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TMI Blog1990 (5) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ff Item 15-A on insistence by the Central Excise officers and have paid duty under protest, claiming that these products are classifiable under Tariff Item 68. 3. The Department, therefore, drew samples of the above products and sent the same to Deputy Chief Chemist, Bombay for chemical analysis. The report stated that the products Dimethicon-20, Dimethicon-350, Dimethicon-200, Dimethicon-1000 and Dimethicon-100 were polysilozane compounds (silicon oils) stated to have defoaming properties and product simethicon is in form of jelly like mass and was composed of silicon oil and silicon. Therefore, the Department on receipt of the report from the Deputy Chief Chemist, Bombay, issued a show cause notice dated 11-11-1984 to the respondents asking them to explain as to why the products should not be finally classified under Tariff Item 15-A in all those cases in which the classification had not been finalised. After taking explanation and giving an opportunity to the respondents to put forth their case, the Assistant Collector by his order-in-original held that these products in question are classifiable under Tariff Item 15A(1) of CET and the assessments were finalised accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and manufactured under Drug Control Licence, therefore, calling for classification under Tariff Item 68. By relying upon the ruling of this Bench in order No. 224/84-C dated 27-4-1984 in the case of Anand Synthochen Pvt. Ltd. v. Collector of Central Excise, Bombay in which at paras 8 and 9 it is observed as under : - The Notification No. 55/75-C.E. under which drugs are given exemption cannot classify a substance under Tariff Item 68 if there is a more suitable heading for it. Sodium lauryl sulphate has distinct surface active properties and is in fact used in patented preparations for this very property as it enables proper penetration of active therapeutic components otherwise into impenetrable tissues and areas. That it is used as a drug for healing or to aid in healing may be true but Item 68 is not a heading as it has no description or nomenclature. It covers only goods that cannot be covered by the preceding headings. Unless the product was not classifiable under headings, it cannot fall under Item 68 ibid. But sodium lauryl sulphate has a special heading under Item 15AA therefore it will be classifiable under that item." The Assistant Collector held that as the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a drug the product obtained a separate identity and character. He further submitted that it was manufactured under a Drug licence and sold only to drug authorities. It was his contention that it has to be considered as a pharmacopoeial drug. He drew analogy that petroleum jelly being a petroleum product was considered as a drug and taken as a pharmacopoeial drug. He again submitted that bone consumption was coming under pharmacopia and it was taken out under 15A. He relied upon the following citations - 1. Elpro International Ltd. and Others v. Jt. Secy Govt. of India, Ministry of Finance Others - 1989 (19) E.L.T. 3 (SC) 2. Collector of Central Excise v. Johnson and Johnson Ltd. - 1989 (43) E.L.T. 699 (Tribunal) 3. J.L. Morison, Son Jones (India) Ltd., Bombay v. Collector of Central Excise, Bombay - 1984 (15) E.L.T. 251 (Tribunal) 4. Collector of Customs, Bombay v. Dr. D.D. Tanna, Bombay - 1983 E.L.T. 1137 (CEGAT) 5. Pacific Exports v. Collector of Customs, Bombay - 1990 (45) E.L.T. 651 (Tribunal) = 1989 23 ECR 365 (CEGAT) 6.Haresh Brothers v. Collector of Customs - 1989 (40) E.L.T. 122 (Tribunal) 7. Oil Dale Trading Pvt. Ltd. v. Collector of Customs, Calcutta - 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered for the purpose of countervailing duty. It was classifiable under sub-heading 3003.20. In the same case, the liquid paraffin was held as not to be lubricating oil in view of its end use. It was also held that liquid paraffins, not being patent or proprietary goods, are classifiable as medicaments under sub-heading 3003.20 CET 15. In Haresh Brothers case (supra) the classification of paraffin liquid was considered under Tariff Item 68 as the product being of pharmacopoeial grade and non-proprietary goods as drugs. 16. In Oil Dale Trading Pvt. Ltd. case (supra) the white petroleum jelly of USP grade were correctly classified for countervailing duty under Item 68 of CET Schedule. 16A. In Johnson and Johnson Ltd. s case (supra) the classification of coated surgical pink cloth not adhesive tape was considered and found classifiable under Item 14E and not under Item 60. 17. The Larger Bench decision as reported in the case of Collector of Central Excise v. Hico Products - 1988 (34) E.L.T. 643 relied by the Revenue dealt with silicone oil, silicone fluid in primary form and as noted by us, in para 8 of the order, it has been held that resin or a plastic material which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation (II) and (III) below Tariff Item 15A. It was held by the Tribunal in that case that Explanation II Item 15A only explains condensation, Poly-condensation, Polymerisation, co-polymerisation and silicone oil in emulsion form comes within the mischief of this Explanation III. Two explanations together bring silicone emulsion within the mischief of Item 15A of Central Excises Tariff. 21. In Precise Impex Ltd. case [1989 (40) E.L.T. 440], the Tribunal held that silicone in primary stage was classifiable under Item 15A(1) of the CET whereas a preparation containing silicone in emulsion form would not merit classification under T.1.15A(1). This was the same view as taken in the case of Hico Products v. C.C.E. as reported in [1985 (19) E.L.T. 214]. The Larger Bench decision of this Tribunal in Collector of Customs, Bombay v. Hico Products Ltd. [1988 (34) E.L.T. 643] was also pertaining to this issue of silicone fluid in primary form and also dealt with silicone including resins, elastomers and fluids and fluids in turn includes oil. It had further held that there is nothing in the tariff that a fluid must have resinous properties or plasticity. Only a resin is required if fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... silicone oil and silica. On the basis of this report of Dy. Chief Chemist and in view of rulings of this Tribunal, the Asstt. Collector in the order-in-original, had reclassified the products under T.I. 15(A) (1) of CET. The Collector (Appeals) in the impugned order, however, as observed by us, had held that the products in question conform to pharmacopoeial standards and are recognised as drugs. He had observed that the Asstt. Collector had not gone into this question and therefore, he had directed the Asstt. Collector for drawing fresh samples and having them tested to determine whether the goods have resinous character or not. It is curious to note that when the Collector (Appeals) has given such a direction to the Asstt. Collector, then it is surprising as to why he allowed the appeal and classified the products under T.I. 68 without waiting for the finding from the Asstt. Collector with regard to the pharmacopoeial standards of the products. 25. The respondents have contended basing on the technical literature produced by them that the products in question are drugs. The respondents contention is that the product confirms to pharmaceutical standards and therefore, it is a d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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