Judgment
As delivered
CASE NO.:Appeal (civil) 1076-1080 of 2002
PETITIONER:M/s. Span Diagnostics Ltd
RESPONDENT:Commissioner of Central Excise, Surat
DATE OF JUDGMENT: 30/04/2007
BENCH:S.H. KAPADIA & B. SUDERSHAN REDDY
JUDGMENT:
J U D G M E N T
WITHCivil Appeal No.5322 of 2002M/s. J. Mitra & Co. Ltd. AppellantVersusCommissioner of Central Excise, Delhi RespondentANDCivil Appeal Nos.1953-54 of 2003Commissioner of Central Excise, New Delhi AppellantVersusM/s. J. Mitra & Co. Ltd. & another Respondents
Kapadia, J.
From the impugned judgment dated 1.1.2002delivered by the Customs, Excise and Gold (Control)Appellate Tribunal ('CEGAT', for short), New Delhi, videAppeal No.E/1644 and 1645 of 2000-C, C.A. No.5322 of2002 and C.A. No.1953-54 of 2003 have been filed bythe assessees and by the Department respectively. Forthe sake of convenience and clarity we proceed to decideeach of the following civil appeals serially.
C.A.No.5322/2002filed by M/s. J. Mitra & Co.Ltd. (Assessee)In this civil appeal we are concerned with theclassification of biotech products.
The said assessee was engaged in the manufactureof blood-grouping reagents and diagnostic and laboratoryreagents. It had obtained registration on 10.9.99 for themanufacture and clearances of the following products:
(1) Anti-A Mono Clonal(2) Anti-B Mono Clonal(3) Anti-Decoders Mono Clonal(4) Anti-Decoders Mono Clonal(5) Anti-Decoders 1gM Mono Clonal(6) Anti-Decoders 1gG Mono ClonalThe above six items are called MonoclonalAntibodies (for short, 'MABs'). They were classified by theassessee under Chapter Sub-heading 3002.00 (ChapterHeading 30.02) of Central Excise Tariff Act (for short,'CETA') whereas the Department classified the MABsunder CSH 3005.90 (Chapter Heading 30.05) of CETA.
The assessee classified MABs as "cultures of micro-organisms" whereas the Department classified the saidMABs as "pharmaceutical products, not elsewherespecified or included".
The CEGAT (Tribunal), vide the impugnedjudgment, upheld the classification of MABs under CSH3005.90 of CETA as claimed by the Department, hencethis civil appeal is filed by the assessee.
For the sake of convenience, we quote hereinbelowChapter Note 3 in Chapter 30 of the CETA concerningpharmaceutical products which reads as under:
"CHAPTER 30PHARMACEUTICAL PRODUCTSNotes :
1. and 2. xxx xxx xxx
3. Heading No.30.05 applies only to thefollowing, which are to be classifiedin that heading and in no otherheading of this Schedule:-
(a) to (d) xxx xxx xxx
(e) Blood grouping reagents;
(f) to (h) xxx xxx xxx"
We quote hereinbelow Chapter Heading 30.02 andCSH 3002.00 of CETA which read as under:"CHAPTER 30PHARMACEUTICAL PRODUCTSNotes : 1. to 5. xxx xxx xxxHeadingNo.Sub-headingNo.Description of goodsRate ofduty(1)(2)(3)(4)30.023002.00Antisera and other bloodfractions; Vaccines, Toxins,Cultures of micro-organisms(including ferments butexcluding yeasts) and similarproductsNil
We quote hereinbelow Chapter Heading 30.05 inentirety of CETA which reads as under:"CHAPTER 30PHARMACEUTICAL PRODUCTSNotes : 1. to 5. xxx xxx xxxHeadingNo.Sub-headingNo.Description of goodsRate ofduty(1)(2)(3)(4)30.05
Pharmaceutical goods, notelsewhere specified
3005.10Chemical contraceptivesNil
3005.20Dental cements and other dentalfillings15%
3005.90Others15%
We also quote hereinbelow relevant extracts ofChapter Note No.2 in Chapter 30 of HSN (Second Edition)which read as follows:
"CHAPTER 30
PHARMACEUTICAL PRODUCTSChapter Notes.
