TaxTMI 
TaxTMI 
2002 (11) TMI 132
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....fication No. 16/2000-Cus., dated 1-3-2000 (S.No. 202) is available to the Fermenter and whether the payment for the documents relating to design, engineering and site run is to be included in the assessable value of the fermenter. 2. Shri V. Lakshmi Kumaran, learned Advocate, submitted that the Appellants are, inter alia, engaged in the manufacture of life saving drugs including vaccines of Hepatitis "B"; that for the manufacture of said vaccine, they require fermenters and other ancillary equipments; that they imported a pilot fermenter (Biostat-C) and two commercial fermenters; that in addition they also imported from the supplier of the fermenter, documents capturing design, Engineering and site run of the fermenters and claimed class....
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....eatment of materials by heating etc., that in view of this categorical position from the HSN Explanatory Notes and the catalogue and the admission in the show cause notice, classification under sub heading 8419.89 is the correct classification. Alternatively he mentioned that if the impugned product is classified under sub-heading 8479.89, benefit of Notification No. 6/2000-Cus. is available; that serial No. 202 of the said Notification covers "machinery for production of commodities"; that since the fermenter produced vaccine, which is a commodity, exemption under the notification is available; that the reasoning of the Adjudicating Authority that the fermenter alone cannot be said to produce the vaccine is incorrect as the vaccine is prod....
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....that the fermenter would be sold at a price of D.M. 10.20 Lakhs without these tests and the manuals; that the said letter clearly establishes that the consideration for the manuals is not a condition for the sale of fermenter; that as such Rule 9(e) of the Customs Valuation Rules would not apply; that Interpretative Note to Rule 4 categorically provides that the value of the imported goods shall not include charges or costs for technical assistance undertaken after importation provided that the said costs are distinguished from the price actually paid or payable; that the cost for the manuals is distinguished separately from the price paid for the ferments; that if the manuals are to be treated as technical assistance for manufacture of vac....
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.... use fermenter for the manufacture of vaccine for Hepatitis 'B'. He, further, submitted that the impugned goods have certain parts which have heating element but that cannot be factors determining the classification of the products; that machine as a whole has to be considered for determining its classification in the Customs Tariff and not on the basis of only one part; that whole fermenter cannot be classified on the basis of a single part; that as such Heading 84.19 is completely ruled out. He also mentioned that manuals in question came along with machines as per contract, that the Price summary mentioned the price of Fermenters and Design Engineering and Site Run; that both the prices taken together constitute the contract; that Design....
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...." as given in Mc Graw Hill Dictionary of Scientific and Technical terms according to which fermentation is an enzymatic transformation of organic substances and is used in various industrial process by the action of yeasts, molds and bacteria. Fermenter, according to said Dictionary, is a vessel used for fermenting. We also observe that it is mentioned in Kirk-Othmer Encyclopedia of Chemical Technology that though the fermentation process is used in a number of products ranging from amino acids to enzymes, the technology used is somewhat standardized. According to the said Encyclopedia, "Although the word fermentation referred originally to the anaerobic metabolism of organic compounds by micro-organisms or their enzymes to produce products....
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....quired by the marketing authorization. GMP covers all aspects of the manufacturing process. It is thus apparent that these documents are essential for the appellants to manufacture vaccines as per the GMP requirements. In view of this, the value of these documents has been rightly added into the value of the fermenter. The letter of the foreign supplier does not advance the case of the Appellants as it merely mentions that fermenters are also sold without the manuals. But the facts remains that a manufacturer of vaccine for conforming to GMP requirements has to take manuals with machine from the supplier only. The letter makes it clear that tests and documents are not ordinarily performed made available and Installation Qualification and Op....