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CASE NO.: Appeal (civil)  1076-1080 of 2002

PETITIONER: M/s. Span Diagnostics Ltd

RESPONDENT: Commissioner of Central Excise, Surat

DATE OF JUDGMENT: 30/04/2007

BENCH: S.H. KAPADIA & B. SUDERSHAN REDDY

JUDGMENT: J U D G M E N T

WITH Civil Appeal No.5322 of 2002 M/s. J. Mitra & Co. Ltd.                                \005 Appellant Versus Commissioner of Central Excise, Delhi         \005Respondent AND Civil Appeal Nos.1953-54 of 2003 Commissioner of Central Excise, New Delhi       \005 Appellant Versus M/s. J. Mitra & Co. Ltd. & another                    \005 Respondents

Kapadia, J.

       From the impugned judgment dated 1.1.2002  delivered by the Customs, Excise and Gold (Control)  Appellate Tribunal (’CEGAT’, for short), New Delhi, vide  Appeal No.E/1644 and 1645 of 2000-C, C.A. No.5322 of  2002 and C.A. No.1953-54 of 2003 have been filed by  the assessees and by the Department respectively.  For  the sake of convenience and clarity we proceed to decide  each of the following civil appeals serially.

C.A.No.5322/2002\026filed by M/s. J. Mitra & Co.Ltd. (Assessee) In this civil appeal we are concerned with the  classification of biotech products.   

The said assessee was engaged in the manufacture  of blood-grouping reagents and diagnostic and laboratory  reagents.  It had obtained registration on 10.9.99 for the  manufacture and clearances of the following products: (1)     Anti-A Mono Clonal (2)     Anti-B Mono Clonal (3)     Anti-Decoders Mono Clonal (4)     Anti-Decoders Mono Clonal (5)     Anti-Decoders 1gM Mono Clonal (6)     Anti-Decoders 1gG Mono Clonal The above six items are called Monoclonal  Antibodies (for short, ’MABs’).  They were classified by the  assessee under Chapter Sub-heading 3002.00 (Chapter  Heading 30.02) of Central Excise Tariff Act (for short,  ’CETA’) whereas the Department classified the MABs  under CSH 3005.90 (Chapter Heading 30.05) of CETA.   The assessee classified MABs as "cultures of micro- organisms" whereas the Department classified the said  MABs as "pharmaceutical products, not elsewhere  specified or included".

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The CEGAT (Tribunal), vide the impugned  judgment, upheld the classification of MABs under CSH  3005.90 of CETA as claimed by the Department, hence  this civil appeal is filed by the assessee.  

For the sake of convenience, we quote hereinbelow  Chapter Note 3 in Chapter 30 of the CETA concerning  pharmaceutical products which reads as under:

"CHAPTER 30 PHARMACEUTICAL PRODUCTS Notes : 1. and 2.       xxx             xxx             xxx 3.    Heading No.30.05 applies only to the  following, which are to be classified  in that heading and in no other  heading of this Schedule:-

(a) to (d)      xxx             xxx             xxx

(e)     Blood grouping reagents;

(f) to (h)      xxx             xxx             xxx"

We quote hereinbelow Chapter Heading 30.02 and  CSH 3002.00 of CETA which read as under: "CHAPTER 30 PHARMACEUTICAL PRODUCTS Notes :  1. to 5.       xxx             xxx             xxx Heading  No. Sub-heading  No. Description of goods Rate of  duty (1) (2) (3) (4) 30.02 3002.00 Antisera and other blood  fractions; Vaccines, Toxins,  Cultures of micro-organisms  (including ferments but  excluding yeasts) and similar  products Nil

We quote hereinbelow Chapter Heading 30.05 in  entirety of CETA which reads as under: "CHAPTER 30 PHARMACEUTICAL PRODUCTS Notes : 1. to 5.                xxx             xxx             xxx Heading  No. Sub-heading  No. Description of goods Rate of

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duty (1) (2) (3) (4) 30.05

Pharmaceutical goods, not  elsewhere specified

3005.10 Chemical contraceptives Nil

3005.20 Dental cements and other dental  fillings 15%

3005.90 Others 15%

We also quote hereinbelow relevant extracts of  Chapter Note No.2 in Chapter 30 of HSN (Second Edition)  which read as follows: "CHAPTER 30

PHARMACEUTICAL PRODUCTS Chapter Notes.  1.              xxx             xxx             xxx 2.      For the purposes of heading No.30.02,  the expression "modified immunological  products" applies only to monoclonal  antibodies (MABs), antibody fragments,  antibody conjugates and antibody  fragment conjugates."