1. xxx xxx xxx
2. For the purposes of heading No.30.02,the expression "modified immunologicalproducts" applies only to monoclonalantibodies (MABs), antibody fragments,antibody conjugates and antibodyfragment conjugates."
We also quote hereinbelow Chapter Heading 30.02in entirety from the said HSN which reads as under:
"30.02 HUMAN BLOOD; ANIMAL BLOODPREPARED FOR THERAPEUTIC, PROPHYLACTICOR DIAGNOSTIC USES; ANTISERA AND OTHERBLOOD FRCTIONS AND MODIFIED IMUNOLOGICALPRODUCTS, WHETHER OR NOT OBTAINED BYMEANS OF BIOTECHNOLOGICAL PROCESSES;VACCINES, TOXINS, CULTURES OF MICRO-ORGANISMS (EXCLUDING YEASTS) AND SIMILARPRODUCTS.
3002.10 Antisera and other blood fractionsand modified immunologicalproducts, whether or not obtained bymeans of biotechnological processes
3002.20 Vaccines for human medicine
3002.30 Vaccines for veterinary medicine
3002.90 Other
This heading covers:
(A) Human blood (e.g., human blood in sealedampoules).
(B) Animal blood prepared for therapeutic,prophylactic or diagnostic uses
Animal blood not prepared for such uses falls in heading05.11.
(C) Antisera and other blood fractions and modifiedimmunological products.
These products include:
(1) Antisera and other blood fractions.
Sera are the fluid fractions separated fromblood after clotting.
The heading covers, inter alia, thefollowing products derived from blood:
"normal" sera, human normalimmunoglobulin, plasma, fibrinogen,fibrin, blood globulins, serum globulinsand haemoglobin. The heading alsoincludes blood albumin (e.g., humanalbumin obtained by fractionating theplasma of whole human blood), preparedfor therapeutic or prophylactic uses.
Antisera are obtained from the blood ofhumans or of animals which are immuneor have been immunized against diseasesor ailments, whether these are caused bypathogenic bacteria and viruses, toxins orallergic phenomena, etc. Antisera areused against diphtheria, dysentery,gangrene, meningitis, pneumonia,tetanus, staphylococcal or streptococcalinfections, snake bite, vegetable poisoning,allergic diseases, etc. Antisera are alsoused for diagnostic purposes, including invitro tests. Specific immunoglobulins arepurified preparations of antisera.
The heading does not cover blood albumin notprepared for therapeutic or prophylactic uses(heading 35.02) or globulins (other than bloodglobulins and serum globulins) (heading 35.04).The heading also excludes medicaments which arenot separated from the blood but which in somecountries are described as "sera" or "artificial sera";they include isotonic solutions based on sodiumchloride or other chemicals and suspensions ofpollen which are used against allergic diseases.
(2) Modified immunological products,whether or not obtained by means ofbiotechnological processes.
Products whose antigen-antibody reactioncorresponds to natural antisera and whichare used for diagnostic or therapeuticpurposes and for immunological tests areto be regarded as falling within thisproduct group. They can be defined asfollows:
(a) Monoclonal antibodies (MABs) specific immunoglobulins fromselected and cloned hybridoma cellscultured in a culture medium orascites.
(b) Antibody fragments parts of anantibody protein obtained by means ofspecific enzymatic splitting.
(c) Antibody and antibody fragmentconjugates - enzymes (e.g., alkalinephosphatase, peroxidase orbetagalactosidase) or dyes (fluorescin)covalently bound to the proteinstructure are used for straightforwarddetection reactions.
(D) Vaccines, toxins, cultures of micro-organisms(excluding yeasts) and similar products.
These products include:
(1) Vaccines preparations of microbialorigin containing either viruses or bacteriasuspended in saline solutions, oil (lipovaccines)or other media. These preparations haveusually been treated to reduce their toxicitywithout destroying their immunising properties.
