2008 (5) TMI 511 - AT - Central Excise

Summary

Issues: Stay application for waiver of pre-deposit of duty and penalty under Notification No. 4/2006-C.E. for drugs falling under List 3 of Notification No. 21/2002-Cus.

Analysis:
1. The appellants sought a waiver of pre-deposit of duty amount and penalty under Notification No. 4/2006-C.E. for drugs listed in List 3 of Notification No. 21/2002-Cus. The Department contended that the drugs fell under a specific category requiring compliance with certain conditions, which the appellants allegedly did not follow, leading to their ineligibility for the benefit of the Notification.

2. The appellant argued that the drugs, Nevirapine and Stavudine, were cleared to another company for formulation manufacturing, resulting in no revenue loss. The appellant relied on precedents like M/s. Burroughs Wellcome (I) Ltd. v. CCE and Cipla Ltd. v. CC, Chennai, to support their claim that the imported bulk drugs should be considered as "drugs" under the relevant Notification.

3. The Department defended its position, emphasizing the distinction between medicines and bulk drugs under the Notification. The Department maintained that the appellants, by not adhering to the Notification's terms, were not entitled to the benefit, as upheld by the Commissioner (Appeals).

4. After considering the arguments, the Tribunal found that the items manufactured by the appellants were specifically listed in List 3 of the Notification. The Tribunal noted that the goods were cleared to another company and could not be denied as drugs. Consequently, the Tribunal allowed the stay application, granting a waiver of pre-deposit and staying the recovery of the amount until the appeal's disposal. The appeal was scheduled for an expedited hearing due to the substantial revenue involved.