We also quote hereinbelow Chapter Heading 30.02  in entirety from the said HSN which reads as under:  "30.02 \026 HUMAN BLOOD; ANIMAL BLOOD  PREPARED FOR THERAPEUTIC, PROPHYLACTIC  OR DIAGNOSTIC USES; ANTISERA AND OTHER  BLOOD FRCTIONS AND MODIFIED IMUNOLOGICAL  PRODUCTS, WHETHER OR NOT OBTAINED BY  MEANS OF BIOTECHNOLOGICAL PROCESSES;  VACCINES, TOXINS, CULTURES OF MICRO- ORGANISMS (EXCLUDING YEASTS) AND SIMILAR  PRODUCTS.

3002.10 \026 Antisera and other blood fractions  and modified immunological  products, whether or not obtained by  means of biotechnological processes

3002.20 \026 Vaccines for human medicine

3002.30 \026 Vaccines for veterinary medicine

3002.90 \026 Other

This heading covers: (A)     Human blood (e.g., human blood in sealed  ampoules).

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(B)     Animal blood prepared for therapeutic,  prophylactic or diagnostic uses

Animal blood not prepared for such uses falls in heading  05.11.

(C) Antisera and other blood fractions and modified  immunological products.

These products include:

(1)     Antisera and other blood fractions.

Sera are the fluid fractions separated from  blood after clotting. The heading covers, inter alia, the  following products derived from blood:  "normal" sera, human normal  immunoglobulin, plasma, fibrinogen,  fibrin, blood globulins, serum globulins  and haemoglobin.  The heading also  includes blood albumin (e.g., human  albumin obtained by fractionating the  plasma of whole human blood), prepared  for therapeutic or prophylactic uses.

Antisera are obtained from the blood of  humans or of animals which are immune  or have been immunized against diseases  or ailments, whether these are caused by  pathogenic bacteria and viruses, toxins or  allergic phenomena, etc.  Antisera are  used against diphtheria, dysentery,  gangrene, meningitis, pneumonia,  tetanus, staphylococcal or streptococcal  infections, snake bite, vegetable poisoning,  allergic diseases, etc.  Antisera are also  used for diagnostic purposes, including in  vitro tests. Specific immunoglobulins are  purified preparations of antisera.

The heading does not cover blood albumin not  prepared for therapeutic or prophylactic uses  (heading 35.02) or globulins (other than blood  globulins and serum globulins) (heading 35.04).   The heading also excludes medicaments which are  not separated from the blood but which in some  countries are described as "sera" or "artificial sera";  they include isotonic solutions based on sodium  chloride or other chemicals and suspensions of  pollen which are used against allergic diseases.

(2)     Modified immunological products,  whether or not obtained by means of  biotechnological processes.

Products whose antigen-antibody reaction  corresponds to natural antisera and which  are used for diagnostic or therapeutic  purposes and for immunological tests are  to be regarded as falling within this  product group.  They can be defined as  follows:

(a)     Monoclonal antibodies (MABs) \026

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specific immunoglobulins from  selected and cloned hybridoma cells  cultured in a culture medium or  ascites. (b)     Antibody fragments \026 parts of an  antibody protein obtained by means of  specific enzymatic splitting. (c)     Antibody and antibody fragment  conjugates -  enzymes (e.g., alkaline  phosphatase, peroxidase or  betagalactosidase) or dyes (fluorescin)  covalently bound to the protein  structure are used for straightforward  detection reactions.

(D) Vaccines, toxins, cultures of micro-organisms  (excluding yeasts) and similar products.

These products include:

(1)     Vaccines \026 preparations of microbial  origin containing either viruses or bacteria  suspended in saline solutions, oil (lipovaccines)  or other media.  These preparations have  usually been treated to reduce their toxicity  without destroying their immunising properties.

