1997 (8) TMI 211 - AT - Customs

Drugs - Bulk Drugs - Exemption under Notification Nos. 36/96-Cus. and 8/96-C.E. not available

Summary

Issues:
1. Whether the imported goods qualify as a 'bulk drug' for the purpose of exemption under Notification No. 36/96-Cus. and Notification No. 8/96-C.E.

Detailed Analysis:

1. Import Classification and Claim for Exemption:
The appellant filed a Bill of Entry mentioning the goods as 'Monosodium Glutamate.' The examination revealed the goods were imported in 100 gms packets with a description indicating their use as a flavor enhancer in the food industry. The appellant claimed exemption under Notification No. 36/96-Cus. and Notification No. 8/96-C.E. The Assistant Collector denied the exemption citing reasons such as the goods being imported in consumer packs, lacking NF grade indication, and primarily used in the food industry rather than for life-saving medicine production.

2. Arguments of the Appellant:
The appellant argued that the goods met the purity and strength standards of NF, a recognized pharmacopoeia in the U.S., and were used for treating specific medical conditions. The appellant contended that the end-use condition imposed by the authorities was irrelevant to the exemption notifications.

3. Respondent's Position:
The JDR reiterated the lower authorities' findings, emphasizing the lack of NF grade indication on the packaging and the stated use as a flavor enhancer. The respondent argued that the goods did not meet the criteria of being used for manufacturing 'intravenous amino acids.'

4. Precedent and Legal Arguments:
The appellant cited a Tribunal judgment and a Bombay High Court case to support the argument that the capability of use as a drug or in a formulation was sufficient to qualify as a bulk drug. The representative sought the appeal's approval based on these legal precedents.

5. Tribunal's Decision:
The Tribunal analyzed whether the imported goods could be classified as a bulk drug. Despite meeting NF standards, the goods were imported in consumer packs for food industry use, and the appellant was a trader, not a drug manufacturer. Referring to a Supreme Court case, the Tribunal concluded that mere compliance with pharmacopoeia standards did not automatically classify a product as a drug. Considering all circumstances, the Tribunal held that the goods were not a bulk drug, thus denying the appellant's claim for exemption under the relevant notifications.

Conclusion:
The Tribunal rejected the appeal, ruling that the imported goods did not qualify as a bulk drug, and therefore, the appellant was not entitled to the benefits under the exemption notifications.