1996 (7) TMI 212 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods as "ELISA Diagnostic Tests"
2. Eligibility for exemption under Notification 208/81-Cus
3. Legality of seizure and confiscation under Section 111(m) of the Customs Act, 1962
4. Adequacy of evidence provided by the importer
5. Reliance on expert opinions and technical literature

Detailed Analysis:

1. Classification of Imported Goods as "ELISA Diagnostic Tests":
The primary issue was whether the imported Pregnancy Detection Kits/Test, branded as "CLEARVIEW HCG," could be classified as "ELISA Diagnostic Tests" for customs purposes. The department argued that the kits did not qualify as ELISA tests since they did not involve an enzyme, a fundamental characteristic of traditional ELISA tests. The National Institute of Immunology confirmed that the kits were based on antibodies coupled to blue beads, not enzymes. However, the importers contended that the kits represented a new generation of ELISA tests, using a color conjugate system instead of enzymes, and were recognized as such in the medical community.

2. Eligibility for Exemption under Notification 208/81-Cus:
The importers claimed exemption from duty under Notification 208/81-Cus, which exempts ELISA diagnostic tests from customs duty. The department contested this, arguing that the absence of an enzyme meant the kits did not meet the criteria for ELISA tests. The importers provided extensive evidence, including certificates from medical experts and a license from the Drug Controller, to support their claim that the kits were indeed ELISA tests.

3. Legality of Seizure and Confiscation under Section 111(m) of the Customs Act, 1962:
The department seized the goods under Section 111(m) of the Customs Act, 1962, alleging willful misdeclaration by the importers. The importers argued that the seizure was illegal since the goods had already been cleared by customs authorities. They also contended that the proper officer of customs could invoke Section 111 only at the time of clearance, not post-clearance.

4. Adequacy of Evidence Provided by the Importer:
The importers submitted various documents to support their claim, including:
- Certificates from medical experts and institutions.
- A license from the Drug Controller describing the product as an ELISA test.
- Scientific articles and technical literature.
The Collector found these materials sufficient to support the importers' claim that the kits were recognized as ELISA tests in the medical community and commercial parlance.

5. Reliance on Expert Opinions and Technical Literature:
The department relied on the opinion of the National Institute of Immunology and the Handbook of Practical Immunology to argue that the kits did not qualify as ELISA tests. However, the Collector noted that these sources did not conclusively rule out the possibility that the kits could be considered ELISA tests. The Collector emphasized that exemption notifications should be interpreted based on common or trade parlance rather than strict technical definitions, citing Supreme Court judgments in similar cases.

Conclusion:
The Collector concluded that the importers had produced sufficient evidence to demonstrate that the imported kits were recognized as ELISA tests in the medical community and commercial parlance. The order emphasized that advancements in technology, such as the use of color conjugates instead of enzymes, did not disqualify the kits from being considered ELISA tests. The appeal by the revenue was dismissed, and the Collector's order was upheld, granting the importers the benefit of the exemption under Notification 208/81-Cus.