1985 (3) TMI 254 - AT - Central Excise

Summary

Issues: Duty exemption eligibility of sodium bisulphite as a drug intermediate under Central Excise Tariff Schedule.

In the case before the Appellate Tribunal CEGAT New Delhi, the appellants, manufacturers of sodium bisulphite, claimed duty exemption as a drug intermediate under Notification No. 55/75 and 62/78 of the Central Excise Tariff Schedule for the manufacture of the pain-relieving drug 'analgin.' The Collector of Central Excise (Appeals) rejected the claim, stating that sodium bisulphite was predominantly used for purposes other than drug manufacture and did not seem to be a drug intermediate when used for that purpose. The appellants then filed a revision application to the Central Government, which was transferred to the Tribunal for consideration as an appeal. The appellants argued that sodium bisulphite should be considered a drug intermediate based on chemical reactions and certificates from Drug Control authorities. The Departmental Representative opposed the appeals.

Upon review, the Tribunal analyzed the chemical reactions involved in the manufacture of analgin and found that sodium bisulphite contributed substantially to the structure of the drug, rather than merely aiding chemical reactions. Certificates from Drug Control authorities in Gujarat and Tamil Nadu supported the use of sodium bisulphite as a drug intermediate. The 'Merck Index' listed medicinal uses of sodium bisulphite, further confirming its role in drug manufacturing. Despite the Respondent's argument that sodium bisulphite was used indirectly in the process, the Tribunal noted the indirect pathway through 'melubrin' to analgin, both of which had medicinal properties. Consequently, the Tribunal concluded that sodium bisulphite qualified for duty exemption as a drug intermediate under the relevant notifications.

As a result, the appeals were allowed, and the Assistant Collector was directed to provide consequential relief to the appellants upon verifying the actual use of sodium bisulphite in the drug manufacturing process.