Absorbent cotton wool is not a drug merely because it meets surgical dressing standards and is sterile.

Absorbent cotton wool exported to BPC standard remained only absorbent cotton wool and did not become a drug or drug intermediary for drawback purposes. Conformity with a surgical dressing standard showed suitability for dressing use, but it did not confer therapeutic value or alter the product's essential character. Applying the principle from the cited Bombay High Court decision, an item used for minor wound dressing is not a drug merely because it is sterile or contains a sterilising element. The exported goods were therefore outside Serial No. 1205 of the drawback schedule and not entitled to the claimed drawback.

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Issues: Whether absorbent cotton wool exported as BPC standard was a drug or drug intermediary so as to qualify for drawback under Serial No. 1205 of the drawback schedule.

Analysis: The product was only absorbent cotton wool. Even if it conformed to BPC standard, that only meant it was suitable for surgical dressing. It did not acquire any therapeutic value merely because it was sterile or fit for dressing purposes. Following the principle applied in the cited Bombay High Court decision, an item used as a dressing for minor wounds is not a drug merely because it may contain a sterilising element.

Conclusion: The absorbent cotton wool exported by the appellants was not a drug or drug intermediary and was therefore not entitled to the drawback claimed.

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