2004 (3) TMI 533 - AT - Central Excise

Summary

Issues:
1. Classification of a product under a specific sub-heading of the Central Excise Tariff Act, 1985.
2. Eligibility for concessional rate of duty under Notification 8/96-C.E., dated 23-7-1996.
3. Interpretation of the definition of "bulk drugs" for the purpose of charging central excise duty.

Classification Issue:
The appeal was filed by the Revenue against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Hyderabad, regarding the classification of Amilodipine Besylate under a specific sub-heading of the Central Excise Tariff Act, 1985. The respondents claimed the product under a sub-heading, seeking a concessional rate of duty of 10% ad valorem under Notification 8/96-C.E., dated 23-7-1996. The Revenue contended that the product did not conform to any pharmacopoeial standards, leading to the denial of the concessional rate. However, it was acknowledged that the respondents were eligible for the concessional rate of duty.

Concessional Rate Eligibility Issue:
The respondents were denied the concessional rate of duty under Notification 8/96-C.E., dated 23-7-1996 due to the product not being listed in any pharmacopoeia. The Drug Control Authority had granted special permission for manufacturing the product, even though it did not conform to pharmacopoeial standards. The Assistant Commissioner of Central Excise Division-7, Hyderabad, issued show cause notices, denying the exemption claimed and requiring duty payment at a higher rate. The Commissioner (Appeals) later allowed the appeal, citing a clarification from the Ministry of Chemicals and Fertilizers that defined "bulk drugs" for central excise duty purposes. The Commissioner found that the product met the standards specified in the Drugs and Cosmetics Act, making it eligible for the concessional duty.

Interpretation of "Bulk Drugs" Issue:
The central issue revolved around the interpretation of "bulk drugs" under Notification 8/96-C.E., dated 23-7-1996, specifically whether products not listed in any pharmacopoeia were eligible for the concessional rate of duty. The Central Excise Authorities had been relying solely on pharmacopoeial standards, neglecting other standards specified in the Second Schedule to the Drugs and Cosmetics Act. The Tribunal noted that Amlodipine Besylate was listed in the British Pharmacopoeia Volume I and met the pharmacopoeial standards specified in the Act. Consequently, the Tribunal rejected the Revenue's appeal, emphasizing that products meeting the Act's standards were entitled to the concessional duty, regardless of pharmacopoeial listing.

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