The heading also covers mixtures (such asDiphtheria, Tetanus and Pertussis (DPT)vaccine) consisting of vaccines and toxoids.
(2) Toxins (poisons secreted by bacteria),toxoids, crypto-toxins and anti-toxins, ofmicrobial origin.
(3) Cultures of micro-organisms (excludingyeasts). These include ferments such aslactic ferments used in the preparations ofmilk derivatives (kephir, yogurt, lacticacid) and acetic ferments for makingvinegar; moulds for the manufacture ofpenicillin and other antibiotics; andcultures of micro-organisms for technicalpurposes (e.g., for aiding plant growth).
Milk or whey containing small quantities of lacticferments is classifiable in Chapter 4.
(4) Virus, human, animal and vegetable andanti-virus.
(5) Bacteriophage.
The heading also includes diagnosticreagents of microbial origin, other thanthose provided for in Note 4 (d) to thisChapter see heading 30.06. It does notcover enzymes (rennet, amylase, etc.) evenif of microbial origin (streptokinase,streptodornase, etc.) (heading 35.07) nordead single-cell micro-organisms (otherthan vaccines) (heading 21.02).
The products of this heading remain classifiedhere whether or not in measured doses or put up forretail sale and whether in bulk or in small packings."
We also quote hereinbelow Chapter Heading 30.06of HSN which is equal to Chapter Heading 30.05 in CETAand which reads as under:
"30.06 PHARMACEUTICAL GOODS SPECIFIEDIN NOTE 4 TO THIS CHAPTER.
3006.10Sterile surgical catgut, similar sterile suture materialsand sterile tissue adhesives for surgical wound closure;sterile laminaria and sterile laminaria tents; sterileabsorbable surgical or dental haemostatics3006.20Blood-grouping reagents3006.30Opacifying preparations for X-ray examinations;diagnostic reagents designed to be administered to thepatient3006.40Dental cements and other dental fillings; bonereconstruction cements3006.50First-aid boxes and kits3006.60Chemical contraceptive preparations based onhormones or spermicides
This heading covers only the following goods:
(1) Sterile surgical catgut, similar sterile suturematerials and sterile tissue adhesives forsurgical wound closure.
This item covers all kinds of ligatures forsurgical sutures, provided they aresterile. These ligatures are usually putup in antiseptic solutions or in sealedsterile containers.
The materials used for such ligaturesinclude:
(a) catgut (processed collagen from theintestines of cattle, sheep or otheranimals);
(b) natural fibres (cotton, silk, linen);
(c) synthetic polymer fibres, such aspolyamides (nylons), polyesters;
(d) metals (stainless steel, tantalum,silver, bronze).
The item also covers tissue adhesivessuch as those consisting of butylcyanoacrylate and a dye; afterapplication, the monomer polymerisesand the product is therefore used in placeof conventional suture materials forclosing internal for closing internal orexternal wounds of the human body.
The heading excludes non-sterile suture materials. Theseare classified according to their nature e.g. catgut(heading 42.06), silkworm put, textile yarns, etc. (SectionXI), metal were (Chapter 71or Section XV).
(2) Sterile laminaria and sterile laminariatents.
This item is restricted to sterile laminariaand sterile laminaria tents (smalllengths of algae, sometimes brown andwith a rough grooved surface). They swellconsiderably on contact with moistsubstances and become smooth andflexible.
They are therefore used in surgery as ameans of dilation.
Non-sterile products are excluded (heading 12.12)
(3) Sterile absorbable surgical or dentalhaemostatics.
This item covers sterile products used insurgery or dentistry to stop bleeding andhaving the property of being absorbed bythe body fluids. It includes oxidizedcellulose, generally in the form of gauze offibres ("wool"), in pads, pledgets or strip,gelatin sponge or foam; calcium alginategauze, "wool" or "film".
(4) Blood-grouping reagents.
