2010 (1) TMI 1068 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 10/97-C.E. regarding exemption for Bio-technology products like Enzymes supplied to research institutions.

Analysis:
The case involved a dispute regarding the clearance of Enzymes falling under Chapters 29, 30, 35 of the Central Excise Tariff Act, 1985 by the appellant to research institutions at a 'nil' rate of duty under Notification No. 10/97-C.E. The lower authorities issued a show cause notice alleging non-compliance with the notification's provisions. The adjudicating authority initially ruled in favor of the appellant, but the Revenue appealed to the ld. Commissioner (Appeals), who overturned the decision. The appellant contended that the Enzymes were cleared with exemption certificates from research institutions and should be considered consumables under the notification. The Revenue argued that the consumables should be used along with scientific and technical instruments, interpreting 'and' as 'or'.

Upon review, the Tribunal found that the Enzymes were cleared to research institutions with excise duty exemption certificates, and the certificates clearly indicated the Enzymes were purchased as consumables. The Tribunal analyzed the technical details of the Enzymes, their usage in DNA and RNA research, and concluded that they were consumed during research activities. Referring to the Notification No. 10/97-C.E., the Tribunal highlighted the conditions for exemption and emphasized that the Enzymes supplied by the appellant met the criteria as consumables used in scientific instruments for research purposes.

The Tribunal cited precedents where goods supplied for research purposes were granted exemption under similar circumstances. Relying on the technical literature provided and the compliance with the notification's conditions, the Tribunal held that the Enzymes supplied to research institutions qualified as consumables used in scientific and technical instruments. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.

In conclusion, the judgment clarified the interpretation of Notification No. 10/97-C.E. regarding the exemption of Enzymes supplied to research institutions as consumables for scientific research, emphasizing compliance with the notification's conditions and technical usage in research activities.