1990 (10) TMI 203 - AT - Customs

Summary

Issues:
Classification of imported goods under Heading 29.01/45(13) of the Customs Tariff Act, 1975 as pharmaceutical chemicals for duty purposes.
Eligibility for exemption under Notification 33/83 based on the classification of goods.

Detailed Analysis:

Issue 1: Classification under Heading 29.01/45(13) CTA
The appellants imported Amidotrizoic Acid USP and initially cleared it under Heading 29.01/45(10) as Acids not elsewhere specified. They later filed a refund claim seeking classification under Heading 29.01/45(13) as pharmaceutical chemicals. The Deputy Collector rejected the claim, stating no evidence proved the material's sole or predominant use as a drug. The Collector (Appeals) upheld this decision, relying on the Assistant Drug Controller's opinion. The appellants argued that the material, meeting USP standards and used in radiology, should be considered a drug. They cited Martindale's Extra Pharmacopoeia and the CVD exemption granted, claiming correct classification under Heading 29.01/45(13).

Issue 2: Eligibility for Exemption under Notification 33/83
The Assistant Drug Controller's report mentioned the material as a diagnostic aid, not a therapeutic drug. The Respondent contended that Heading 29.01/45(13) covers chemicals with therapeutic value used predominantly as drugs. They argued that even the CVD exemption under Notification 234/82 did not support the appellants' claim, as it had a broader scope than Heading 29.01/45(13) CTA. The Tribunal analyzed whether Amidotrizoic Acid met the criteria of being pharmaceutical chemicals with prophylactic or therapeutic value used predominantly as drugs, as per the Customs Tariff Act. It concluded that the material, used solely as a contrast media in radiology, lacked curative or preventive properties, failing to qualify as pharmaceutical chemicals under Heading 29.01/45(13) CTA. The Tribunal referenced a previous case where a similar argument was made, resulting in denial of exemption under Notification 33/83 for a different substance. Consequently, the Tribunal upheld the lower authorities' decisions, rejecting the appeal.

This judgment clarifies the stringent criteria for classifying goods as pharmaceutical chemicals under specific headings of the Customs Tariff Act and the importance of demonstrating therapeutic or prophylactic value for eligibility under relevant notifications.