9911796707
TMI Blog2001 (9) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... ulk either from abroad or indigenously and repacking in smaller packs and relabelling. Those three types of diagnostics were (i) Blood grouping reagents (classifiable under Chapter sub-heading 3005.90) (ii) diagnostic kits for biochemical analysis/testing of body fluids such as Glucose, Blood Urea, Triglycerides, Cholesterol etc. (classifiable under Chapter Heading 38.22) and (iii) Immunodiagnostic kits (Antisera, Blood fractions, Human serum, Human hormone, Bacterial fraction, Parasite antigens) for testing pregnancy, Hepatitis-B, ASO, RAF, CRP, Syphilis, Typhoid, T-3, T-4, TSH, FSH, Cortosol, Estradiol, Progesterone, Testosterone Ferritin etc. The third type of diagnostic kits cleared by the appellants during the period 1-3-1997 to 31-3-1998 without payment of duty was claimed by them to be classifiable under Chapter sub-heading 3002.00, for which the Tariff had provided Nil rate of duty. During that period, the appellants had no registration with the Department for manufacture of the goods and they had cleared the goods without observing Central Excise formalities. However, subsequently, the appellants filed classification declaration effective from 1-4-1998 with the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter Heading 38.22. As regards the disputed goods, in respect of which the party declared that the goods have Antisera or Blood Fraction as the component which provides them essential character , the party s claim is for classifying them under Chapter sub-Heading 3002.00, for which the Tariff provided Nil rate of duty for the period of dispute. On the other hand, the Department wants to classify the goods under Chapter sub-heading 3822.00 as diagnostic or laboratory reagents on a backing and prepared diagnostic or laboratory reagents whether or not on a backing, other than those of Chapter 30 , for which the Tariff rate of duty was 18% ad valorem at the material time. The appellants, contesting the allegations in the show-cause notice, contended that they were only repacking the bulk products obtained from foreign or indigenous sources, into smaller packs and relabelling and marketing such packs under their own brand name. They contended that the said activity did not amount to manufacture within the meaning of Section 2(f) of the Central Excise Act. This plea was rejected by the Commissioner on the strength of Chapter Note 5 in Chapter 38 of the Central Excise Tariff Schedule, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down that products whose antigen-antibody reaction corresponded to natural antisera and which were used for diagnostic or therapeutic purposes and for immunological tests were to be regarded as falling within the group of modified immunological products, whether or not obtained by means of biotechnological processes , which in turn, stood included under Heading 30.02. Ld. Counsel, further, relied on the Tribunal s decision in Inter Care Ltd. (supra). He further submitted that the appellants were under a bona fide belief, on the basis of the Tribunal s decision in Inter Care Ltd., that their products, some of them being diagnostic kits for the detection of pregnancy, were classifiable under Chapter Heading 30.02 and chargeable to Nil rate of duty. There was no intention on their part for evading payment of duty on the goods. Ld. Counsel, therefore, argued that there was no warrant for invoking the extended period of limitation against the party. Counsel submitted that a major part of the duty demand was time-barred, being outside the period of six months from the date of the show cause notice. He further submitted that, since the appellants had not indulged in any fraud or suppres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood etc. with the diagnostic kits in question, though done outside the human body, was meant for treatment of disease and hence antisera should be held to be principally used for therapeutic purposes only. Ld. SDR also submitted that, even according to the party s declaration, antisera/blood fractions were only one of the components of the products, which meant that the products were not pure antisera/blood fractions to be classified under Heading 30.02. He further submitted that the decision of the Tribunal in the case of Inter Care Ltd. (supra) was not applicable to the goods in question, as that decision only involved interpretation of a notification. 7. We have carefully examined the submissions. We find much force in the submission of the ld. Counsel that the adjudicating authority has passed the impugned order in violation of the principles of natural justice inasmuch as that authority has ignored many of the party s submissions. In their first letter dated 13-8-1998 in reply to the show-cause notice, the appellants had specifically requested for supplying certain documents/details viz. (i) copy of classification declaration filed under Rule 173B effective from 1-4-1998 (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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