The heading also covers mixtures (such as  Diphtheria, Tetanus and Pertussis (DPT)  vaccine) consisting of vaccines and toxoids.

(2) Toxins (poisons secreted by bacteria),  toxoids, crypto-toxins and anti-toxins, of  microbial origin.

(3)     Cultures of micro-organisms (excluding  yeasts).  These include ferments such as  lactic ferments used in the preparations of  milk derivatives (kephir, yogurt, lactic  acid) and acetic ferments for making  vinegar; moulds for the manufacture of  penicillin and other antibiotics; and  cultures of micro-organisms for technical  purposes (e.g., for aiding plant growth).

Milk or whey containing small quantities of lactic  ferments is classifiable in Chapter 4.

(4)     Virus, human, animal and vegetable and  anti-virus. (5)     Bacteriophage.

The heading also includes diagnostic  reagents of microbial origin, other than  those provided for in Note 4 (d) to this  Chapter \026 see heading 30.06.  It does not  cover enzymes (rennet, amylase, etc.) even  if of microbial origin (streptokinase,  streptodornase, etc.) (heading 35.07) nor  dead single-cell micro-organisms (other  than vaccines) (heading 21.02).

The products of this heading remain classified  here whether or not in measured doses or put up for  retail sale and whether in bulk or in small packings."

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We also quote hereinbelow Chapter Heading 30.06  of HSN which is equal to Chapter Heading 30.05 in CETA  and which reads as under: "30.06 \026 PHARMACEUTICAL GOODS SPECIFIED  IN NOTE 4 TO THIS CHAPTER.

3006.10 Sterile surgical catgut, similar sterile suture materials  and sterile tissue adhesives for surgical wound closure;  sterile laminaria and sterile laminaria tents; sterile  absorbable surgical or dental haemostatics 3006.20 Blood-grouping reagents 3006.30 Opacifying preparations for X-ray examinations;  diagnostic reagents designed to be administered to the  patient 3006.40 Dental cements and other dental fillings; bone  reconstruction cements  3006.50 First-aid boxes and kits 3006.60 Chemical contraceptive preparations based on  hormones or spermicides

This heading covers only the following goods:

(1)  Sterile surgical catgut, similar sterile suture  materials and sterile tissue adhesives for  surgical wound closure.

This item covers all kinds of ligatures for  surgical sutures, provided they are  sterile.  These ligatures are usually put  up in antiseptic solutions or in sealed  sterile containers.

The materials used for such ligatures  include: (a)     catgut (processed collagen from the  intestines of cattle, sheep or other  animals); (b)     natural fibres (cotton, silk, linen); (c)     synthetic polymer fibres, such as  polyamides (nylons), polyesters; (d)     metals (stainless steel, tantalum,  silver, bronze).

The item also covers tissue adhesives  such as those consisting of butyl  cyanoacrylate and a dye; after  application, the monomer polymerises  and the product is therefore used in place  of conventional suture materials for  closing internal for closing internal or  external wounds of the human body.

The heading excludes non-sterile suture materials.  These  are classified according to their nature e.g. catgut  (heading 42.06), silkworm put, textile yarns, etc. (Section  XI), metal were (Chapter 71or Section XV).

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(2)   Sterile laminaria and sterile laminaria  tents.

This item is restricted to sterile laminaria  and sterile  laminaria tents (small  lengths of algae, sometimes brown and  with a rough grooved surface).  They swell  considerably on contact with moist  substances and become smooth and  flexible.

They are therefore used in surgery as a  means of dilation.

Non-sterile products are excluded (heading 12.12)

(3)     Sterile absorbable surgical or dental  haemostatics.

This item covers sterile products used in  surgery or dentistry to stop bleeding and  having the property of being absorbed by  the body fluids.  It includes oxidized  cellulose, generally in the form of gauze of  fibres ("wool"), in pads, pledgets or strip,  gelatin sponge or foam; calcium alginate  gauze, "wool" or "film".

(4)  Blood-grouping reagents.