The reagents under this heading must besuitable for direct use in blood-grouping.They are either sera of human or animalorigin, or vegetable extracts of seeds orother parts of plants (phytagglutinins).These reagents are used in thedetermination of blood-groups byreference to the characteristics of theblood corpuscles or of the blood serum.In addition to the active principle(s), theymay contain substances to strengthentheir activity or stabilize them(antiseptics, antibiotics, etc.).
A. The following are to be regarded asreagents for determining blood-groupby reference to the characteristics ofblood corpuscles:
(i) Preparations for determining the A,B, O and AB groups. A1 and A2 sub-
groups and Factor H.
(ii) Preparations for determining the M,N, S and P groups and other groupssuch as Lu, K and Le.
(iii) Preparations for determining the Rhgroups and C, F, V, etc. sub-groups.
(iv) Preparations for determining theblood-groups of animals.
B. The preparations to be regarded asreagents for determining thecharacteristics of sera are thoseused to determine:
(i) characteristics of Gm, Km, etc.,systems;
(ii) serum groups Gc, Ag, etc.
C. Anti-human globulin serum (Coombsserum), which is essential in certainblood-grouping techniques, is also tobe regarded as a reagent of thisheading."
D. xxx xxx xxx
5. to 8. xxx xxx xxx"
According to the assessee, MAB is produced byhybridoma technology in which hybrids (fused cells) areallowed to grow by multiplication in culture medium andin that process they secrete the antibodies. According tothe assessee, these hybrids (fused cells) are micro-
organisms and as they grow in culture medium,therefore, they are classifiable under CSH 3002.00 as"cultures of micro-organisms". In this connection,reliance is place on "Compendium of Transfusion ofMedicine" by Dr. R. N. Makroo. In his book Dr. R.N.Makroo has stated that with advancement inbiotechnology, hybridoma technology has made availablea new source of reagents; that before the introduction ofhybridoma technology, the A.B.O grouping reagents werederived from human donors with or withoutimmunization. According to Dr. Makroo, the mainreagent used in blood-bank laboratory is antisera (whichis an antibody). Essentially MAB, according to Dr.Makroo, is obtained from cell culture. It helps in blood-grouping. The development of MAB obtained from cellculture secreting antibodies called hybridoma, has madeavailable a new source of blood-grouping reagents.According to the assessee, Chapter Heading 30.05 ofCETA is the same as Chapter Heading 30.06 of HSN.Under Chapter Heading 30.06, there is an ExplanatoryNote in HSN which states that "blood-grouping reagents"
(which term also finds place in Chapter Note '3' toChapter 30 of CETA) are either the sera of human oranimal origin, or vegetable extracts of seeds or otherparts of plants and, therefore, such reagents fall underChapter Heading 30.05 of CETA. However, according tothe assessee, MAB is not the sera of human or animalorigin or vegetable extracts or plant extracts and,therefore, it cannot fall under Chapter Heading 30.05 ofCETA and consequently it has to fall under ChapterHeading 30.02 of CETA. According to the assessee, onlypolyclonal antibodies are covered under Chapter Heading30.05 whereas MABs are covered under Chapter Heading30.02 as "culture of micro-organism".
According to the Department, on the other hand,MAB is a "blood-grouping reagent" which is used inhospitals for blood-grouping. These reagents, accordingto the Department, are used in the determination ofblood-groups by reference to the characteristics of bloodcorpuscles of blood-serum and, therefore, the said MABfalls under Chapter Heading 30.05. According to theDepartment, the said MAB has no therapeutic orprophylactic value; that they are merely blood-groupingreagents and, therefore, they fall in Chapter Note '3'which states that all "blood-grouping reagents" fall underChapter Heading 30.05. On behalf of the Department, itis further argued that on account of Note 3(e) to Chapter30 of CETA, MAB can only be classified under ChapterHeading 30.05 of CETA. According to the Department,even in common parlance MAB is known as "blood-grouping reagent" and, therefore, it falls under ChapterHeading 30.05 of CETA. On behalf of the Department, itis argued that in the present case we should not go byHSN. According to the Department, HSN deals withhuman blood, animal blood prepared for diagnostic uses;antisera and other blood fractions and ModifiedImmunological Products (for short, 'MIP'), whether or notobtained by means of biotechnological process; vaccine,toxin, cultures of micro-organisms and similar productswhereas Chapter Heading 30.02 of CETA does not dealwith items like human blood and MIP which items aredealt with by HSN and, therefore, according to theDepartment, in the present case, one should not relyupon the Explanatory Note to HSN.
