The CESTAT Chennai, in a recent ruling held that Lopinavir is a drug for which exemption under Notification No. 21/2002-Cus is available.
In the instant case, the appellant imported Zidovudine and claimed the benefit of Customs Notification No.21/2002-Cus. dt. 1.3.2002 under Sl.No.80(B). However, the Revenue alleged that appellants are not eligible for such concession rate of duty as they have not fulfilled the conditions set out in Sl.No.80(B) of the notification.
The question before the Tribunal was that whether Lopinavir an item exempted in terms of the Sl. No. 47(A) of the Notification No. 4/2006-C.E.
Before the Tribunal, Revenue contended that Lopinavir is bulk drug and cannot be treated as drug or medicines. The expression drug at Sl. No. 47(A) referred to finished pharmaceutical products or formulations whereas bulk drugs at Sl. No. 47(B) referred to bulk drugs which were used in the manufacture of drugs or medicines.
The bench agreed with the contentions of the assessee and held that the impugned item was cleared as bulk drug without following the procedure prescribed in the rules.
It noted that “the bulk drugs imported by the appellants were specifically mentioned in List 3 appended to Sl. No. 80(A) of Customs Notification No. 21/02 and are liable to be considered as drugs mentioned at 80(A). It is beyond doubt that bulk drugs are also drugs. They are so defined under the Drugs (Prices Control) Order, 1995 also. The imported goods, which are specified in List 3, must fall within the coverage of drugs specified in List 3 and consequently the benefit of Sl. No. 80(A) would be admissible to them in relation to BCD.”
“We find that there is no definition of bulk drugs in the Notification involved. As per the Drugs (Prices Control) Order, 1995, drugs also include bulk drugs. The item Lopinavir figures in List 3 of Notification No. 21/2002-Cus. Therefore we find that the impugned clearances of Lopinavir are entitled to exemption extended to goods at against Sl. No. 47(A). In terms of the Notification such clearances are entitled to exemption unconditionally.”
Read the full text of the Order below.
