2003 (7) TMI 331 - AT - Central Excise

Summary

Issues: Classification under Central Excise Tariff Act, 1985; Benefit of Notification No. 29/88; Interpretation of "single ingredient formulation"; Validity of test reports; Applicability of previous judgments.

Classification under Central Excise Tariff Act, 1985:
The judgment revolves around the classification of a product called Terramycin injection 10 ml under Heading 3003.10 of the Central Excise Tariff Act, 1985. The dispute arises from the presence of Lidocaine in the product, which is used in a 2% concentration. The appellants claimed the benefit of Notification No. 29/88 for "single ingredient formulation."

Benefit of Notification No. 29/88 - "Single Ingredient Formulation":
The appellants sought the benefit of Notification No. 29/88, dated 1-3-1988, based on the ground of "single ingredient formulation." The issue was whether the product qualified as a single ingredient formulation despite the presence of Lidocaine, which was deemed to have therapeutic uses and therefore not considered therapeutically inert for the purpose of the notification.

Validity of Test Reports and Previous Judgments:
The judgment considered the validity of test reports conducted by the departmental chemical laboratories, which concluded that the product was not a single ingredient formulation due to the presence of Lidocaine. The decision referenced a previous judgment in the case of Collector of Central Excise v. Wander India Ltd., which discussed the eligibility of products containing Lidocaine for the benefit of a notification. The judgment emphasized that Lidocaine, even if having therapeutic value, could still be considered therapeutically inert if not used for therapeutic purposes in the specific formulation.

Analysis and Conclusion:
The Tribunal analyzed the contentions of both parties and referred to the Larger Bench decision in the Wander India Ltd. case to support the appellants' claim. It was found that the inclusion of Lidocaine in the product was permissible as a pharmaceutical necessity to render the injectable solution viable. The judgment highlighted that the presence of Lidocaine was essential for the formulation's purpose and did not interfere with the therapeutic activity of the single ingredient. Relying on technical literature and previous judicial interpretations, the Tribunal concluded that the appellants were eligible for the benefit of the notification.

Final Decision:
In light of the findings and legal precedents, the Tribunal set aside the lower authorities' order and allowed the appeal, ruling in favor of the appellants. The judgment emphasized the importance of understanding the specific context and purpose of ingredient inclusion in formulations when determining eligibility for statutory benefits.