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Issues Involved:
1. Classification of imported goods (Sugar of Milk) under Customs Tariff Heading (CTH) 1702.10 or CTH 3004.90. 2. Applicability of the benefit of Notification No. 58/85-Cus. 3. Time-barred demands under Section 28 of the Customs Act, 1962. Issue-Wise Detailed Analysis: 1. Classification of Imported Goods: The primary issue was whether the imported goods, described as "Homeopathic Medicine (Single) Sugar of Milk 200 Mesh HMS," should be classified under CTH 1702.10 as "Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form" or under CTH 3004.90 as "Medicaments... for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale." The appellants argued that the imported goods were homeopathic medicines, supported by certificates from the Director of Homeopathic Pharmacopoeia Laboratory and other technical literature. They contended that the goods were of pharmaceutical grade and used in homeopathic treatments, thus falling under CTH 3004.90. They also emphasized that the goods were sold in retail packing to hospitals and were not of edible grade lactose. The Department, however, maintained that the goods were chemically pure lactose, classifiable under CTH 1702.10. They referred to Chapter Note 1(b) of Chapter 17, which includes chemically pure lactose, and the Explanatory Notes of the Harmonized System of Nomenclature (HSN), which describe lactose as used in pharmacy among other uses. The Tribunal examined the technical literature and the certificates provided by the appellants but found that the certificates were not supported by substantial technical evidence. The Tribunal noted that lactose, as described in the technical literature, is an inert substance used as a vehicle in remedies, which does not qualify it as a medicament with therapeutic or prophylactic properties under CTH 3004.90. The Tribunal concluded that the imported goods were correctly classifiable under CTH 1702.10, as they did not meet the criteria for classification as medicaments under CTH 3004.90, which requires specific indications for therapeutic or prophylactic use on the packaging. 2. Applicability of Notification No. 58/85-Cus: The appellants claimed that the imported goods should benefit from the concessional rate of duty under Notification No. 58/85-Cus, which applies to goods classified under CTH 3004.90. However, since the Tribunal determined that the goods were classifiable under CTH 1702.10, the benefit of Notification No. 58/85-Cus was not applicable. The Tribunal referred to previous case law, including the Supreme Court's judgment in Mohindra and Mohindra Ltd., which held that exemption notifications cannot determine the classification of goods. The Tribunal also noted that Notification No. 28/90-Cus, dated 20-3-1990, clarified that lactose falls under CTH 1702.10, supporting the Department's classification. 3. Time-Barred Demands: The Collector (Appeals) had held that two of the four less charge demands were time-barred under Section 28 of the Customs Act, 1962, which imposes a six-month limitation period. The Tribunal upheld this finding, confirming that the demands covered by S/2-154/89 Gr. 2A in respect of bill of entry Cash No. HC 6725/20-12-1988 and HC 1490/8-9-1988 were barred by limitation. Conclusion: The Tribunal upheld the classification of the imported goods under CTH 1702.10 and denied the benefit of Notification No. 58/85-Cus. It also confirmed that two of the less charge demands were time-barred. The appeals were rejected, and the impugned order was upheld.
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