Customs exemption for anti-cancer drug injection upheld, but tablets and bulk drug remain outside the claimed coverage.

Cyclophosphamide for injection was treated as covered by the chapter entry for anti-cancer drugs and medicines and, on that basis, qualified for nil duty exemption. Cyclophosphamide tablets and the bulk drug used to manufacture them were not treated the same way: the bulk drug remained classifiable under Chapter 29, and the later notification was treated as clarificatory only, not as a basis for retrospectively extending exemption to goods not expressly covered by the tariff entry. The exemption therefore applied only to the injection item, while the claim failed for the tablets and the bulk drug.

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Issues: (i) Whether Cyclophosphamide for injection fell within Chapter 99 and was entitled to nil duty exemption. (ii) Whether Cyclophosphamide tablets, or the bulk drug used for manufacture of tablets, was covered by Chapter 99 or by the later exemption notification.

Issue (i): Whether Cyclophosphamide for injection fell within Chapter 99 and was entitled to nil duty exemption.

Analysis: Chapter 99 covered anti-cancer drugs and medicines, and the schedule specifically mentioned Cyclophosphamide for injection. The later notification also indicated that the exemption related to life saving drugs and medicines falling within Chapter 99. On that basis, the item described as Cyclophosphamide for injection was treated as covered by the chapter heading and eligible for the benefit of nil duty.

Conclusion: Cyclophosphamide for injection was held eligible for exemption and the finding was in favour of the importer, not the Revenue.

Issue (ii): Whether Cyclophosphamide tablets, or the bulk drug used for manufacture of tablets, was covered by Chapter 99 or by the later exemption notification.

Analysis: The bulk drug continued to fall under Chapter 29 and was used only in the manufacture of life saving drugs and medicines. The later notification was treated as clarificatory only to the extent of identifying life saving drugs and medicines falling within Chapter 99 and did not operate retrospectively to extend exemption to the bulk drug or to articles not covered by the chapter entry. Cyclophosphamide tablets were not treated as covered in the same manner as the injection item for the purpose of the claimed exemption.

Conclusion: Cyclophosphamide tablets, and the bulk drug as such, were not entitled to the claimed exemption, and this issue was decided in favour of the Revenue.

Final Conclusion: The exemption was sustained only for the injection item, while the claim failed for the tablets and the bulk drug treatment, so the appeals were allowed only in part.

Ratio Decidendi: A clarificatory customs notification does not retrospectively extend exemption beyond the goods specifically covered by the relevant tariff entry, and a bulk drug remains outside a tariff entry meant for specified life saving drugs and medicines unless it is expressly included.

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