The reagents under this heading must be  suitable for direct use in blood-grouping.   They are either sera of human or animal  origin, or vegetable extracts of seeds or  other parts of plants (phytagglutinins).   These reagents are used in the  determination of blood-groups by  reference to the characteristics of the  blood corpuscles or of the blood serum.   In addition to the active principle(s), they  may contain substances to strengthen  their activity or stabilize them  (antiseptics, antibiotics, etc.).

A. The following are to be regarded as  reagents for determining blood-group  by reference to the characteristics of  blood corpuscles:

(i)     Preparations for determining the A,  B, O and AB groups.  A1 and A2 sub- groups and Factor H. (ii)    Preparations for determining the M,  N, S and P groups and other groups  such as Lu, K and Le. (iii)   Preparations for determining the Rh  groups and C, F, V, etc. sub-groups. (iv)    Preparations for determining the  blood-groups of animals.

B. The preparations to be regarded as  reagents for determining the  characteristics of sera  are those  used to determine:

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(i)     characteristics of Gm, Km, etc.,  systems; (ii)    serum groups Gc, Ag, etc.

C. Anti-human globulin serum (Coombs  serum), which is essential in certain  blood-grouping techniques, is also to  be regarded as a reagent of this  heading."  

D.                              xxx             xxx             xxx

5. to 8.                        xxx             xxx             xxx"

According to the assessee, MAB is produced by  hybridoma technology in which hybrids (fused cells) are  allowed to grow by multiplication in culture medium and  in that process they secrete the antibodies.  According to  the assessee, these hybrids (fused cells) are micro- organisms and as they grow in culture medium,  therefore, they are classifiable under CSH 3002.00 as  "cultures of micro-organisms".  In this connection,  reliance is place on "Compendium of Transfusion of  Medicine" by Dr. R. N. Makroo.  In his book Dr. R.N.  Makroo has stated that with advancement in  biotechnology, hybridoma technology has made available  a new source of reagents; that before the introduction of  hybridoma technology, the A.B.O grouping reagents were  derived from human donors with or without  immunization.  According to Dr. Makroo, the main  reagent used in blood-bank laboratory is antisera (which  is an antibody).  Essentially MAB, according to Dr.  Makroo, is obtained from cell culture.  It helps in blood- grouping.  The development of MAB obtained from cell  culture secreting antibodies called hybridoma, has made  available a new source of blood-grouping reagents.   According to the assessee, Chapter Heading 30.05 of  CETA is the same as Chapter Heading 30.06 of HSN.   Under Chapter Heading 30.06, there is an Explanatory  Note in HSN which states that "blood-grouping reagents"  (which term also finds place in Chapter Note ’3’ to  Chapter 30 of CETA) are either the sera of human or  animal origin, or vegetable extracts of seeds or other  parts of plants and, therefore, such reagents fall under  Chapter Heading 30.05 of CETA.  However, according to  the assessee, MAB is not the sera of human or animal  origin or vegetable extracts or plant extracts and,  therefore, it cannot fall under Chapter Heading 30.05 of  CETA and consequently it has to fall under Chapter  Heading 30.02 of CETA.  According to the assessee, only  polyclonal antibodies are covered under Chapter Heading  30.05 whereas MABs are covered under Chapter Heading  30.02 as "culture of micro-organism".

According to the Department, on the other hand,  MAB is a "blood-grouping reagent" which is used in  hospitals for blood-grouping.  These reagents, according  to the Department, are used in the determination of  blood-groups by reference to the characteristics of blood  corpuscles of blood-serum and, therefore, the said MAB  falls under Chapter Heading 30.05.  According to the  Department, the said MAB has no therapeutic or  prophylactic value; that they are merely blood-grouping

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reagents and, therefore, they fall in Chapter Note ’3’  which states that all "blood-grouping reagents" fall under  Chapter Heading 30.05.  On behalf of the Department, it  is further argued that on account of Note 3(e) to Chapter  30 of CETA, MAB can only be classified under Chapter  Heading 30.05 of CETA.  According to the Department,  even in common parlance MAB is known as "blood- grouping reagent" and, therefore, it falls under Chapter  Heading 30.05 of CETA.  On behalf of the Department, it  is argued that in the present case we should not go by  HSN.  According to the Department, HSN deals with  human blood, animal blood prepared for diagnostic uses;  antisera and other blood fractions and Modified  Immunological Products (for short, ’MIP’), whether or not  obtained by means of biotechnological process; vaccine,  toxin, cultures of micro-organisms and similar products  whereas Chapter Heading 30.02 of CETA does not deal  with items like human blood and MIP which items are  dealt with by HSN and, therefore, according to the  Department, in the present case, one should not rely  upon the Explanatory Note to HSN.

