2023 (10) TMI 540 - AT - Customs

Claim for nil rate of CVD in terms of the N/N. 12/2012-C.Ex Sl. No. 105, List 1 Sl. No. 11 - requirement to pay CVD, which came to be debited in the FMS scrip furnished by the appellants - HELD THAT - Serial number 105 describes the bulk drugs specified in List 1 which would attract nil rate of duty, and there is no dispute that List 1 includes Hydrocortisone (Sl. No. 11) as well. But the description of excisable goods at Column No. (3) has something more, by way of explanation. That means the description has to be read along with the explanation and the same are not mutually exclusive. The explanation provides the purposes of that particular entry - bulk drug to mean any pharmaceutical, chemical, biological or plant product, including its salts, esters, stereo-isomers and derivatives, conforming to pharmacopoeial or other standards specified in the Second Schedule to the Drugs and Cosmetics Act, 1940, and which is used as such or as an ingredient in any formulation. It is therefore incumbent upon the importer who imports any of the goods or bulk drugs as in the case on hand specified in List 1 to demonstrate that the same are conforming to the pharmacopoeial or other standards specified in the Second Schedule to the Drugs and Cosmetics Act, 1940. Admittedly, the appellant/assessee has nowhere demonstrated that the goods imported by it did conform to the standards specified under the explanation nor are the goods available for testing as they were cleared from Customs control before making the claim for exemption. There are no hesitation in holding the authorities below were absolutely correct in rejecting the claim of the appellant - the appeal filed by the assessee is dismissed.

Summary

Issues involved:
The issues involved in the judgment are the classification of imported goods under a specific sub-heading, the claim of benefit under a notification, and the eligibility for a nil rate of duty.

Classification of Imported Goods:
The appellant filed Bills-of-Entry for clearance of goods declared as "HYDROCORTISONE" classified under Sub-Heading No. 2937 2100. The duty was paid by way of debit in the scrip under Focus Market Scheme, and the goods were given 'Out of Charge' on a specific date.

Claim of Benefit under Notification:
The appellant requested re-assessment under Section 17(4) of the Customs Act, 1962, after noticing that the imported goods were assessed without claiming benefit under Notification No. 12/2012-C.Ex Sl. No. 105. The appellant argued that a clerical error led to the payment of duty, which should have been exempted under the said Notification.

Eligibility for Nil Rate of Duty:
The main issue to be decided was whether the appellant was entitled to a nil rate of Countervailing Duty (CVD) under the Notification. The Notification specified that bulk drugs specified in List 1 would attract nil rate of duty, including Hydrocortisone. However, the description of goods had to be read along with an explanation requiring the goods to conform to specified standards. The appellant failed to demonstrate compliance with the standards specified in the explanation, leading to the rejection of their claim for exemption.

Conclusion:
The Tribunal held that the appellant's claim for nil rate of CVD was not valid as they did not demonstrate that the imported goods conformed to the required standards. The appeal was dismissed, affirming the decision of the lower authorities.