9911796707
TMI Blog2025 (2) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... te USP [for short hereinafter referred to as "Lactulose"] covered therein. 3. The Petitioner imports Lactulose Solution USP/Lactulose Concentrate USP covered under Chapter 29 of the First Schedule to the Customs Tariffs Act, 1975. 4. Prior to the enactment of the Central Goods and Services Tax Act, 2017 ("CGST Act, 2017), the Lactulose imported by the Petitioner was eligible for partial exemption from customs duty in excess of 5% under Sr. No. 147 (A) of the Notification No. 12/2012-CUS dated 17th March 2012 (for short the "2012 Notification") and additional customs duty in terms of Sr. No. 108 (A) of Notification No. 12/2012 dated 17th March 2012. This was prior to the GST regime. With effect from 1st July 2017 (i.e. after the GST regime came into force), according to the Petitioner, the Lactulose imported by the Petitioner is eligible for partial exemption from customs duty in excess of 5% under Sr. No. 166 (A) of Notification No. 50/2017-customs, dated 30th June 2017 ("2017 Notification"), and eligible for making payment at 5% of IGST in terms of Sr. No. 180 of Schedule I of the Notification No. 1/2017-IGST dated 28th June 2017. The subject matter of the present Petition is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls of Entry on 20th August 2019 and allowed the partial benefit under Sr. No. 166 (A) of the 2017 Notification. What is important to note is that no further action was taken by the Customs Department in this regard and the said reassessments have become final. In fact, since the Petitioner had paid excess duty, the Petitioner had filed a Refund Application, which was also ultimately granted by the Assistant Commissioner of Customs (NS-III) by his order dated 7th August 2022. 9. Thereafter, the Petitioner, on 17th October 2024, filed another Bill of Entry No.6182247 seeking clearance of 100 MT of Lactulose imported by the Petitioner. The Proper Officer thereafter raised a query and upon the Petitioner filing a reply, the Proper Officer permitted clearance of the said Lactulose covered under the said Bill of Entry dated 17th October 2024. 10. It now transpires that once again when the Petitioner imported Lactulose through three Bills of Entry filed dated 5th December 2024, the same have not been cleared. The ground on which they have not been cleared is once again that they are "Bulk Drugs" and therefore do not qualify for partial exemption under Sr. No. 166 (A) of the 2017 Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department, the Drugs that are listed in List 3 of the 2017 Notification are basically finished products and not "Bulk Drugs" used for making finished products. According to the Department, since what is imported by the Petitioner are Bulk Drugs, the Petitioner cannot claim partial exemption under Sr. No. 166 (A) of the 2017 Notification but under Sr. No. 166 (B) of the very same Notification. It is because of this mis-classification that the Lactulose has not been cleared, and the Department is in the process of issuing a Show Cause Notice to the Petitioner. She, therefore, submitted that the above Writ Petition holds no merit and the same ought to be dismissed. 17. We have heard the learned counsel for the parties, and we have also perused the papers and proceedings in the above Writ Petition. Initially, the Customs Department had issued the 2012 Notification specifying effective rates of basic and additional duty for specified goods falling under Chapters 1 to 98 of the Customs Tariffs Act, 1975. The relevant portion of the Table of 2012 Notification reads thus:- S.No. Chapter or Heading or Sub-heading or tariff Item Description of goods Standard rate Additional duty rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. 21. As mentioned earlier, it is the case of the Department that since the Lactulose imported by the Petitioner are Bulk Drugs, they cannot be classified under Sr. No. 166 (A) but under Sr. No. 166 (B) of the 2017 Notification. It is for this reason that the said Lactulose has not yet been cleared. When one examines Sr. No. 166 of the 2017 Notification, we find that the standard rate of duty is the same whether the Lactulose [imported by the Petitioner] falls within Sr. No. 166 (A) or under Sr. No. 166 (B). The only difference between the two is that if they fall within Sr. No. 166 (B), the Petitioner has to comply with the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. If those Rules are not complied with, the Petitioner would be liable for action. 22. In these circumstances, we are of the view that at this stage, and keeping all issues open, the Lactulose imported by the Petitioner can be released by allowing them the partial exemption as contemplated under Sr. No. 166 (A) of the 2017 Notification subject to them furnishing a bond to the Customs De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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