9911796707
TMI Blog1984 (8) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... red as Registered Exporters. The Customs, however, did not permit clearance on the ground that the goods were found to be Diethylene Diamine Hexahydrate of Pharmacopoeia grade, which were canalised items as per the Import Policy for the year 1982-83 (hereinafter to be referred to as the Policy ). A show cause notice was issued to the appellants as to why the two consignments should not be confiscated and why penalty should not be imposed. In their reply, the appellants disputed that the goods are Piperazine Hexahydrate of pharmacopoeia grade. They contended that the imported goods are not Diethylene Diamine Hexahydrate or Diethylene Diamine Anhydrous and that they are not banned items and further contended the goods were not a drug but drug intermediate used for the manufacture of Diethylene Diamine Anhydrous or Hexahydrate and being Registered Exporters they are governed by para 185 of the Import Policy and therefore they are entitled to import the goods under OGL against their licences. The Additional Collector of Customs after affording a personal hearing to the appellants and after consideration of the materials placed before him recorded a finding as under :- In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning. The Additional Collector failed to appreciate that the sample drawn from the imported goods indicated that the goods were in lumps as opposed to the sample of Piperazine Hexahydrate produced by the appellants at the personal hearing on 11-8-1983, which was in crystals. The mere comparison of the two samples would have satisfied, that the imported goods was not Piperazine Hexahydrate or Piperazine Anhydrous. The Additional Collector failed to consider that Section 10 of the Drugs and Cosmetics Act, 1940 prohibited import of drugs which are not of standard quality. As per Section 8 of the said Act, standard quality means that the drug should satisfy the standard set out in 2nd Schedule to that Act and the standard specified in the 2nd Schedule is with regard to identity, purity and strength as specified in Indian Pharmacopoeia and if that drug is not specified in Indian Pharmacopoeia then it should satisfy standards of identity, purity and strength specified in the Pharmacopoeia of any other country. Having regard to the provisions of Sections 8 and 10 of the Drugs and Cosmetics Act even the canalising agency cannot import as drug any substance which does not comply with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h BP, USP 80 but in so far as Column 7 is concerned, his certificate is silent. Further, the Chief Chemist has not given the melting and boiling points. Therefore comparative study is not possible. As per the Pharmacopoeia, percentage of Piperazine would be 98% in anhydrous and 44% in Hexahydrate, but the percentage found by the Chief Chemist in one sample is 73.6% and in another 80.6% and, therefore, the imported goods is neither anhydrous nor hexahydrate. It could only be a drug intermediate or raw material for the manufacture of a drug and not a drug. In the policy, two items of Piperazine are canalised, viz., Piperazine Anhydrous and Piperazine Hexahydrate and therefore, if the imported goods is not anhydrous or hexahydrate the import cannot be objected to on the ground that they are canalised. Being Registered Exporters, and having obtained the necessary endorsements on the REP licences, the appellants were entitled to import drugs and drug intermediates by reason of item 52 list 8 of appendix 10. All the test reports, including Chief Chemist s certificate disclosed that the imported goods had water contents varying from 19.3% to 55.66% and therefore the imported good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemist is an independent authority and the certificate issued by him prevails over all other certificates. Piperazine as a drug is marketed only in the form of Anhydrous or Hexahydrate or in the form of its salts like Piperazine Citrate, Piperazine Adipate and Piperazine Phosphate. The substance Diethylene Diamine Technical is unknown to the trade and it is neither found in the Chemical Dictionary nor in any pharmacopoeia. The import under OGL would be subject to the conditions specified in Appendix 10 and therefore the items canalised under Appendix 9 cannot be imported under OGL. 6. In reply, Shri C.R. Patel, the learned Advocate for the appellants contended that the imported goods is a drug intermediate and therefore cannot find place either in a Chemical Dictionary or in any Pharmacopoeia. If the intention of the Policy makers was to canalise Piperazine in any form, the intention should have been made clear in the policy and the two items canalised are anhydrous and hexahydrate and not all hydrates. 