TaxTMI 
TaxTMI 
1991 (2) TMI 411
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.... ingredient Povidone Iodine U.S.P. It is stated by them that the said item Povidone Iodine U.S.P. preparations are widely accepted by the medical profession, customers, chemists etc., all over the country. 2. They imported three consignments of Povidone Iodine U.S.P. from West Germany and filed the Bills of Entry for home consumption. It was assessed to duty under sub-heading 3904.40 and Customs duty was levied at the rate of 100% + 45% + 40% CVD. They preferred refund claim seeking reassessment of the goods under sub-heading 2931.00 with the benefit of the Notification No. 77/86 and the rate of duty applicable being 60% + 45% + 5% CVD. The same was rejected by Assistant Collector of Customs Refund by his Order-in-Original on the ground ....
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.... chain. Due to an appreciable excess of free pyrrolidone rings in povidone-iodine USP XIX, the product was readily soluble in water". Basing also on the definition of the chemical term compound as appearing in the Condensed Chemical Dictionary, by Gessner G. Hawley which is as follows :- "A substance composed of atoms or ions of two or more substances in chemical combination. The constituents are united by bonds (q.v.) or valence forces. A compound is a homogeneous entity in which the elements have definite proportions by weight, and are represented by a chemical formula (q.v.). A compound has characteristic properties quite different from those of its constituent elements; it can be decomposed by energy in the form of a Chemical reac....
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....ants have contended that Povidone Iodine has a definite structure and does not contain other substance deliberately added during or after its manufacture. 5. They have also relied on the United States Pharmacopoeia, and the Extra Pharmacopoeia by Martindale 29 Edition which at page No. 867 states :- "Pharmacopoeias in U.S. A complex of iodine with povidone, containing 9 to 12% of available iodine calculated on the dried basis. It occurs as a yellowish-brown amorphous powder with a slight characteristic odour. It loses not more than 8% of its weight on drying. Soluble in water and alcohol : practically insoluble in acetone, carbon tetrachloride, chloroform ether and light petroleum U.S.P. solutions have a pH of 1.5 to 6.5. The B.....
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....contend that Povidone Iodine USP is not a polymer falling under Chapter 39 of the first Schedule to CTA. It is also not a chemically modified polymer of Povidone. They contended that it is a drug as it is used for its therapeutic value and it is effective in the treatment of many diseases and hence its proper classification should be under Chapter 29. It cannot be considered as a synthetic polymer or as a halogenated olefine classifiable under Chapter 39. We have heard Shri K. Srinivasan, Consultant for the appellants and Shri S. Chakraborti, JDR for the Department. 7. Shri K. Srinivasan, learned Consultant relying on the materials placed before us submitted that the imported item had a definite chemical formula and that there was no dis....
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.... the appellants clearly indicated that the item was a polymer with Iodine. Being a polymer it is covered under Chapter 39 of the Tariff. He further submitted that Chapter Note 3(c) of Chapter 39 applied in this case. He, however, submitted that if the uses and nature of the product were to be taken into consideration then it should fall under Chapter 30 or 38 of Chapter 7. If it is sold as a medicament then it should fall under Chapter 30. 8. We have carefully considered the submissions made by both sides and gone through the literature produced before us. The question that arises for our consideration is the classification of the impugned goods Povidone Iodine and entitlement of benefit of Notification No. 77/86-Cus. 9. Polyvinylpyrr....
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....s inter alia "Pharmaceutical chemicals, that is, chemicals having prophylactic or therapeutic value and used solely or predominantly as drugs, not elsewhere specified", falling under Chapter 29, from basic customs duty in excess of 60% ad valorem. PVP, as noted earlier, does not fall under Chapter 29 and is not, therefore, eligible for the benefit of the concession. The fact that the technical literature on record shows that Povidone Iodine is used as a drug does not detract from this position. The Notification is not worded in such a wide manner as to admit of its benefit being extended to all pharmaceutical chemicals irrespective of their classification under the Tariff Schedule : it restricts the benefit to such chemicals as fall under C....