2016 (9) TMI 172 - AT - Customs

Availment of exemption under Advance License Scheme - Classification of imported goods crude Iodine pure Iodine advance license scheme benefit under Exemption Notification No. 43/2002-Cus. SION of pure iodine and iodine crude different Held that - the iodine having 99.8% purity has been considered as crude iodine, which indicates that the iodine having 100% purity can only be considered as pure or refined iodine, which is other than the crude iodine. The imported goods admittedly having iodine assay 99.9% also contain chlorine and bromine and non-volatile matter, therefore, it contains some impurities, and is not pure iodine - goods imported by the appellant qualifies as crude iodine, hence eligible for exemption claimed by them under Advance License Scheme appeal allowed decided in favor of appellant.

Summary

Issues:
Classification of imported goods under Advance License Scheme as crude iodine or pharmaceutical grade iodine.

Analysis:
The appellant, M/s Champa Purie-Chem Industries, imported Iodine Prilled of 99.9% purity claiming exemption under Advance License Scheme. The dispute arose when the authorities classified the imported goods as pharmaceutical grade iodine instead of crude iodine, based on the opinion of the Deputy Chief Chemist (DYCC). The appellant argued that the goods, with 99.9% purity, should be considered crude iodine, as it contains chlorine, bromine, and non-volatile matter. The appellant contested the reliance on DYCC's report, stating it lacked independent testing and reasoning. The appellant also highlighted a previous tribunal decision where iodine of 99.8% purity was classified as crude iodine. Additionally, the appellant pointed out that according to a technical opinion from IIT Madras, pure iodine should have an assay greater than 99.99% and be free from impurities, which the imported goods did not meet. The appellant also emphasized that there is only one entry for iodine under Customs Tariff, supporting their claim for exemption regardless of classification.

The Revenue, represented by the Addl. Commissioner, supported the classification of the goods as pharmaceutical grade iodine based on the DYCC's opinion, which deemed the imported iodine with 99.9% purity as other than crude iodine, thus denying the exemption under the Advance License Scheme.

The Tribunal carefully analyzed the submissions and found that the DYCC's opinion lacked a basis for classifying the product as pharmaceutical grade iodine. The certificate of analysis from the foreign supplier indicated the purity levels but did not specify the grade of the iodine. Referring to a previous tribunal decision, the Tribunal noted that iodine with 99.8% purity was considered crude iodine, suggesting that only 100% pure iodine could be classified as refined iodine. The Tribunal also referenced a technical opinion from IIT Madras, stating that pure iodine should have an assay greater than 99.99% and be free from impurities, which the imported goods did not meet. Additionally, commercial sources considered iodine prills with 99.9% purity as crude iodine. Therefore, the Tribunal concluded that the imported goods qualified as crude iodine and allowed the appeal, setting aside the impugned order.

In conclusion, the Tribunal's decision favored the appellant, M/s Champa Purie-Chem Industries, by classifying the imported iodine with 99.9% purity as crude iodine, making them eligible for the exemption claimed under the Advance License Scheme.