2018 (3) TMI 399 - AT - Central Excise

Benefit of N/N. 4/2006 dated 01.03.2006 vide Sr. No.47 - The department s case is that as per Sr. No.47 of 4/2006 and list 3 of Sr. No.58 the product covered under exemption is Natural Micronised Progesterone tablet whereas the appellants product consist of various ingredients the product is not alone Natural Micronised Progesterone accordingly exemption is not available - Held that - as per the exemption entry the drug and medicine both are exempted. Drug contains only one ingredient i.e. basic drug whereas any medicine which is manufactured out of a drug is invariably consist of other ingredients which is not in the form of excipient. Merely by adding the excipient the medicine which has character of basic drug does not get altered. Therefore only by adding excipient the exemption cannot be denied. From the packing of the product it can be seen that the product sold is Natural Micronised Progesterone. Therefore even though it contains various other excipients the medicine is clearly covered under Sr. No.58 of the list 3 of N/N. 21/2002-Cus. Therefore it is eligible for exemption N/N. 4/2006-CE. Appeal dismissed - decided against Revenue.

Summary

Issues:
Claim of exemption under notification no. 4/2006 for Natural Micronised Progesterone tablet containing multiple ingredients.

Analysis:
The case involved a dispute regarding the eligibility of the appellant's product for exemption under notification no. 4/2006 for Natural Micronised Progesterone. The department contended that the product did not qualify for exemption as it consisted of various ingredients in addition to Natural Micronised Progesterone. The revenue's representative argued that the product did not align with the specific requirements listed in the exemption notification. On the other hand, the respondent's counsel supported the impugned order granting exemption to the product.

Upon careful consideration, the Tribunal observed that the exemption covered both drugs and medicines, with drugs typically containing a single basic ingredient. Medicines, however, often included additional components such as excipients. The Tribunal emphasized that the addition of excipients did not alter the essential character of a medicine derived from a basic drug. In this case, the product was marketed as "Sugest" and, upon examination, was found to be Natural Micronised Progesterone despite the presence of other excipients.

The Tribunal noted that the product's packaging clearly indicated it was Natural Micronised Progesterone, making it eligible for exemption under Sr. No. 58 of the relevant notification. Referring to the order of the Commissioner (Appeals), the Tribunal highlighted the importance of interpreting government policy broadly to achieve its intended purpose. The Tribunal agreed with the Commissioner's findings, which emphasized the long-standing presence of the product in the market and criticized the lower authority's misconceptions and arbitrary penalty imposition without proper justification.

Ultimately, the Tribunal upheld the impugned order and dismissed the revenue's appeal, affirming the eligibility of the appellant's product for exemption under notification no. 4/2006 for Natural Micronised Progesterone. The judgment was pronounced in court on 31/1/18.