2015 (11) TMI 810 - SC - Central Excise

Benefit of excise duty under Notification No.8 /95 dated 9.2.95 - Subject product is combination of streptomycin and penicillin - held that - even if one of the bulk drugs mentioned at serial no.1 is included in the formulation that would satisfy the definition of formulations contained at serial no.2 - As per the definition of Formulation , even if the formulation is processed out of or containing one bulk product the condition of Notification stands satisfied. We, therefore, do not find any error in the order passed by the Tribunal. - Decided in favour of assessee.

Summary

Issues:
Interpretation of Notification No.8/95 for concessional excise duty on Strepto Pencillin Injection.

Analysis:
The respondent assessee, a manufacturer of medicines, claimed excise duty benefits under Notification No.8/95 for its product 'Strepto Pencillin Injection.' The issue arose when show cause notices were issued, alleging that the product did not qualify for the concessional rate as it was a combination of streptomycin and penicillin. The contention was that both streptomycin and penicillin needed to be included in the formulation to avail the benefit. The Department argued that since penicillin was not explicitly mentioned in the table of the Notification, the product did not meet the criteria. However, the assessee argued that inclusion of either bulk drug mentioned in the table sufficed as per the definition of 'formulations' provided in the Notification.

The crux of the matter lay in the interpretation of the term 'formulations' as defined in the Notification. The definition encompassed medicaments processed from one or more bulk drugs, with or without pharmaceutical aids, for therapeutic use in humans or animals. The Tribunal upheld the assessee's interpretation, stating that even if the formulation contained one bulk drug specified in the table, it satisfied the conditions of the Notification. The Tribunal's decision was based on the understanding that the formulation need not necessarily include all bulk drugs listed in the table for the concessional rate to apply.

In conclusion, the Supreme Court affirmed the Tribunal's decision, emphasizing that the assessee's argument aligned with the definition of 'formulations' provided in the Notification. The Court found no error in the Tribunal's order, stating that the inclusion of one bulk drug in the formulation met the requirements for availing the concessional rate of excise duty. The judgment clarified the application of Notification No.8/95 in cases where formulations contained one of the bulk drugs specified, thereby providing clarity on the eligibility criteria for excise duty benefits in such scenarios.