We find merit in the arguments advanced on behalf  of the assessee.  There is no dispute that MAB is a blood- grouping reagent.  The question is : whether merely  because MAB is a blood-grouping reagent, should it be  classified under Chapter Heading 30.05 on account of  Note No.3(e) to Chapter 30 of CETA, even though MAB is  a "culture of micro-organism" falling under CSH 3002.00  (Chapter Heading 30.02).  It is well-settled that the width  of the Heading under CETA cannot be expanded by  reading Note 3(e) to Chapter 30.  In our view, MAB is a  "culture of micro-organism".  It falls specifically under  Chapter Heading 30.02 of CETA.  MAB is not a sera of  human or animal origin, it is not a vegetable extract, it is  not a plant extract and on the other hand it is obtained  by hybridoma technology (cellular fusion).  Therefore, it  cannot fall under Chapter Heading 30.05 of CETA.   Moreover, Chapter Heading 30.05 is residuary.  The  width of Chapter Heading 30.05 is restricted to products  which are mentioned in Note 3(e) to Chapter 30.  In other  words, not all those pharma products which could not be  classified elsewhere in the tariff would fall under Chapter  Heading 30.05, but only those which are specified in Note  No.3 would fall under Chapter Heading 30.05.  In the  present case, MAB specifically falls in Chapter Heading  30.02 as culture of micro-organism.  If an item like MAB  is specifically falling in Chapter Heading 30.02, it cannot  be classified under Chapter Heading 30.05 merely on  account of Chapter Note ’3’.  In the present case, the  Department seeks to expand the scope of Chapter  Heading 30.05, which is residuary, by relying upon Note  ’3’ even when MAB falls under Chapter Heading 30.02 as  "culture of micro-organism".  In the present case MAB is  not polyclonal, it is monoclonal and, therefore, it is  known as MAB.  In the case of Inter Care Ltd.  v.   Collector of Customs, New Delhi \026 1997 (89) ELT 545  (Tribunal) it has been held that polyclonal product would  fall under Chapter Heading 30.05.  However, in the  present case, MAB is not polyclonal, it is monoclonal and  it is obtained by culture of micro-organism and,  therefore, it would fall under Chapter Heading 30.02  (CSH 3002.00).  Our view is also supported by the  Explanatory Note in HSN to Chapter Heading 30.02  which refers to MIP.  The said Note conclusively proves

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that MAB is a "culture of micro-organism" and, therefore,  it would fall under Chapter Heading 30.02.  Lastly, even  the HSN Explanatory Note to Chapter Heading 30.06  corresponding to Chapter Heading 30.05 of CETA, shows  that MAB is excluded from Chapter Heading 30.05.  That  Heading states that blood-grouping reagents, suitable in  blood-grouping, are sera either of human or animal origin  or vegetables’ extracts or plants’ extracts.  In other  words, MAB which is not the sera of either human or  animal origin or vegetable or plant extracts, cannot fall  under Chapter Heading 30.05, particularly, when MAB is  a culture of micro-organism.  There is one more aspect  which needs to be highlighted.  In the HSN, we have  Chapter Heading 30.02 which refers to human blood;  animal blood; "antisera and other blood fractions and  MIP"; therefore, human blood is one item, animal blood is  another item whereas "antisera, blood fraction and MIP"  is the third item.  Therefore, the third item forms one  separate class.  In that class we have MIP which includes  MAB.  Therefore, if one reads the third item as a separate  class as "antisera and blood fractions" then abridgement  of HSN entries by CETA cannot rule out MIP which  includes MAB.  Therefore, when HSN treats antisera,  blood fractions and MIP including MAB as one class then  there is no contradiction between Chapter Heading 30.02  of CETA and Chapter Heading 30.02 of HSN.  Therefore,  taking any view of the matter, HSN cannot be ruled out.

