1. The appellants herein imported a consignment of Sodium Lauryl Sulphate in March 1985 which was classified by the Custom House under Heading 29.01/45(1)-CTA read with Item 15-AA of Central Excise Tariff for countervailing duty. They claimed refund after clearance as above on the ground that the goods conforming to Indian Pharmacopiea (I.P) and issued for manufacture of drugs and medicines would be correctly assessable under Heading 29.01/45 (13) at a lower rate of duty. They also claimed that the product satisfies definitiion of the Bulk drug in Central Excise Notification 104/82. In that notification, Explanation I says that bulk drug means any chemical, biological or plant product conforming to pharmacopical standards used for the diagnosis, treatments, mitigation or prevention of diseases in human beings or animals and used as such or as an ingredient in any formulation. They also produced certificate from the Director of Medical and Health Services, Rajasthan to say that Sodium Lauryl Sulphate is a pharmaceutical aid. The Assistant Collector rejected the claim holding that the goods imported is not a drug by itself but a general purpose chemical which finds use as wetting agent in textiles, detergents etc.
The Assistant Collector's order was upheld by the Collector (Appeals).
2. When the appeal was called, none was present for the appellants who have in their letter dated 28-9-1989 said that they have nothing to add to what is contained in the appeal memo in which they have stated there is no definition of drug/drug aid in Customs or Central Excise Tariff and that the definition in Drugs & Cosmetics Act 1940 in Section 3(b)(i) and 3(b)(ii) should be adopted according to which even components of drug like gelatine capsules would be considered as drug.
They have, therefore, claimed assessment of Sodium Lauryl Sulphate under Heading 29.01/45 (13)-CTA which covers pharmaceutical chemicals.
3. Shri V. Chandrasekaran, the learned SDR appearing for the department justified classification already adopted under Heading 29.01/45(1) by the Custom House which covers organic compounds and other products specified in Notes 1 and 2 of Chapter Notes under Chapter 29. He referred to Note 1. He further cited and relied upon a decision of this Tribunal in the case of Anand Synthochem Pvt. Ltd. v. Collector of Central Excise, Bombay -1984 (17) E.L.T. 583 wherein the Cegat held that Sodium Lauryl Sulphate was classifiable under item 15-AA of Central Excise Tariff as a surface active agent. The learned SDR pointed out that here also the finding of lower authorities is that Sodium Lauryl Sulphate is wetting/emulsifying agent and cannot be considered a drug or chemicals having prophylactic and therapeutic value and used in drugs.
4. We have given careful consideration to the written submission of the appellants and the submissions made before us by Shri Chandrasekaran for the department. We are unable to agree with the appellant's contention that classification of Sodium Lauryl Sulphate should be made following the definition of drug in the Drugs and Cosmetics Act, 1940.
This is because we find from the decision of the Tribunal in the Anand Synthochem Pvt. Ltd. case cited by Shri Chandrasekaran, the classification of the goods under Item 15-AA of Central Excise Tariff has been confirmed. As for the classification under the Customs Tariff Act, one has to have regard to the Chapter Notes in determining the classification under the Customs Tariff Act. In this case, we find a lot of force in the learned SDR Shri Chandrasekaran's submissions that Sodium Lauryl Sulphate answers more correctly to the tariff description under Heading 29.01/45(1)-CTA, "Organic compounds including antibiotics, hormones, sulpha drugs, vitamins and other products specified in Notes 1 and 2 of this Chapter". And Note 1 would cover the product. Further, in order to be classified under Heading 29.01/45(13) CTA as pharmaceutical chemicals as per the Tariff description, it has to be shown that the item is a chemical having prophylactic or therapeutic value and used solely or predominantly as drugs, not elsewhere specified. In this regard the appellants are relying upon the certificate dated 7-6-1985 given to them at their request by one Ashwini Kumar who has signed the certificate "FOR" Drug Controller and Director of Medical and Health Services, Rajasthan. This certificate on perusal shows that it only certifies that "Sodium Lauryl Sulphate is a pharmaceutical aid and may be used as a wetting agent and emulsifying agent etc. in the fabrication of drug dosage forms like tablets, liquids and ointments. The certificate does not in terms confirm or certify that the goods is a chemical having prophylactic and therapeutic value, nor does it help an inference about its sole or predominant use as drugs. On the other hand, the certificate refers to the goods only as a pharmaceutical aid finding use as wetting or emulsifying agent. Hence, it has to be held that the appellants have not succeeded in making out a case for classification of the goods under Heading 29.01/45(13) as pharmaceutical chemicals. In the result, we see no reason to interfere with the order passed by the Collector (Appeals) and the appeal is therefore, rejected.