We find merit in the arguments advanced on behalfof the assessee. There is no dispute that MAB is a blood-grouping reagent. The question is : whether merelybecause MAB is a blood-grouping reagent, should it beclassified under Chapter Heading 30.05 on account ofNote No.3(e) to Chapter 30 of CETA, even though MAB isa "culture of micro-organism" falling under CSH 3002.00(Chapter Heading 30.02). It is well-settled that the widthof the Heading under CETA cannot be expanded byreading Note 3(e) to Chapter 30. In our view, MAB is a"culture of micro-organism". It falls specifically underChapter Heading 30.02 of CETA. MAB is not a sera ofhuman or animal origin, it is not a vegetable extract, it isnot a plant extract and on the other hand it is obtainedby hybridoma technology (cellular fusion). Therefore, itcannot fall under Chapter Heading 30.05 of CETA.Moreover, Chapter Heading 30.05 is residuary. Thewidth of Chapter Heading 30.05 is restricted to productswhich are mentioned in Note 3(e) to Chapter 30. In otherwords, not all those pharma products which could not beclassified elsewhere in the tariff would fall under ChapterHeading 30.05, but only those which are specified in NoteNo.3 would fall under Chapter Heading 30.05. In thepresent case, MAB specifically falls in Chapter Heading30.02 as culture of micro-organism. If an item like MABis specifically falling in Chapter Heading 30.02, it cannotbe classified under Chapter Heading 30.05 merely onaccount of Chapter Note '3'. In the present case, theDepartment seeks to expand the scope of ChapterHeading 30.05, which is residuary, by relying upon Note'3' even when MAB falls under Chapter Heading 30.02 as"culture of micro-organism". In the present case MAB isnot polyclonal, it is monoclonal and, therefore, it isknown as MAB. In the case of Inter Care Ltd. v.Collector of Customs, New Delhi 1997 (89) ELT 545(Tribunal) it has been held that polyclonal product wouldfall under Chapter Heading 30.05. However, in thepresent case, MAB is not polyclonal, it is monoclonal andit is obtained by culture of micro-organism and,therefore, it would fall under Chapter Heading 30.02(CSH 3002.00). Our view is also supported by theExplanatory Note in HSN to Chapter Heading 30.02which refers to MIP. The said Note conclusively provesthat MAB is a "culture of micro-organism" and, therefore,it would fall under Chapter Heading 30.02. Lastly, eventhe HSN Explanatory Note to Chapter Heading 30.06corresponding to Chapter Heading 30.05 of CETA, showsthat MAB is excluded from Chapter Heading 30.05. ThatHeading states that blood-grouping reagents, suitable inblood-grouping, are sera either of human or animal originor vegetables' extracts or plants' extracts. In otherwords, MAB which is not the sera of either human oranimal origin or vegetable or plant extracts, cannot fallunder Chapter Heading 30.05, particularly, when MAB isa culture of micro-organism. There is one more aspectwhich needs to be highlighted. In the HSN, we haveChapter Heading 30.02 which refers to human blood;animal blood; "antisera and other blood fractions andMIP"; therefore, human blood is one item, animal blood isanother item whereas "antisera, blood fraction and MIP"
is the third item. Therefore, the third item forms oneseparate class. In that class we have MIP which includesMAB. Therefore, if one reads the third item as a separateclass as "antisera and blood fractions" then abridgementof HSN entries by CETA cannot rule out MIP whichincludes MAB. Therefore, when HSN treats antisera,blood fractions and MIP including MAB as one class thenthere is no contradiction between Chapter Heading 30.02of CETA and Chapter Heading 30.02 of HSN. Therefore,taking any view of the matter, HSN cannot be ruled out.