For the above reasons, we find merit in the civil  appeal filed by the assessee (Civil Appeal No.5322 of  2002) and, accordingly, we classify the above six items  under Chapter Heading 30.02 of CETA.   

Accordingly, the said civil appeal is answered in  favour of the assessee and against the Department.

C.A.Nos.1953-1954/2003\026filed by the Department The short question which needs to be decided in  these civil appeals is : Whether Beta Visipreg, Visipreg  Strip, Pregnancy Test Card fall as "antisera" under  Chapter Heading 30.02 of CETA (according to the  assessee) or whether it falls under Chapter Heading  38.22 of CETA as "diagnostic or laboratory reagent" (as  contended by the Department).

The above three products were cleared by the  assessee as Pregnancy Test Kits (PTK).  According to the  assessee the above three products are for the detection of  hCG hormones in urine, as a test for pregnancy.  The  three products are meant for in-vitro diagnostic use only.   According to the assessee, Chapter Heading 30.02 covers  antisera of all forms.

On the other hand, it was argued on behalf of the  Department that although PTK was an antisera, the  above three products were classifiable as diagnostic or  laboratory reagents under Chapter Heading 38.22 as they  were used exclusively in laboratory for diagnostic  purposes.  According to the Adjudicating Authority,  Chapter Heading 30.02 applied only to crude antisera  and since the above three products were refined antisera,  they did not fall under Chapter Heading 30.02.

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At the outset, we quote hereinbelow Chapter  Heading 38.22 (CSH 3822.00) which reads as under: "CHAPTER 38 MISCELLANEOUS CHEMICAL PRODUCTS

Notes: 1. to 3.                xxx             xxx             xxx

Heading  No. Sub-heading  No. Description of goods Rate of  duty (1) (2) (3) (4) 38.22 3822.00 Composite diagnostic or  laboratory reagents, other than  those of Chapter 30 20%

As stated above, Chapter Heading 30.02 refers to  antisera and other blood fractions.  According to the  Explanatory Note in HSN (Seventh Edition), antisera is  obtained from the blood of humans or animals which are  immune against diseases.  Antisera is used for diagnostic  purposes, including in-vitro tests.  There is nothing like  crude antisera and refined antisera.  In the present case,  even according to the Department, PTK is an antisera,  however, according to the Department, PTK is a refined  antisera.  As stated, antisera falls under Chapter Heading  30.02.  In the circumstances, "antisera" is covered by  Chapter Heading 30.02 and since it is covered by that  Heading, Chapter Heading 38.22 will not apply.  If one  reads Chapter Heading 38.22, it becomes clear that there  could be diagnostic or laboratory reagents which could  fall under Chapter Heading 30.02 and also under  Chapter Heading 38.22.  However, if a diagnostic or  laboratory reagent like antisera falls under Chapter  Heading 30.02 then it stands excluded from Chapter  Heading 38.22.

Before concluding we may record the statement  made on behalf of M/s. J. Mitra & Co. Ltd. that they have  closed down their business in producing the following  two items, namely, Syphilis RPR (VDRL) and Salmonella  Antigens.  Hence, they do not seek to press the  classification issue concerning the said two items.

Hence we answer C.A. No.1953-54 of 2003, filed by  the Department, in favour of the assessee and against  the Department.

For the above reasons, the assessee succeeds on  Item Nos. 1 to 9, mentioned at page No.5 of the paper  book in C.A.Nos.1953-54/2003 and, therefore, the  Department was not entitled to invoke the extended  period of limitation under Section 11A of the Central  Excise Act, 1944.

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C.A.Nos.1076-1080/2002 \026 filed by M/s. Span Diagnostics  Ltd. (assessee)    

These civil appeals are filed by M/s. Span  Diagnostics Ltd. (assessee) under Section 35(L) of the  Central Excise Act, 1944, against the decision of the  CEGAT (for short, ’Tribunal’) dated 4.12.2001. In these civil appeals we are concerned with Item  Nos.21 to 32, referred to in Annexure A to the paper book  (at pages 27-28), Item Nos.35, 36 and 37 in Annexure A  to the paper book (at pages 27-28) and Item Nos.1 to 15  in Annexure B to the paper book (at page 29).

