Full Judgment
2. The appellants had imported Virginiamycin (Poultry feed) by brand name Stefac 1000 from Belgium under various Bills of Entry. The details of the Bills of Entry in respect of goods imported are covered under Bills of Entry 4166 dated 7-3-1997, No. 10158 dated 17-3-1997 and No.16389 dated 29-4-1997 are itemised in the Show Cause Notice. The appellants claimed that the imported goods fall under Tariff Item 2302 and not under various subheadings under Heading 29. The department claims that the goods covered under Bills of Entry 4166, 10158 and 16389 should be assessed under Heading 2941.00 and Heading 2941.90. The department also charged them for violation of Section 111 (m) of the Customs Act. It is the contention of the assessee before the authorities that the goods are concentrate of Virginiamycin having 100% purity and it should be treated as animal feed. They also relied upon the observation of the ADC on the reverse of the Bill of Entry which says that it is used only as an animal/cattle/poultry supplement and not for medicinal use. They also relied upon the judgment of the Larger Bench of the Tribunal in Tetragon Chemie Pvt. Ltd. v. CCE -1999 (30) RLT 366 and also the judgment of the South Regional Bench in Appeal E2227/89 in the case of Commissioner of Central Excise, Bangalore v.Tilrode Chem, where the SRB has followed the Larger Bench decision mentioned above.
3. Shri A. Setalwad, the ld. Senior Counsel for the applicants argued that the goods are covered by the decisions of the Larger Bench and the SRB. Therefore, the department's case of treating it as an item falling under Heading 29 of the Tariff is misplaced especially when the certificate of the ADC as reflected in the reverse of the Bill of Entry clearly proves the case of the appellants.
4. As against this Shri A. Ashokan, the ld. JDR says that it is not a preparation but purely 100% antibiotic and it is not food supplement at all. In view of the HSN provisions Virginia is treated as Peptide and Peptides are covered under Heading 2940.
5. We have considered the submissions of both the sides. Bills of Entry in these cases have been filed sometime in March/April, 1997. Bill of Entry have been filed subsequent to the amendment made in the Customs Act in 1996, namely introduction of Section 114A of the Customs Act.
The question whether this particular product comes within the Entry 29 or Entry 23 have to be gone into in depth. It is no doubt true in the Larger Bench decision where 5 Members of the Bench have taken a decision in Tetragon Chemie Pvt. Ltd. & Ors v. CCE, Bangalore & Ors, the Tribunal was concerned with premix. Here it is not a premix but a 100% antibiotic. In the case before the SRB was a product called animal feed supplement containing active ingredient namely virginiamycin. In the said SRB case there was no evidence placed on record by the Assistant Commissioner to show that the item is P or P medicine and merely because 2% of vitamins being added to the said item could not make an item as a medicament. Here in the instant case, it is purely a 100% antibiotic. No doubt the learned Senior Counsel during the course of his arguments invited our attention to the judgment of the Supreme Court in Sun Export Corporation v. CC, Bombay -1997 (93) E.L.T. 641 (S.C.). But when we go through the case it was found that the said case dealt with the animal food supplement such as premix of Vitamin AD3.
Here in the instant case, there is no such premix. The Commissioner in the impugned order has distinguished the case of Tetragon Chemie Pvt.
Ltd. v. C.C.E. We are therefore prima facie of the view that the three judgments cited, viz (i) Tetragon Chemie Pvt. Ltd. v. C.C.E. -1999 (30) RLT 366, (ii) CCE, Bangalore v. Tilrode Chem - Order No 338/99 in E/2227/89 and (iii) the Supreme Court judgment in the case of Sun Export Corporation - 1997 (93) E.L.T. 641 may not be applicable to the facts of the present case. We are prima facie of the view that the assessees have not made out a prima facie strong case. However, taking note of the fact that it is only prepayment of penalty, we direct the assessees to pay a sum of Rs. 5.00 lacs within one month from the date of receipt of this order and report compliance on 15-11-1999 failing which their appeal is liable to be dismissed. On such a deposit being made, there shall be stay of recovery and waiver of pre-deposit of the balance of penalty amounts till the disposal of the appeal.