Exemption for drug intermediates applied to phenol USP where pharmacopoeial status and pharmaceutical use established its character.

Phenol USP was held to fall within an exemption for drugs, medicines, pharmaceuticals and drug intermediates under Notification No. 55/75 because it was shown to be included in recognised pharmacopoeias and to have use as a preservative and pharmaceutical raw material. The Court held that no further requirement of proving actual end-use could be read into the notification where the character of the goods already brought them within the exempted category. On that basis, phenol USP was treated as both a drug and a drug intermediate, and countervailing duty did not apply.

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Issues: Whether phenol USP was entitled to exemption under Notification No. 55/75 dated 1 March 1975 as a drug or drug intermediate, so as to escape countervailing duty.

Analysis: The imported product was found to be included in recognised pharmacopoeias and supported by material showing use as a preservative and as a raw material or intermediate in pharmaceutical manufacture. The exemption notification covered all drugs, medicines, pharmaceuticals and drug intermediates not elsewhere specified, and the Court held that no additional requirement could be read into the notification that the importer must prove actual end-use beyond the character of the goods. On the material placed, phenol USP was treated as both a drug and a drug intermediate.

Conclusion: The benefit of the exemption notification was available, and the import of phenol USP was not liable to countervailing duty.

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