At the outset we quote hereinbelow Item Nos.21 to  32 of Annexure A which read as under: "ANNEXTURE- ’A’ Name of the products which will fall under chapter sub-heading  3005.90     -------------------------------------------------------- Sr.  Code No.   Item                         Pkg. No. --------------------------------------------------------   21.  11127A    Anti-A (Monoclonal)           5 ML 22.  11127B    Anti-A (Monoclonal)          10 ML 23.  11127C    Anti-A (Monoclonal)          3x5 ML 24.  11128A    Anti-B (Monoclonal)           5 ML 25.  11128B    Anti-B (Monoclonal)          10 ML 26.  11128C    Anti-D (Monoclonal lgG+lgM) 3x5 ML 27.  11129A    Anti-D (Monoclonal IgM)       5 ML 28.  11129B    Anti-D (Monoclonal IgM)      10 ML 29.  11129C    Anti-D (Monoclonal IgM)     3x5 ML 30.  11130A    Anti-D (Monoclonal IgG + IgM) 5 ML 31.  11130C    Anti-D (Monoclonal IgG + IgM) 3x5 ML 32.  11131A    Anti-A, B & D (Mono. IgM)   3x5 ML

------------- ---------------------------------------        It is not in dispute that above Item Nos.21 to 32 are  identical to Item Nos.1 to 6 in C.A. No.5322 of 2002 -  filed by M/s. J. Mitra and Co. (assessee).

In the circumstances, we hold for the above reasons  that Item Nos.21 to 32 would fall under Chapter Heading  30.02 of CETA.  Accordingly, the assessee succeeds in  this regard.

As regards Item Nos.35, 36 and 37 of Annexure A is  concerned, we quote hereinbelow the exact description of  the said three items which read as under: "ANNEXTURE- ’A’ Name of the products which will fall under chapter sub-heading  3005.90     -------------------------------------------------------- Sr.  Code No.   Item                         Pkg. No. --------------------------------------------------------   35.  18411     P.P.D. STU/0.1 ML             5 ML 36.  18411A    P.P.D. 10TU/0.1 ML            5 ML 37.  18412A    Tuberculin P.P.D.                Lyophilized 10TU/0.1 ML     500 TU

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On this point we may state that the Adjudicating  Authority had referred the matter for opinion to Dy. Chief  Chemist who opined that the three items were "cultures  of micro-organisms" and, therefore, they came under  Chapter Heading 30.02 and not under Chapter Heading  30.05.  Apart from the question as to whether the Dy.  Chief Chemist was or was not entitled to classify, the fact  remains that the question as to whether the above  produces are "diagnostic reagents" was not referred.

In this case we are concerned with classification of  diagnostic reagent for vivo detection of T.B. mycobacteria.   According to the Adjudicating Authority, these reagents  are of mycobacterium origin but they are injected  intradermally into the patient and, therefore, they are  classifiable under Chapter Heading 30.05 (CSH 3005.90).   According to the Department, the above three items are  put up by the assessee for sale in measured doses and,  therefore, they were classifiable under Chapter Heading  30.05.  In this connection, reliance is placed on Chapter  Note 3(d) to Chapter 30 which reads as under:

"CHAPTER 30 PHARMACEUTICAL PRODUCTS Notes:         1. to 2.        xxx             xxx             xxx 3. Heading No.30.05 applies only to the  following, which are to be classified in  that heading and in no other heading of  this Schedule: -

(a) to (c)      xxx             xxx             xxx

(e)     Opacifying preparations for X-ray  examinations and diagnostic  reagents designed to be  administered to the patient, being  unmixed products put up in  measured doses or products  consisting of two or more ingredients  which have been mixed together for  such uses;

(f)     to (h)  xxx             xxx             xxx         "  (emphasis supplied)

On reading Chapter Note 3(d) it is clear that  preparations for X-ray examinations and diagnostic  reagents designed to be administered to the patient, put  up in measured doses would fall under Chapter Heading  30.05.  However, in this case there is no finding given by  any of the Authorities below as to whether Item Nos.35,  36 and 37, quoted above, are diagnostic reagents.  This  question has got to be decided as the assessee contends  that the above three products are not diagnostic  reagents, they are "diagnostic aid".  In this connection,  reliance is placed on Pharmacopoeia of India (Third  Edition) by Ministry of Health and Family Welfare (GOI)  and also on The National Medical Series for  Independent Study (Microbiology - 2nd Edition) by Dr.  David T. Kingsbury and Gerald E. Wagner.