7. Shri C.R. Patel, the learned Advocate who appeared for the appellants made it abundantly clear that the appellants do not require the matter being remanded because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drous/hexahydrate . Paragraph 218(4) which has relevance to the issues involved reads : In the case of drugs appearing in Appendices 3, 5 and 9, the names mentioned: - (i) refer to the respective active ingredients, or (ii) are as they are commonly known. Each entry includes the salts and esters of the same drug, if any. If entry 14 of Appendix 9 is read along with paragraph 218(4) of the Policy it becomes clear that what has been canalised is not only Piperazine anhydrous/Hexahydrate but also their active ingredients, salts and esters. It has been the contention of the appellants that what had been imported by them is not at all a drug and therefore not a canalised item and in any case it is neither Piperazine anhydrous nor Hexahydrate nor their active ingredients, salts and esters. They contended that the imported goods are Diethylene Diamine Technical, a product not conforming to any pharmacopoeial standard. It is a down-stream product coming last after products like Ethylene Diamine etc. are obtained. Their further contention was that Piperazine Anhydrous U.S.P. and Piperazine Hexahydrate B.P.C. and their salts like Piperazine Citrate, Piperazine Adipate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esence of many hydrated forms. Finally, Dr. Patwardhan certified that : The sample does not confirm to Piperazine Hexahydrate BP 80 and Piperazine Anhydrous U.S.P. XX and therefore the same cannot be a Drug. Further, the sample definitely merits the classification as chemical compound because the same has specified melting point and the water of hydration is chemically bonded with Diethylene Diamine Molecule and the same is not a physical mixture of water and Diethylene Diamine. The Assistant Drug Controller, Bombay, in his letter, Exhibit D had stated : The sample on test by M/s. Chem. Med. Lab. Ltd., Bombay is found to be not (Diethylene Diamine) Piperazine Anhydrous U.S.P. or (Diethylene Diamine hydrate BP) Piperazine Hydrate BP. Copies of test report attached. It appears to be some impure Diethylene Diamine hydrate with moisture around 30.72% w/w/ and Melting point around 72C. The goods are also marked only as Diethylene Diamine Hydrate Tech. (63.9 to 68.6%) and no pharmacopoeial standards are claimed. In view of this, the item may not fall under the category of drugs but will qualify as chemical compound in the manufacture of Piperazine salts conforming to USP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.72% w/w/ (Limit : 2.0% 2/2 maximum) 6. Colour of solution Complies with U.S.P. test. 7. Nitrogen content 32.77% on anhydrous basis (Limits : 31.5% to 33.0%) 8. Primary Amine and Ammonia Complies with U.S.P. test. 9. Content of Piperazine (C 4 H 10 N 2 ) 98.4% on anhydrous basis. (Limits : to 98.0% 101.0%) Opinion : In the opinion of the undersigned the sample referred to above IS NOT OF STANDARD QUALITY as defined in the Act and the Rules thereunder for the reasons given below. The sample does not comply with prescribed standards as per U.S.P. XX (WITH RESPECT TO MELTING POINT AND WATER). (2nd certificate). As per PIPERAZINE HYDRATE B.P. 1980 1. Description : White deliquescent crystals, having an ammoniocal odour. 2. Solubility : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplies -do- 6. Sulphated Ash (As per B.P. 1980) Complies -do- 7. Assay (as per B.P. 1980 on dried samples expressed as piperazine C 4H10N2 ) 73.6% 80.6% 8. Total water content (Azeotropic toluene distillation method as given in Pharma- copedia) 20.0% 19.3% B. As seen from the above analytical report the active ingredient in the goods is entirely piperazine (Diethylene Diamine, Piperazine Hexahydrate, Piperazidine C 4H10N2). C. Whether drugs of pharmacopieal grade or not : It reveals from the above analytical report that the samples are free from the impurities which would be detrimental for their use as drug. Since piperazine has multifarious uses including its use as an anthelmintic (in the treatment of round wormsascaris and thread worms-entirobius) in the form of its various salts including elixir and the doses are usually expressed in terms of piperazine hydrate (vide Martindale-The extra pharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression Hydrate the learned author refers to Hydration and the Expression Hydration is described as : Hydration : (1) The reaction of molecules of water with a substance in which the H-OH bond is not split. The products of Hydration are called hydrates, i.e. CusO 4 +5H 2 O-CuSO 4 .5H 2 O A given compound often forms more than one hydrate; the hydration of sodium sulfate can give Na 2 SO 4 .10H 2 O (decahydrate), Na 2 SO 4 .7H2O (Heptahydrate) and Na 2 SO 4 .H 2 O (monohydrate). In formulas of hydrates, the addition of water molecules is conventionally indicated by a centred dot. The water is usually split off by heat, yielding the anhydrous compound. See also water of crystallization, gas hydrate. At page 819 of the same