Central Excise - Chapters 30 & 35 - Classification of PapainI. P. etc., - Whether under Chapter 30 as Medicament or under Chapter 35 as Enzymes - Central Excise - 16/89

Central Excise - Chapters 30 35 - Classification of <?xml:namespace prefix = st2 /> Papain I. P. etc., - Whether under Chapter 30 as Medicament or under Chapter 35 as Enzymes Circular No. 16/89 Dated 6-3-1989 [From F. No. 128/1/89-CX.3] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Chapters 30 35 - Classification of Papain I. P. etc., - Whether under Chapter 30 as Medicament or under Chapter 35 as Enzymes. A doubt had been raised as to whether goods like Papain I.P., Fungal Alpha I. P., Bacterial Alpha Amylase I. P. etc., would be classifiable under sub-heading No. 3003.20 attracting a nil rate of duty or under sub-heading No. 3507.00 attracting a duty @ 15 per cent ad valorem. 2. The matter came up for discussion at the South Zone General-cum-Tariff Conference of Collectors of Central Excise held at Hyderabad on 23rd and 24th January, 1989. The point was sponsored by C.C.E., Bangalore. The Collector informed the Conference that a manufacturer in Bangalore is manufacturing Papain I. P., Fungal Alpha Amylase I. P., Bacterial Alpha Amylase I. P., Papsin I. P., Pancreatin I. P.; and they have claimed classification of these items as 'Medicaments' under sub-heading No. 3003.20 chargeable to nil rate of duty. The Department viewed that such products would merit classification under sub-heading No. 3507.00 attracting duty at 15 per cent ad valorem. The manufacturer had informed the Collector that, in the Collectorates of Hyderabad and Aurangabad, similar enzymes and other products aforementioned are being cleared at 'nil' rate of duty under sub-heading No. 3003.20. 3. It is reported that all these are enzymes are being cleared in bulk. These are used in the manufacture of beverages and in tendering meat as reported by the Collector. To merit classification as a medicament under heading No. 30.03, the goods should satisfy the conditions laid down in Note 2(i)(a) and Note 2(i)(b). Note 2(i) to Chapter 30 makes it clear that any product, to merit classification as medicament under heading No. 30.03, should either be a product comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses or in case of unmixed products, it should be suitable for such uses put up in measured doses or in packings for retail sale or for use in hospitals. A view was expressed that since the products in question are being sold in bulk form, those cannot be held to be medicaments as per note 2(i) to Chapter 30. Further, it was noted that heading No. 35.07 of HSN of the CET covers Enzymes and prepared Enzymes. In this connection, reference was made to HSN Explanatory notes under heading 35.07 at pages 498 to 501 wherein enzymes of various types like Pancreatic Enzymes, Papain and different types of Amylases like Bacterial Alpha and Fungal Amylases are shown as covered under heading No. 35.07. In view of the specific coverage of enzymes under heading No. 35.07 as discussed above, it was concluded that the enzymes in question would not merit classification under sub-heading No. 3003.20 as medicaments, but would merit classification as enzymes under heading No. 35.07. 4. The Board agrees with the above views of the Conference and accordingly holds that the Enzymes in question would be appropriately classifiable under sub-heading No. 3507.00, and not under sub-heading No. 3003.20 as 'Medicaments'. 5. The above guidelines may please be brought to the notice of the lower field formations and the trade interests may also be suitably advised. 6. All pending assessments may be finalised on the above basis.