GLAXO LABORATORIES INDIA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Messrs Glaxo Laboratories (India) Ltd. are the manufacturers of a number of pharmaceutical and chemical preparations and medicines. The petitioners import a substance known as Polyvinyl Pyrrolidone (also known as 'P.V.P.') which is required by the petitioners in the preparation of pharmaceutical products. Polyvinyl Pyrrolidone is marketed internationally under the trade name 'Plasdone' or 'Povidone'.

(2.) In 1971 the petitioners imported a consignment of 4500 pounds of Plasdone of pharmaceutical grade. The consignment arrived at Bombay in September 1971. The petitioners filed a Bill of Entry in respect of this consignment classifying Plasdone under Tariff Item No. 87 of the Indian Tariff Act 1934. Item 87 was the residuary item under the First Schedule to the Indian Tariff Act, 1934 which was then in force. The rate of duty payable under tariff item No. 87 was 60 per cent. The Customs authorities, however, did not accept this classification. They classified 'Plasdone' under tariff item 82(3) which deals with artificial or synthetic resins. Under tariff item 82(3) the goods were assessable to customs duty at the rate of 100 per cent with countervailing duty at the rate of 36 per cent. The petitioners paid duty under item 82(3) under protest. They submitted an application in March 1972 claiming a refund of Rs. 1,21,816.80 being the difference between the duty paid under tariff item 82(3) and the duty which would have been paid under tariff item 87, and countervailing duty. In their application the petitioners stated that Plasdone was a pharmaceutical grade material and it was used as an adjuvant in their pharmaceutical preparations. The 2nd respondent, namely, Asstt. Collector of Customs by his order dated 15th December, 1972 rejected the application of the petitioners. The petitioners preferred an appeal to the Appellate Collector of Customs. The petitioners' appeal was rejected by the Appellate Collector of Customs by an order dated 18th November, 1974. The petitioners preferred a revision application from this order. In the course of a personal hearing which was granted to the petitioners in respect of their revision application, the petitioners submitted, in the alternative, that Plasdone was classifiable as a 'drug' under tariff item 28. The submissions of the petitioners were rejected by the respondents and the petitioners' revision application was dismissed under an order dated 12th December, 1979. Thereafter, the petitioners have filed the present petition.

(3.) It is the case of the petitioners that 'Plasdone' should be classified under tariff item 28 and not under tariff item 82(3). In the alternative, it should be classified under the residuary item 87. The petitioners strongly contend that the goods in question cannot be classified under tariff item 82(3).