TaxTMI 
TaxTMI 
1995 (12) TMI 177
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....re hit by limitation of time of six months, under Section 28 of Customs Act, 1962 and hence, barred by limitation." 2.  Briefly stated the facts of the case are that the appellants imported four consignments declared as "Homeopathic Medicine (Single) Sugar of Milk 200 Mesh HMS"; that in their invoices bills of entry they claimed clearance thereof under Chapter Heading 3004.90 read with Notification No. 58/85-Cus., dated 17-3-1985. The goods were assessed as declared by the appellants. Subsequently, it was noticed that sugar of milk was nothing but lactose, assessable under Customs Tariff Heading 1702.10. Accordingly, a less charge demand was issued to the appellants under Section 28 of the Customs Act, 1962 in respect of four bills of entry. It was argued by the appellants before the lower authorities that the goods in question were homeopathic medicine classifiable under Tariff Heading 3004.90 and that the benefit of Notification No. 58/85-Cus. was available to them; that `Saccharin Lactis' is a homeopathic medicine having prophylactic/therapeutic uses and supported this contention by production of certificate from the Director, Homeopathic Pharmacopoeia Laboratory, Minist....
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....of milk. (iii) Extracts from Dictionary of Practical Materia Medica by Dr. J.H. Clarke M.D. (1962 Edition). (iv) Copy of Notification No. 28-10/45 H(1), dated 21- 12-1945 issued under Sections 6(2), 12 and 33 of the Drugs and Cosmetics Act, 1940 which defines the expression `Homoepathic Medicines'. (v) Copy of documents showing that each consignment of sugar of milk was sent by the Customs to the Assistant Drugs Controller (India) before clearance for opinion. (vi) That sugar of milk being a homeopathic medicine, cannot be imported, stocked or sold without a licence. (vii) That Appendix 6 (Item 38) of Import Policy 1988-91 clearly showed that sugar of milk is a homeopathic medicine. (viii) Test report of the Govt. of India, Homeopathic Pharmacopoeia Laboratory dated 25-7-1989 certified that the samples of sugar of milk drawn from the imported consignment in question satisfied the standards prescribed in Homoeopathic Pharmacopoeia of India. (ix) Copy of letter dated 13-12-1990 of the Director, Homoeopathic Pharmacopoeia Laboratory, Ministry of Health and Social Welfare, Govt. of India, certifying that the sugar of milk is an of....
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....ment as provided in Heading 30.04; that findings of the Collector (Appeals) in paragraph 27 that for the application of Note 1(c) to Chapter 17, the product has not only to be a medicament but a medicament of Chapter 30; that once the product is a medicament it goes out of Chapter 17; that the goods imported by them fall under Heading 30.04 on the basis of the terms of heading. Moreover, the General Interpretative Rule 4 will clearly show that the product falls under Chapter 30; that the Assistant Collector while passing his order-in-original incorrectly applied HSN Notes which were very general and were illustrative and not exhaustive; that the appellants had raised the point that the definition of medicament in Chapter 30 of the Central Excise Tariff is different from the Customs Tariff; that insofar as the levy of additional duty is concerned, the question of indications on the packing or the question whether the goods are sold in retail to other users [is] entirely irrelevant; that while observing on the question of packing, the Id. Collector (Appeals) has not taken into consideration the method of dispensing of Homoeopathic medicine; that a homoeopathic does not treat a diseas....
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....ion as bulk drugs as defined in Notification. No. 234/86-C.E., it will therefore, not be proper for the Customs Authorities to find fault in the certificate issued by the Drugs Controller of the Govt. of India. The learned Counsel, therefore, prayed that the impugned order may be set aside and the appeal may be allowed. 8. Shri Vijay Singh the learned SDR appearing for the respondents submitted that the appellants had declared the goods on the basis of invoices and the bills of entry as homoeopathic medicine (single) sugar of milk; that though the goods were allowed clearance as claimed by the appellants, however, when it was noticed that sugar of milk was nothing but lactose, the Department had rightly held that the imported goods shall be classifiable under CTH 1702.10; that sugar of milk and lactose are the two synonymous names; that on page 131 of HSN under Chapter Heading 17.02 both are chemically pure lactose (also known as milk of sugar with chemical formula C12 H22O11; that it has been stated that lactose is used extensively in the preparation of infant foods, in confectionary and in jam-making or in pharmacy; that the Condensed Chemical Dictionary shows that lactos....
