COMMISSIONER OF CUSTOMS Vs. M.B.I. CHEMICALS

JUDGEMENT

(1.) These Revenue appeals arise from a common Order -in -Appeal Nos. C.Cus. 965 to 967, dated 19 -8 -98 passed by the Commissioner (Appeals), Chennai holding that the imported item is crude iodine with 99.5 % content and 99.8% content and that they are not pure iodine. He has granted the benefit of Notification No. 23/94 (Sl. No. 3 of the Table) which extends the benefit to crude iodine. The Commissioner had earlier remanded the matter to the Asstt. Commissioner for reconsideration by Order -in -Appeal Nos. M.Cus. 1136 to 1138/96, dated 16 -7 -96. He had noted several points to distinguish the item "crude iodine" with "resublimed iodine" and had directed the authorities to reconsider the evidence produced by the importer to the effect that the imported item was crude iodine and not resublimed iodine and the crude iodine has a minimum percentage of iodine content to the extent of 99.5% to 99.8%. The crude iodine contains Sulphate to the maximum extent of 0.01%; Chloride and Bromide to the maximum extent of 0.003% and Iron to the maximum extent of 0.005%. It also tends to volatise into violet vapour at room temperature and its appearance is solid -laminated grayish black while resublimed iodine is in the form of small crystals with metallic lusture. These features had not been noted by the Custom House Laboratory and, therefore, the Commissioner (Appeals) directed the original authority to re -examine the issue afresh in the light of the technical evidence including the evidence culled out from the Encyclopaedia of Chemical Technology by Kirk Othmer, Volume 13, page 657, wherein it has been stated that crude iodine is packed in double polyethylene -lined fiber drums containing 45 -90 kgs., whereas resublimed iodine is shipped in 11.3 kg. lined fibre drums and in 0.11, 0.45, and 2.26 kg. bottles. The importers had imported 1000 Kgs. of crude iodine in bulk and in drums and, therefore, the mode of packing indicated that it was a crude iodine and not resublimed iodine. The Commissioner also noted in the remand order that all the documents i.e. shipping documents, invoices and packing list clearly indicated the item to be crude iodine and there was no contest raised by the Revenue with regard to the declaration of the item as crude iodine.

(2.) On de novo consideration, the original authority rejected the importer's plea that the item is 'crude iodine' solely on the report of Central Revenues Control Laboratory, New Delhi (CRCL) to treat the purity of iodine at 99.5% to 99.8% as "other than crude iodine". It was also noted that as per the Indian Pharmacopoeia, the iodine to be considered as "Standard" (Pharmacopical Grade) if it is not less than 99.5% and not more than 100.5%. Solely on the basis of the opinion of CRCL, New Delhi taken in the conference of Heads of the Customs and Central Excise Laboratories, the original authority decided that the item is not crude iodine. However, he has not examined the point on which it was remanded and, therefore, the Commissioner (Appeals) in the impugned order, after due consideration of all the pleas, held that the imported item is crude iodine and not resublimed iodine. The findings recorded by the Commissioner is noted herein below : -

(3.) Revenue has contested this finding on the ground that the technical opinion taken in the meeting of Heads of Central Excise and Customs Laboratories held at New Delhi on 27/29 -4 -1993, that the iodine with purity between 99.5% and 100.5% is required to be considered as "other than crude iodine" by the authorities for denying the benefit of the exemption. It is stated that in terms of the report of CRCL, the item is of "pharmacopical grade" requiring the item to be treated as "other than crude iodine". Further, reference is made to the test report of Dy. Chief Chemist, Chennai, which indicates that the item in question is in the form of 'Gray Flakes' and it conforms to any pharmocopical standard and it is not in crude form. It is stated that it is admitted that the item though does not conform to the US pharmacopoeia which specifies the iodine content should not be less than 99.8% for pharmacopical standards, however, it is stated that the Indian Pharmacopoeia prevail over the US Pharmacopoeia. It is also admitted in the grounds of appeal that the Encyclopaedia of Industrial Chemical Analysis (Vol. 14, Page 590) indicates that crude iodine is subject to manufacturer's specification and generally exceeds 99% purity (pharmaceutical 'standards' differ from country to country).