book-Piperazine, its properties and uses are given as under :- Piperazine (diethylenediamine; pyrazine hexahydride; piperazidine) NH CH 2 CH 2 NH CH 2 CH 2. Properties : Colourless, deliquescent, transparent, needle-like crystals, which absorb carbon dioxide from the air. Soluble in water, alcohol, glycerol and glycols. M.p. 104-107 o C . Flash point 190 o F (87-70C). Cum-bustible; low ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 125 mg of piperazine citrate, and to 104 mg. of piperazine phosphate. In British Pharmacopoeia 1980, Vol. I, page 353, Piperazine Hydrate is described as : C 4 H 10 N 2 , 6H 2 O 194.2 142-63 2. Piperazine Hydrate contains not less than 98.0 per cent of C 4 H 10 N 2, 6 H 2 O . In U.S. Pharmacopoeia, 15th edition, page 629, Piperazine is described as : C 4 H 10 N 2, Piperazine contains not less than 98.0 per cent and not more than 101.0 per cent of C4H10N2, calculated on the anhydrous basis. Packaging and storage-preserve in tight containers, protected from light. In Section 3(b) of the Drugs and Cosmetics Act, the Expression Drug is defined as under :- (b) drug include: - (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of diseases in human beings or animals; and (ii) such substances (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals, as may be specified from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh it is permissible to import drugs/drug intermediaries listed in list 8 of Appendix 10 under OGL, the importer of those items has to comply with the conditions specified in Appendix 10. He pointed out that the items listed in list 8 are allowed to be imported subject to Actual Users condition. Items allowed to the Actual Users (Industrial) and (non-Industrial) are set out in Appendix 10. They are items 1 and 16. The relevant portions of appendix 10 reads : The categories of importers, the items allowed to be imported by them under Open General Licence and the conditions governing their importation are set out below :- Items Categories of eligible importers 1. Raw materials/components and consumables (Non-iron and steel items) other than those included in the appendices 3, 4, 5, 8, 9 and 15. Actual Users (Industrial). This entry permits Actual User (Industrial) to import raw materials, consumables other than iron and steel items and other than those included in the Appendices 3, 4, 5, 8, 9 and 15. -A drug could be raw material and therefore it could be impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appearing in list 8 of the Appendix 10 because of general condition No. 17. The facility allowed or available to the Export Houses in so far as import of raw materials, components and consumables and spares is certainly not greater than the Facility available to Actual Users (Industrial) under Appendix 10. The appellants were conscious of the limitations and restrictions placed on them and therefore the appellants sought clearance only under item 1 of Appendix 10. We therefore reject the contention of Shri Patel that the two licences which the appellants acquired permitted the import of canalised items. 13. Answer to Question No. 2 : The question that arises for consideration is whether the goods imported by the appellants are canalised items. Shri Jain the learned Departmental Representative contended that all the analytical reports established that Piperazine is an active ingredient of the imported goods and therefore the imported goods shall have to be treated as canalised item. Shri Patel on the other hand contended that what has been canalised is not an active ingredient of a substance or a chemical but only active ingredient of a drug specified in Appendix 9. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohydrocar-bons) with ammonia (see Vol. 2, p.349). Reaction conditions vary but in all cases a mixture is obtained. At comparatively low temperatures and pressures, predominantly ethylenediamine is formed in low yield. At higher temperatures and pressures the yields are greater and the proportion of the polyethylene polyamines is higher. In one production method, ethylene dichloride is forced under pressure into an excess of anhydrous ammonia vapors at 150 o C (43). Anhydrous needles of ethylenediamine hydrochloride are obtained, which, on treatment with caustic soda at 100oC, yield the free amine. The diamine vapors. steam, and unreacted ammonia are led to a dehydrating column where the diamine is dried and condensed. In another procedure, ethylene dichloride is treated with excess aqueous ammonia in a pressure-tight reaction chamber at 110 o C and 10 atm(44). The mixture of reaction products containing ethylenediamine hydrochloride, ammonium chloride, and ammonia in equeous solution is heated with aqueous caustic soda and is fractionated. The ethylenediamine is drawn off and the ammonia released from the ammonium chloride is returned to the reaction vessel. The manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is thus seen that according