Since this question has not been answered we remit

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the matter to the Adjudicating Authority to decide  whether Item Nos.35, 36 and 37, quoted hereinabove, are  diagnostic reagents or whether they are in aid of  diagnosis.   

Now, coming to Item Nos.1 to 15 of Annexure B, we  quote hereinbelow the said items which read as under:

"ANNEXTURE - ’B’ Name of the products which will fall under chapter sub-heading 3822     ----------------------------------------------------------- Sr.  Code No.    Item                        Pkg. No. -----------------------------------------------------------

1.  17401A      Anti Sheep Hemolysin        5 ML 2.  19404       Chem. Control (Assayed)   5x3 ML 3.  19404A      Chem. Control (Unassayed) 5x3 ML 4.  17405       Fraund’s Adjuvant (Com)    10 ML 5.  17406       Guinea pig (Complement)   5x1 ML 6.  19408       Kahn VDRL + Va control      5 ML 7.  19409       Kahn VDRL - Va control      5 ML 8.  19444       Chem. Control Assayed                 Normal                    5x3 ML 9.  19444A      Chem. Control Assayed                 Abnormal                  5x3 ML 10. 25907       R.A. Test (Latax Test)     10 T 11. 25907A      R.A. Test (Latax Test)     20 T 12. 25934       C.R.P. (Latax Test)        20 T 13. 25947       ASO (Latax Test)           20 T 14. 25946B      Austragen (Latax Test)     25 T 15. 25946C      Austragen (Latax Test)     50 T  

-----------------------------------------------------     According to the assessee, the above 15 items fall  under Chapter Heading 30.02 as they are "blood  fractions".  This is not disputed by the Department.   However, according to the Department, since Item Nos.1  to 15 are manufactured by coating latex particles with  protein, they fall under Chapter Heading 38.22 of CETA.   However, according to the Tribunal, the said items fall  under Chapter Heading 30.05 of CETA.  At this stage we  may note that according to the Department, the said 15  items came under Chapter Heading 38.22 whereas,  according to the assessee, they came under Chapter  Heading 30.02.  The only question before the Tribunal  was whether it came under Chapter Heading 38.22 or  whether it came under Chapter Heading 30.02.  In M/s.  Mitra’s case (which we have decided hereinabove vide  C.A.No.5322 of 2002), we have taken the view that "blood  fractions" fall under Chapter Heading 30.02.  Chapter  Heading 30.02 refers to "blood fractions".  Merely  because the medium used is latex (rubber) or paper, will  not bring the items under Chapter Heading 38.22.  Once  an item is a "Blood Fraction" it falls under Chapter  Heading 30.02.  The medium is irrelevant.  The medium  could be paper or rubber.  The configuration of the  product and the function are important.  In our opinion,  Item Nos.1 to 15 are "Blood Fractions".  They are "Blood  Fractions" even according to the Department.   

In the circumstances, we classify Item Nos.1 to 15  of Annexure B to the paper book under Chapter Heading

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30.02 (CSH 3002.00).   Accordingly, except for Item Nos.35, 36 and 37 of  Annexure A, the assessee \026 M/s. Span Diagnostics Ltd.  succeeds in C.A. Nos.1076-1080 of 2002.  However, with  regard to Item Nos.35, 36 and 37 of Annexure A, the  matter shall stand remitted to the Adjudicating Authority  for fresh decision in accordance with law.  Consequently  the question of limitation will remain open only with  regard to Item Nos.35, 36 and 37 of Annexure A in C.A.  Nos.1076-1080 of 2002.

Accordingly, the above C.A. No.5322 of 2002, C.A.  Nos.1953-54 of 2003 and C.A. Nos.1076-1080 of 2002  stand disposed of with no order as to costs.