2019 (4) TMI 1841 - AT - Customs

Classification of imported medicine - whether classified under Tariff Heading 3004 90 52 as Rifampicin ? - benefit of N/N. 78/2006-Cus., dated 8-8-2006 as amended by Notification No. 10/2007-Cus., dated 25-1-2007. HELD THAT - A reference to a medicament containing Rifampicin shall be taken to be a reference to medicament containing combinations of Rifampicin with other drugs. In the imported antitubercular drugs, Rifampicin is the main constituent i.e. it is the medicament of Rifampicin and has to be classified under 3004 90 52 and therefore entitled to benefit of Notification 10/2007 and therefore exempt from Additional Customs Duty. The ACD is in lieu of Central Excise Duty levied in India. Now isoniazid and Pyrazinamide are exempt from C.E., duty by virtue of Notification 4/2006-C.E., dated 1-3-2006 as amended from time to time. It is only Rifampicin which attracts CE duty. Since the Govt., of India wanted to exempt all the antitubercular drugs from ACD they included only Rifampicin in Notification 10/2007 because the other antitubercular drugs are already exempt from CE duty. They also wanted to include combinations of Rifampicin with other drugs and therefore they did not refer to Rifampicin by name and mentioned CTH 3004 90 52 and said all goods . The impugned order is upheld and the appeal filed by the Revenue is rejected - Decided against Revenue.

Summary

Issues Involved:
Classification of imported medicines under Customs Tariff Act, 1975; Interpretation of Notification No. 78/2006-Cus. and Notification No. 10/2007-Cus.; Application of National Litigation policy; Exception clause (c) in para 3 of Instruction dated 17-8-2011; Recalling a Final Order for decision on merit.

Analysis:

1. Classification of Imported Medicines: The dispute revolved around the classification of medicines imported by the respondent. The issue was whether the imported medicines should be classified under Heading 3004 90 52 as 'Rifampicin' or under Heading 3004 90 57 as 'Other Anti-tubercular drugs.' The Revenue argued that the medicines were a combination drug formulation comprising multiple active ingredients, making them different from single drug formulations. The Adjudicating Authority classified the medicines under Heading 3004 90 57, leading to the levy of additional customs duty. However, the Commissioner (Appeals) reversed this decision, classifying the goods under Heading 3004 90 52 and granting exemption from additional duty of Customs.

2. Interpretation of Notifications: The Commissioner (Appeals) relied on the interpretation of the Customs Tariff Act and relevant notifications to support the classification under Heading 3004 90 52. The Commissioner emphasized that the imported goods primarily consisted of Rifampicin, and even though other anti-tuberculosis drugs were present, the classification was appropriate as contended by the respondent. Reference was made to the General Rules for the Interpretation of the Schedule to the Customs Tariff to justify this classification decision.

3. Application of National Litigation Policy: The Revenue filed a Miscellaneous Application for Rectification of Mistake (ROM) against the Final Order dismissing their appeal under the National Litigation policy. The Revenue argued that the appeal fell within the exception clause (c) in para 3 of the Instruction dated 17-8-2011, as amended by Circular No. 390/Misc./163/2010-JC, making it eligible for reconsideration on merit. The Tribunal recalled the earlier order and decided to hear the matter on merit due to the issue's nature falling within the exception clause.

4. Judicial Precedents: The Commissioner (Appeals) referred to a decision of the Hon'ble Supreme Court in India reported in 2002 (145) E.L.T. A167 (S.C.) to support the classification of the imported goods under Heading 3004 90 52. The Tribunal, after considering this observation, upheld the impugned order and rejected the appeal filed by the Revenue. The Tribunal also disposed of the Miscellaneous Application in light of the classification issue.

In conclusion, the judgment addressed the classification of imported medicines, the interpretation of relevant notifications, the application of the National Litigation policy, and the reliance on judicial precedents to determine the appropriate classification under the Customs Tariff Act. The Tribunal's decision to uphold the Commissioner (Appeals) classification decision under Heading 3004 90 52 showcases a detailed analysis of legal provisions and factual considerations in resolving the dispute.