., who supplied the hCG antibody (in liquid form or as coated on sheets of paper) to the assessee, have clarified that the antibody was derived from goat antisera. The appellants only cut the antibody-coated paper sheets into smaller sizes, made the same into kits or strips of paper and sold to various laboratories. Counsel has further pointed out that the Commissioner has accepted the products to be refined antisera. Relying on HSN notes, ld. advocate has contended that Heading 30.02 covers antisera of all forms as it makes no distinction between crude antisera and refined antisera. The products in question are specifically covered under that Heading and, by virtue of the exclusion clause in Heading 38.22, cannot be classified under the latte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antibody (used in the PTKs) as purified antisera from goat's blood. This finding is not under challenge. It is also not disputed that the pregnancy test is based on antigen-antibody reaction, the hCG (a glycoprotein hormone produced by the placenta and found in the urine of pregnant women) in urine sample being the antigen. HSN explanatory notes to Heading 30.02 (at page 465) say that antisera are also used for diagnostic purposes, including in vitro tests. The notes to Heading 30.06 (at page 473) say, inter alia, as follows :- "Diagnostic reagents not designed to be administered to the patient (e.g., those for carrying out tests on blood, urine, etc., samples taken from a patient or for use as laboratory reagents) are excluded : they fall in the headings appropriate to the materials of which they are made (e.g. Chapter 28, Chapter 29 or heading 30.02 or 38.22)." The anti-hCG antibodies used in the PTKs were derived from goat antisera classifiable under Heading 30.02. It follows that the PTKs, which were prescribed only for in vitro test for pregnancy and were not designed to be administered to the patient, would fall, as 'diagnostic or laboratory reagents', under Heading 30.02, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes to Heading 30.02. We are persuaded by that decision to classify "Beta Visipreg" under CETSH 3002.00. 5.The remaining items in the list of products given in the opening paragraph of this order are Syphilis RPR (VDRL) and Salmonella Antigens. All that the appellants have claimed in relation to these products is that the items are specifically covered as 'blood fraction' and 'cultures of micro-organism' respectively, under Heading 30.02. We find that this claim is not supported by any evidence. As correctly noticed by the Commissioner, the assessee's own product labels and literature did not contain anything to support the claim. In their labels/literature, the assessee prescribed the products "for lab use only, not for medicinal use". While Syphilis RPR was prescribed as a quick test for reagin in serum or plasma, Salmonella Antigens were offered as a rapid test for specific antibodies in serum. Thus, both the products were meant for testing blood fractions. The antigen (toxin) used in the Syphilis RPR test kit was stated to be a modification of VDRL antigen (toxin). This antigen has not been shown to have been derived from any blood fraction. Counsel has submitted that Syphi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and misdeclared facts before the Department, the appellants have pleaded that they had obtained SSI registration in 1991 and commenced production shortly thereafter, that they believed bona fide that their products were chargeable to NIL duty under Heading 30.02, that right from the beginning they had been filing declarations with the Department claiming exemption from registration and that the Department was fully 'in the know of things' and did not raise any doubt or dispute at any point of time prior to the SCN. According to the appellants, there can be no suppression of facts by one party when both parties are aware of the facts. They have relied on the Supreme Court's judgments in the cases of Padmini Products Ltd. v. CCE [1989 (43) E.L.T. 195 (S.C.)] and Pushpam Pharmaceuticals Ltd. v. CCE [1995 (78) E.L.T. 401 (S.C.)]. The appellants have also contended that it was a departmental change of opinion on classification of the products that led to the SCN and, in such SCN, suppression could not have been raised as a valid allegation. Ld. advocate has reiterated all these contentions and has submitted that there is no evidence on record to prove that the appellants had suppresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, which would have enlightened the Department about the classification of the goods, was suppressed by the assessee. Though the declaration was filed by the assessee claiming exemption from the requirement of registration, they did not mention the value of clearances of the goods. We find no reason to interfere with these findings of the Commissioner. It was only after the visit by the Central Excise officers to the assessee's factory premises on 8-2-99 that the assessee filed a proper detailed declaration in respect of the products. None of these findings of the Commissioner has been successfully contested before us. Therefore, we find that the allegation of suppression and misdeclaration has been substantiated against the appellants in respect of MABs and non-PTK diagnostic/laboratory reagents and that their intent to evade payment of duty on these products has been clearly brought out by the evidence on record. Accordingly, we hold that the extended period of limitation was correctly invoked for demanding and confirming duty on the MABs (blood-grouping reagents) and non-PTK diagnostic/laboratory reagents for the period 1994-95 to 31-1-99. We have not accepted the appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We further observe that a penalty of Rs. 2 Lakhs has been imposed on Shri Lalit Mahajan under Rule 209A of the Central Excise Rules, 1944. This penalty appears to be based on a finding that the declaration filed by the assessee was signed by Shri Lalit Mahajan and that, being in over all charge of the affairs of the company, he indulged in activities prejudicial to the express provisions of law and in removing and transporting excisable goods, about which he had reason to believe that the same were liable to confiscation. We, however, do not find any record of evidence in the impugned order to show that Shri Lalit Mahajan did anything with mens rea against the Revenue or that he had personally entertained a belief that the goods were liable to confiscation under the Central Excise law. In the absence of such evidence, we have to exonerate Shri Lalit Mahajan from the alleged offence under Rule 209A. 7.In the result, our order will be as follows :- (a) The classification of items (1) to (6) of the list of products given in the opening paragraph of this order, as blood-grouping reagents under CET Heading 30.05 is upheld; the classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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