For the above reasons, we find merit in the civilappeal filed by the assessee (Civil Appeal No.5322 of2002) and, accordingly, we classify the above six itemsunder Chapter Heading 30.02 of CETA.
Accordingly, the said civil appeal is answered infavour of the assessee and against the Department.
C.A.Nos.1953-1954/2003filed by the DepartmentThe short question which needs to be decided inthese civil appeals is : Whether Beta Visipreg, VisipregStrip, Pregnancy Test Card fall as "antisera" underChapter Heading 30.02 of CETA (according to theassessee) or whether it falls under Chapter Heading38.22 of CETA as "diagnostic or laboratory reagent" (ascontended by the Department).
The above three products were cleared by theassessee as Pregnancy Test Kits (PTK). According to theassessee the above three products are for the detection ofhCG hormones in urine, as a test for pregnancy. Thethree products are meant for in-vitro diagnostic use only.According to the assessee, Chapter Heading 30.02 coversantisera of all forms.
On the other hand, it was argued on behalf of theDepartment that although PTK was an antisera, theabove three products were classifiable as diagnostic orlaboratory reagents under Chapter Heading 38.22 as theywere used exclusively in laboratory for diagnosticpurposes. According to the Adjudicating Authority,Chapter Heading 30.02 applied only to crude antiseraand since the above three products were refined antisera,they did not fall under Chapter Heading 30.02.
At the outset, we quote hereinbelow ChapterHeading 38.22 (CSH 3822.00) which reads as under:
"CHAPTER 38MISCELLANEOUS CHEMICAL PRODUCTS
Notes:
1. to 3. xxx xxx xxx
HeadingNo.Sub-headingNo.Description of goodsRate ofduty(1)(2)(3)(4)38.223822.00Composite diagnostic orlaboratory reagents, other thanthose of Chapter 3020%
As stated above, Chapter Heading 30.02 refers toantisera and other blood fractions. According to theExplanatory Note in HSN (Seventh Edition), antisera isobtained from the blood of humans or animals which areimmune against diseases. Antisera is used for diagnosticpurposes, including in-vitro tests. There is nothing likecrude antisera and refined antisera. In the present case,even according to the Department, PTK is an antisera,however, according to the Department, PTK is a refinedantisera. As stated, antisera falls under Chapter Heading30.02. In the circumstances, "antisera" is covered byChapter Heading 30.02 and since it is covered by thatHeading, Chapter Heading 38.22 will not apply. If onereads Chapter Heading 38.22, it becomes clear that therecould be diagnostic or laboratory reagents which couldfall under Chapter Heading 30.02 and also underChapter Heading 38.22. However, if a diagnostic orlaboratory reagent like antisera falls under ChapterHeading 30.02 then it stands excluded from ChapterHeading 38.22.
Before concluding we may record the statementmade on behalf of M/s. J. Mitra & Co. Ltd. that they haveclosed down their business in producing the followingtwo items, namely, Syphilis RPR (VDRL) and SalmonellaAntigens. Hence, they do not seek to press theclassification issue concerning the said two items.
Hence we answer C.A. No.1953-54 of 2003, filed bythe Department, in favour of the assessee and againstthe Department.
For the above reasons, the assessee succeeds onItem Nos. 1 to 9, mentioned at page No.5 of the paperbook in C.A.Nos.1953-54/2003 and, therefore, theDepartment was not entitled to invoke the extendedperiod of limitation under Section 11A of the CentralExcise Act, 1944.
