MAX INDIA LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellant is a manufacturer of bulk drugs. In 1992, the appellant imported four consignments of 'Wet Acry -lonitrile Fibre" and cleared the same under exempted rates (Notification No. 64 of 1979). Subsequently, show cause notices were issued alleging that "Wet Acry -lonitrile Fibre" was not eligible for the exemption as it was classifiable under Customs Tariff Heading 5503.30. The ground being that only Acrylonitrile which is classifiable under Chapters mentioned in the Notification (28, 29 and 30) were eligible for exemption.

(2.) THE appellant contested the allegation pointing out that Chapter 55 is for textile items, and Acrylonitrile fibre under import being specifically for use in pharmaceutical industry, was classifiable under Chapter 29 and not under Chapter 55. Literature from the appellant's supplier (showing that the item, was pharmaceutical grade) and that the consignments were actually used in drug making were also produced. Appellant's contentions were rejected by the lower authorities and it was held that exemption was not due to the appellant. The present appeal is directed against those orders.

(3.) WE may reproduce the relevant parts of the exemption notification in question: Exemption to certain specified goods imported for manufacture of drugs. - In exercise of the powers conferred to Sub -section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 44 -Customs, dated the 1st March, 1979, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the Table annexed here and falling within Chapter 28, Chapter 29 or Chapter 30 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for the manufacture of penultimate drug intermediates or drugs.