TaxTMI 
TaxTMI 
1984 (9) TMI 290
X X X X Extracts X X X X
X X X X Extracts X X X X
....as the residuary item under the First Schedule to the Indian Tariff Act, 1934 which was then in force. The rate of duty payable under Tariff Item No. 87 was 60 per cent. The Customs authorities, however, did not accept this classification. They classified `Plasdone' under Tariff Item 82(3) which deals with artificial or, synthetic resins. Under Tariff Item 82(3) the goods were assessable to customs duty at the rate of 100 per cent with countervailing duty at the rate of 36 per cent. The petitioners paid duty under Item 82(3) under protest. They submitted an application in March 1972 claiming a refund of Rs. 1,21,816.80 being the difference between the duty paid under Tariff Item 82(3) and the duty which would have been paid under Tariff Item 87, and countervailing duty. In their application the petitioners stated that Plasdone was a pharmaceutical grade material and it was used as an adjuvant in their pharmaceutical preparations. The 2nd respondent, namely, Asstt. Collector of Customs by his order dated 15th December, 1972 rejected the application of the petitioners. The petitioners preferred an appeal to the Appellate Collector of Customs. The petitioners' appeal was rejected by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r and it is put in the category of a pharmaceutic aid (tablet binder and coating agent ; viscosity-increasing agent). It is soluble in water, in alcohol and in chloroform ; and it is insoluble in ether. Similarly the National Formulary also describes Povidone as a synthetic polymer, pharmaceutical grade and it is put in the category of dispersing and suspending agent. The British Pharmaceutical Codex 1973 describes Povidone as the pharmaceutical grade of polyvinyl pyrrolidone. It states as follows : "POVIDONE SYNONYM : Polyvinyl pyrrolidone : Povidone is the pharmaceutical grade of polyvinyl-pyrrolidone. There are two types, one suitable for oral ingestion and typical application and the other for parenteral administration. The standard in this monograph applies only to the former type used as pharmaceutical adjuvant in oral preparations; additional requirements are necessary for the injectable material".    *          *         *          * "Uses. The type of povidone....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arbazole." Thus, polyvinyl pyrrolidone is expressly described here as a polyvinyl resin although it is soluble in water. 8. In the book "Water-Soluble Resins" edited by Davidson and Sittig, Chapter 6 deals with Polyvinylpyrrolidone. It is described as a relative newcomer among the commercial water-soluble polymers. The fact that PVP merits a chapter in a book on Water-Soluble resins shows that it is considered as a resin. It also shows that resins can be soluble in water. 9. The Condensed Chemical Dictionary, 10th Edition Revised by Hawley defines `resin, natural' and `resin, synthetic'. `Resin, synthetic' is defined as "A man-made high polymer (q.v.) resulting from a chemical reaction between two (or more) substances, usually with heat or a catalyst". This definition includes synthetic rubbers and silicones (elastomers), but excludes modified, water soluble polymers (often called resins). There is a note which says, "Because the term `resin' is so broadly used as to be almost meaningless, it would be desirable to restrict its application to natural organ-soluble, hydrocarbon-based products derived from trees and shrubs. But in view of the tendency of inappropria....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is not known in the trade as a `synthetic resin'. It is possible that this evidence was not produced by the petitioners because they have originally contended that this item should be classified in the residuary Entry 87. But the petitioners could have produced evidence or at least filed some affidavits to this effect in the present petition. That has not been done. From the material on record it is not possible to hold that PVP of pharmaceutical grade is known in the trade as a `drug' and not as a `synthetic resin'. 14. Moreover, the end-use of a product is irrelevant for the purpose of interpretation of a tariff entry. The Supreme Court in the case of Dunlop India Ltd. v. Union of India and others reported in A.I.R. 1977 S.C. 597 on p. 607 was required to consider whether V.P. Latex should be classified as "rubber raw" or as a "synthetic resin". The Court held that the end-use of an article is absolutely irrelevant for the purpose of its classification under a tariff entry where there is no reference to the end-use of the article in the entry itself. The article must be judged on the basis of its nature at the time of its importation. Its ultimate use is not relevant. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... But this definition cannot be read into Item 28 for the purpose of interpretation of the language used in Item 28. 16. Under the Drugs (Price Control) Order, 1979 issued under Section 3 of the Essential Commodities Act, 1955 "bulk drug" is defined in Section 2(a) as follows : `"bulk drug" means any substance including pharmaceutical, chemical, biological or plant product or medicinal gas conforming to pharmacopocial or other standards accepted under the Drugs and Cosmetics Act, 1940, (23 of 1940), which is used as such, or as an ingredient in any formulations.' Under the Second Schedule to this Order a list of bulk drugs is annexed. Under the heading "Plasma Expanders and Transfusion Solution" Item (2) is Polyvinyl Pyrrolidone. Since Polyvinyl Pyrrolidone of injectible grade is used as `plasma expander', this classification is of no assistance to the petitioners who have imported a non-injectible grade of polyvinyl Pyrrolidone. 17. In fact, it is not the case of the petitioners that every grade of Polyvinyl pyrrolidone can be classified as a `drug'. There are grades which are not pharmaceutical grades at all; and it is nobody's case that these grades can be c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the petitioners is not used for any medicinal qualities. It is used as a binding agent for tablets. It is not a material which causes any physiological interaction. In a book entitled "Water-Soluble Resins" edited by Robert L. Davidson and Marshall Sittig, at page 117 'Physiological Acceptability' of PVP has been described as follows : "A long clinical history has shown PVP to be an essentially physiologically inert material." In fact, it is precisely for this quality that it is used for pharmaceutical preparations because it is found to be non-toxic. At page 119 it is stated, "The adhesiveness and lack of toxicity of PVP have led to its use in pharmaceutical tablets as a granulating agent or for coating ; Plasdone grade PVP K-30 is sold by General Aniline for this purpose. The classical binders such as starch or gelatin are used in water systems. However, where the ingredients are unstable in water, alcohol-soluble PVP permits granulation". In my view, a material which is physiologically inert cannot be considered as a drug simply because it is an ingredient of a drug or medicine. 21. My attention was drawn to a decision in the case of Ramesh Chemical Industries v. U....