C.A.Nos.1076-1080/2002 filed by M/s. Span DiagnosticsLtd. (assessee)
These civil appeals are filed by M/s. SpanDiagnostics Ltd. (assessee) under Section 35(L) of theCentral Excise Act, 1944, against the decision of theCEGAT (for short, 'Tribunal') dated 4.12.2001.In these civil appeals we are concerned with ItemNos.21 to 32, referred to in Annexure A to the paper book(at pages 27-28), Item Nos.35, 36 and 37 in Annexure Ato the paper book (at pages 27-28) and Item Nos.1 to 15in Annexure B to the paper book (at page 29).
At the outset we quote hereinbelow Item Nos.21 to32 of Annexure A which read as under:
"ANNEXTURE- 'A'Name of the products which will fall under chapter sub-heading3005.90
--------------------------------------------------------
Sr. Code No. Item Pkg.No.
--------------------------------------------------------
21. 11127A Anti-A (Monoclonal) 5 ML
22. 11127B Anti-A (Monoclonal) 10 ML
23. 11127C Anti-A (Monoclonal) 3x5 ML
24. 11128A Anti-B (Monoclonal) 5 ML
25. 11128B Anti-B (Monoclonal) 10 ML
26. 11128C Anti-D (Monoclonal lgG+lgM) 3x5 ML
27. 11129A Anti-D (Monoclonal IgM) 5 ML
28. 11129B Anti-D (Monoclonal IgM) 10 ML
29. 11129C Anti-D (Monoclonal IgM) 3x5 ML
30. 11130A Anti-D (Monoclonal IgG + IgM) 5 ML
31. 11130C Anti-D (Monoclonal IgG + IgM) 3x5 ML
32. 11131A Anti-A, B & D (Mono. IgM) 3x5 ML
------------- ---------------------------------------
It is not in dispute that above Item Nos.21 to 32 areidentical to Item Nos.1 to 6 in C.A. No.5322 of 2002 -filed by M/s. J. Mitra and Co. (assessee).
In the circumstances, we hold for the above reasonsthat Item Nos.21 to 32 would fall under Chapter Heading30.02 of CETA. Accordingly, the assessee succeeds inthis regard.
As regards Item Nos.35, 36 and 37 of Annexure A isconcerned, we quote hereinbelow the exact description ofthe said three items which read as under:
"ANNEXTURE- 'A'Name of the products which will fall under chapter sub-heading3005.90
--------------------------------------------------------
Sr. Code No. Item Pkg.No.
--------------------------------------------------------
35. 18411 P.P.D. STU/0.1 ML 5 ML
36. 18411A P.P.D. 10TU/0.1 ML 5 ML
37. 18412A Tuberculin P.P.D.Lyophilized 10TU/0.1 ML 500 TU
------------- ----------------------------------------------------------------------- On this point we may state that the Adjudicating Authority had referred the matter for opinion to Dy. Chief Chemist who opined that the three items were "cultures of micro-organisms" and, therefore, they came under Chapter Heading 30.02 and not under Chapter Heading 30.05. Apart from the question as to whether the Dy. Chief Chemist was or was not entitled to classify, the fact remains that the question as to whether the above produces are "diagnostic reagents" was not referred.
In this case we are concerned with classification of diagnostic reagent for vivo detection of T.B. mycobacteria. According to the Adjudicating Authority, these reagents are of mycobacterium origin but they are injected intradermally into the patient and, therefore, they are classifiable under Chapter Heading 30.05 (CSH 3005.90). According to the Department, the above three items are put up by the assessee for sale in measured doses and, therefore, they were classifiable under Chapter Heading 30.05. In this connection, reliance is placed on Chapter Note 3(d) to Chapter 30 which reads as under:
"CHAPTER 30 PHARMACEUTICAL PRODUCTS Notes:
3. Heading No.30.05 applies only to the following, which are to be classified in that heading and in no other heading of this Schedule: -
(e) Opacifying preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, being unmixed products put up in measured doses or products consisting of two or more ingredients which have been mixed together for such uses;
On reading Chapter Note 3(d) it is clear that preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, put up in measured doses would fall under Chapter Heading 30.05. However, in this case there is no finding given by any of the Authorities below as to whether Item Nos.35, 36 and 37, quoted above, are diagnostic reagents. This question has got to be decided as the assessee contends that the above three products are not diagnostic reagents, they are "diagnostic aid". In this connection, reliance is placed on Pharmacopoeia of India (Third Edition) by Ministry of Health and Family Welfare (GOI) and also on The National Medical Series for Independent Study (Microbiology - 2nd Edition) by Dr. David T. Kingsbury and Gerald E. Wagner.