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....; caramel. 30.04 -   Medicaments (excluding goods of heading Nos. 30.02, 30.05 or 30.06) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale. We have also to go through the Chapter Notes 1(b) and 1(c) as these chapter notes were quoted in support of their contentions by the two parties. The Chapter Note 1(b) of Chapter 17 reads : "Chemically pure sugars [other than sucrose, lactose, maltose, glucose and fructose and aqueous solutions thereof (Heading 29.40)]" are not covered by this chapter. The Department was of the view that Chapter Note 1(b) clearly indicated that the lactose was covered under Chapter 17 whereas the appellants pressed Chapter Note 1(c) in support of their contention that they imported homoeopathic medicine and therefore, it went out of Chapter 17. The Chapter Note 1(c) reads : "Medicaments or other products of Chapter 30" are not covered under Chapter 17. The Department also referred to page 131 of the HSN Notes and submitted that Explanatory Note (1) provided that "Lactose (known as milk of sugar) (C12 H22 O11) which occ....
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....ose was included in Chapter 17 or not, the Department referred to Chapter Note 1(b) and emphasised that lactose was covered under Chapter 17 whereas the appellants forcefully submitted that lactose imported by them was of different grade used only in homoeopathic medicines and this grade of lactose was not of edible grade. Therefore, under Chapter [Note] 1(c), the product is excluded from classification under Chapter 17. In support of their contention whether the product was of special grade so as to merit classification as medicament under CTH 3004.90, the appellants referred to the certificates given by the Director of Homoeopathic Pharmacopoeia Laboratory, Ministry of Health and Family Welfare, Govt. of India: On a scrutiny of this certificate, we find that this certificate is in the form of bald statement which does not find support from any technical literature. Examining the contention in this light certificate loses much of its importance. The ld. Counsel also referred to the Homoeopathic Pharmacopoeia of India wherein the sugar of milk (lactose) has been described under succaharum lactis. We find that in the Explanatory Notes, lactose has been indicated to be used in the ph....
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....apter does not cover chemically pure sugar (other than sucrose, lactose, maltose, glucose and fructose) or other products of heading No. 29.40." From this specific inclusion, we find that this Chapter note is very specific for lactose and lactose shall be covered under Chapter 17. Chapter Note 1(c) of Chapter 17 of CTA, 1975 which was pressed by the appellants only in general terms says that medicament or other products of Chapter 30 will not be covered by Chapter 17. The question here is two fold - one is whether the item lactose is a specific item and was includible in Chapter 17 in terms of Chapter Note 1(b) or the imported product is a general term falling under medicament and to be excluded from Chapter 17. We observe that the admitted position is that the imported goods are lactose. It was argued by the learned counsel that on the strength of the certificate given by the Director of Homoeopathic Pharmacopoeia Laboratory, it should be accepted as medicaments classifiable under Chapter 3004.90 in terms of the case-law cited and relied upon by the appellants. We observe that in that case, the facts were different inasmuch as the Notification under which acceptance of the Drug Co....
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.... to users without repacking for the above purposes. The learned Counsel first attacked the above requirement of HSN Explanatory Notes on the ground that homoeopathic medicine does not treat diseases instead it treats individuals and their symptoms. He therefore argued that it is not possible to give on the packing any indications regarding the statement of disease, method of use or application, suitability etc.; that the method of dispensing of homoeopathic medicine has to be taken into consideration; that the admitted position was that on the packings, the words 'homoeopathic medicine, sugar of milk BP/IP' were inscribed, as against this the Department contested that medicines always have detailed directions on the labels pasted or the packages as to method of use, or application, suitability etc. and indicated that at least, they are to be administered under the direction of a Doctor; that this type of directions were not there in the imported goods and therefore, they cannot be said to fulfil the requirement of HSN Explanatory Notes at page 438. On careful consideration of the different submissions made by both sides, we find that HSN Notes have persuasive value. Wherever there ....
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.... tariff where the classification was not as per Section notes or Chapter notes and hence these rulings are not relevant in this case. Further as pointed out by the learned CDR, the question in Rakesh Enterprises pertained to a different notification which granted benefit to drugs, medicines and drug intermediate not elsewhere specified. The notification in the present case clearly laid down that it has to be classified under Chapter 28, 29 or 30 to the Schedule of the Central Excise Tariff Act, 1985. The case of Tata Exports Ltd. (supra) is also on identical issue and the Bombay High Court had held that the Dextrose Anhydrous is a drug intermediate. The terms of the Notification No. 104/82-C.E., dated 28-2-1982 in that case were different than the one in hand. Likewise the case of Atul Products is also clearly distinguishable as the item in question was Naphthalene and the same is not applicable to the facts of the case. In view of our findings, there is no merit in the appeals and the same are dismissed. Though this question was decided in terms of CETA, 1985, however, we find that it was equally applicable to import of the item under Chapter 17. No doubt, the sub-heading fo....