to the first set of certificate issued by Dr. Patwardhan the imported goods is either a Chemical or a drug intermediate. Being an expert the Doctor should have been in a position to state definitely as to whether it is a chemical or a drug intermediate. If the imported goods is a chemical it should find place in any one of the Chemical Dictionaries. The appellants have not chosen to produce any dictionary where Diethylene Diamine Technical is defined or described. Dr. Patwardhan no doubt stated that the imported goods could be classified as a drug intermediate. He has not chosen to give any reasons as to why the imported goods should be classified as a drug intermediate. A substance becomes an intermediate if it is a precursor to a desired product. The appellants are not manufacturers. They have not produced any literature to show that Diethylene Diamine Technical is a precursor of Piperazine. In his certificate Dr. Patwardhan has stated that the drug intermediate is a drug which comes into existence in the process of manufacture of an end product. This cannot be accepted. Therefore, we are not inclined to place much reliance on the certificate date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. There is no dispute piperazine is a compound. Similarly, water is a compound. If the imported substance is a compound of two compounds, viz., Piperazine and water it should have a definite formula and it cannot have xH 2 O, as has been mentioned in exhibit M .x indicates indefiniteness. It is significant to note that in exhibit M . Molecular weight is given as 86.14 (Anhydrous). This molecular weight represented the molecular weight of Piperazine only. If the substance is a chemical compound the molecular weight should be more than 86.14%. Therefore, we are unable to agree that the imported goods is a compound of Piperazine and water or a chemical compound. The appellants also did not produce any evidence that in trade parlance or commercially a product Diethylene Diamine Technical exists. Shri Patel then contended that it is not sufficient if the department establishes that the imported goods is not a chemical or a chemical compound but it has to establish that it is either an anhydrous or hexahydrate of Piperazine of pharmacopoeial grade. 14. Shri Patel argued that what had been canalised under item 14 of Appendix 9 of the policy are drugs of standard quality an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugs or class of drugs not being of standard quality. It is not all drugs which are not of standard quality the import of which is prohibited under the Act. It is only such of the drugs which are to be directly used as medicines and if they are not of standard quality then import of those drugs are prohibited under the Act. The Act itself makes distinction between the drugs of standard quality and other types of drugs. Under the Act a drug could be of standard quality or it may be an adulterated drug a misbranded drug or a crude drug. It will still be a drug. In the policy in Appendix 9 the expression used is drugs and not drugs of pharmacopoeial grade. On careful consideration of all the aspects, we unhesitatingly reject the contention of Shri C.R. Patel that the drug specified in appendix 9 should be drugs of pharmacopoeial grade. 15. Let us now proceed to examine whether the imported goods is piperazine anhydrous/hexahydrate. The Chemed Analytical Laboratories found 98% of piperazine in the two samples analysed by them. This was in an anhydrous state. Italab however, found 69.10%, 70.19% and 67.02% in the 3 samples analysed by them. But their reports does not indicate as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cent and not more than 101.0 per cent of C 4 H 10 N 2 , calculated on the anhydrous basis. The water content in the samples could be the moisture content. It is significant to note that the imported goods were brought in tins. While taking samples or during journey moisture could get in and therefore water content in the substance thus got explained. We had held that imported goods is not a chemical, not a drug intermediate and not a chemical compound. None of the analyst found any impurities in the samples. Therefore, the imported goods could be made use of in the preparation of medicines. As has been stated earlier, neither piperazine anhydrous nor hexahydrate is directly administered as medicine. They are used for the manufacture of medicines. Just because the imported goods has certain percentage of water it does not cease to be anhydrous. Because water is not chemically bonded and it does not in any way affects the physical or chemical properties of the substance Piperazine anhydrous. Piperazine anhydrous was canalised and the import of which was banned for all excepting the canalising agency. We, therefore, uphold the confiscation ordered by the Addl. Collector not for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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