2013 (5) TMI 320 - AT - Central Excise

Whether dextrose present in Aneroid IV was pharmaceutical necessity and whether that was active and not interfering with the process to manufacture of final goods? - Exemption Notification No.116/69 dated 3.5.1969. - Held that - the ld. Commissioner (Appeals) had not gone through the apex court s judgment cited by ld. DR in T.N.Dadha he case of Pharmaceuticals vs. CCE, Madras- 2003 (2) TMI 64 . - There is no material evidence on record to notice that dextrose present in Aneroid IV was of pharmaceutical necessity and a therapeutic inert without interfering with the therapeutic or prophylactic activity. In view of aforesaid observations and no evidence brought to record by the respondent - Decided in favor of revenue.

Summary

Issues involved:
1. Interpretation of whether dextrose in Aneroid IV was a pharmaceutical necessity and if it interfered with the manufacturing process of final goods.

Analysis:
The appellate tribunal was considering the appeal by the Revenue against an appellate order from 27.10.2004. The main issue was whether the dextrose present in Aneroid IV was a pharmaceutical necessity and if it interfered with the process to manufacture final goods. In the previous round of litigation, the Tribunal had directed a re-adjudication based on a previous decision. It was found that dextrose was present in the product as a pharmaceutical necessity, but there was no clear evidence on whether it interfered with the therapeutic activity of Metronidazole. The Commissioner (Appeals) later held that dextrose did not interfere with the therapeutic activity of the specified ingredient, thus entitling the respondent to exemption under the notification.

Upon further appeal by the Revenue, the argument was made that dextrose interfered with the therapeutic property, citing a Supreme Court judgment. The Apex Court's judgment highlighted that for an ingredient not specified in the schedule to qualify for exemption, it must be a pharmaceutical necessity and therapeutically inert, not interfering with the therapeutic activity of specified ingredients. The Tribunal observed that the Commissioner (Appeals) did not consider the Apex Court's judgment, and there was a lack of evidence to prove dextrose met the necessary criteria for exemption.

Ultimately, the Tribunal found that there was no material evidence to support that dextrose in Aneroid IV was a pharmaceutical necessity and therapeutically inert without interfering with therapeutic activity. As a result, the Revenue's appeal was allowed, as the respondent did not fulfill the required conditions for exemption under the notification based on the strict interpretation provided by the Apex Court.

In conclusion, the Tribunal ruled in favor of the Revenue, as the respondent failed to provide evidence demonstrating that dextrose met the necessary criteria for exemption under the notification. The decision was based on the strict conditions outlined by the Apex Court regarding pharmaceutical necessities and their interference with therapeutic activities.