1988 (6) TMI 242 - AT - Central Excise

Summary

Issues: Classification of imported goods as drugs under Central Excise Tariff Item 68 and eligibility for exemption under Notification No. 55/75.

Analysis:
1. The case involved the import of liquid paraffin consignments by the appellants, initially classified under Tariff Heading 27.10(1) Customs Tariff Act. The appellants sought a refund, claiming the goods were drugs and should be classified under Central Excise Tariff Item 68, exempt from countervailing duty under Notification No. 55/75.
2. The Assistant Collector rejected the refund claims due to lack of information on end product and drug license. On appeal, the Collector of Customs (Appeals) accepted that the goods were drugs but required proof of marketing as drugs to avail the exemption.
3. The appellants argued that the condition of marketing imposed by the Collector (Appeals) was beyond the terms of Notification 55/75, citing relevant judgments. The Department contended the goods should be classified under Tariff Item 68, referencing a Tribunal decision.
4. The advocate for the appellants emphasized that the goods were drugs, supported by the lower appellate authority's decision. He also highlighted the Tribunal's precedent on liquid paraffin assessment and the absence of required tests for assessment under Tariff Item 8.
5. The Tribunal agreed with the appellants, confirming the goods as drugs covered by Notification 55/75. The condition imposed by the Collector (Appeals) was deemed unwarranted for pharmacopoeial grade drugs. The Department's implication of importer being an actual user was rejected, as the goods were admitted to be drugs under Item 68 Central Excise Tariff.
6. Consequently, the appeal was allowed in favor of the appellants, with the Department's appeals dismissed, affirming the classification of the imported goods as drugs under Central Excise Tariff Item 68 and eligibility for exemption under Notification No. 55/75.