Since this question has not been answered we remit the matter to the Adjudicating Authority to decide whether Item Nos.35, 36 and 37, quoted hereinabove, are diagnostic reagents or whether they are in aid of diagnosis.
Now, coming to Item Nos.1 to 15 of Annexure B, we quote hereinbelow the said items which read as under:
"ANNEXTURE - 'B' Name of the products which will fall under chapter sub-heading 3822
-----------------------------------------------------------
Sr. Code No. Item Pkg. No.
-----------------------------------------------------------
1. 17401A Anti Sheep Hemolysin 5 ML
2. 19404 Chem. Control (Assayed) 5x3 ML
3. 19404A Chem. Control (Unassayed) 5x3 ML
4. 17405 Fraund's Adjuvant (Com) 10 ML
5. 17406 Guinea pig (Complement) 5x1 ML
6. 19408 Kahn VDRL + Va control 5 ML
7. 19409 Kahn VDRL - Va control 5 ML
8. 19444 Chem. Control Assayed Normal 5x3 ML
9. 19444A Chem. Control Assayed Abnormal 5x3 ML
10. 25907 R.A. Test (Latax Test) 10 T
11. 25907A R.A. Test (Latax Test) 20 T
12. 25934 C.R.P. (Latax Test) 20 T
13. 25947 ASO (Latax Test) 20 T
14. 25946B Austragen (Latax Test) 25 T
15. 25946C Austragen (Latax Test) 50 T
-----------------------------------------------------
According to the assessee, the above 15 items fall under Chapter Heading 30.02 as they are "blood fractions". This is not disputed by the Department. However, according to the Department, since Item Nos.1 to 15 are manufactured by coating latex particles with protein, they fall under Chapter Heading 38.22 of CETA. However, according to the Tribunal, the said items fall under Chapter Heading 30.05 of CETA. At this stage we may note that according to the Department, the said 15 items came under Chapter Heading 38.22 whereas, according to the assessee, they came under Chapter Heading 30.02. The only question before the Tribunal was whether it came under Chapter Heading 38.22 or whether it came under Chapter Heading 30.02. In M/s. Mitra's case (which we have decided hereinabove vide C.A.No.5322 of 2002), we have taken the view that "blood fractions" fall under Chapter Heading 30.02. Chapter Heading 30.02 refers to "blood fractions". Merely because the medium used is latex (rubber) or paper, will not bring the items under Chapter Heading 38.22. Once an item is a "Blood Fraction" it falls under Chapter Heading 30.02. The medium is irrelevant. The medium could be paper or rubber. The configuration of the product and the function are important. In our opinion, Item Nos.1 to 15 are "Blood Fractions". They are "Blood Fractions" even according to the Department.
In the circumstances, we classify Item Nos.1 to 15 of Annexure B to the paper book under Chapter Heading 30.02 (CSH 3002.00).
Accordingly, except for Item Nos.35, 36 and 37 of Annexure A, the assessee M/s. Span Diagnostics Ltd. succeeds in C.A. Nos.1076-1080 of 2002. However, with regard to Item Nos.35, 36 and 37 of Annexure A, the matter shall stand remitted to the Adjudicating Authority for fresh decision in accordance with law. Consequently the question of limitation will remain open only with regard to Item Nos.35, 36 and 37 of Annexure A in C.A. Nos.1076-1080 of 2002.
Accordingly, the above C.A. No.5322 of 2002, C.A. Nos.1953-54 of 2003 and C.A. Nos.1076-1080 of 2002 stand disposed of with no order as to costs.
