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2002 (10) TMI 98 - SC - Central ExciseWhether citric acid manufactured by the respondents herein was covered by Notification No. 55/1975-C.E., dated 1st March, 1975, as amended by Notification No. 62/1978, dated 1st March, 1978? Held that - This civil appeal can be disposed of on a very short point. In this case, as already mentioned above, the Department did not deny that the citric acid manufactured by the respondents was a pharmacopoeial standard acid. The High Court also records, in paragraph 7 of the impugned judgment, that the Department did not challenge the finding of the Tribunal that the product was a drug, drug intermediate or pharmaceutical in nature. As this factual position is not disputed, it becomes clear that the citric acid manufactured by the respondents is entitled to the benefit of the Notifications. In such cases where the factual position is admitted, no question arises of ascertaining the end-use. We, therefore, dismiss this appeal on this short point.
Issues:
1. Interpretation of Notification No. 55/1975-C.E. and 62/1978 2. Eligibility for exemption under the Notifications 3. Consideration of end-use for exemption determination 4. Judicial interpretation of end-use requirement 5. Factual position of citric acid manufacturing Analysis: 1. The primary issue in this case was the interpretation of Notification No. 55/1975-C.E., as amended by Notification No. 62/1978, regarding the coverage of citric acid manufactured by the respondents. The dispute revolved around whether the citric acid fell within the purview of the said Notifications. 2. The respondents claimed the benefit of the Notifications and sought a refund of amounts paid, which was initially disallowed. The Tribunal, in its order, acknowledged that the citric acid manufactured by the respondents met pharmacopoeial standards but emphasized the need to establish the end-use for the manufacture of drugs to claim exemption under the Notification. 3. The Tribunal remitted the matter back for determining the quantity of citric acid used specifically for drug manufacture, indicating that exemption would only apply to the portion utilized for drugs. Subsequently, the respondents filed appeals in the Tribunal, Civil Appeal No. 901 of 1987, and a writ petition in the Bombay High Court. 4. The Bombay High Court, in its judgment, addressed the issue of end-use requirement for exemption under the Notifications. It referenced a Supreme Court judgment related to a similar matter but clarified that the Supreme Court did not establish a principle mandating end-use consideration for exemption determination. 5. Ultimately, the Supreme Court dismissed the appeal based on the undisputed factual position that the citric acid manufactured by the respondents met pharmacopoeial standards and was pharmaceutical in nature. The Court concluded that when the factual position is admitted, there is no need to ascertain the end-use for exemption eligibility, thereby granting the respondents the benefit of the Notifications. 6. The Supreme Court clarified that it did not delve into the broader question of whether end-use should be a factor in determining exemption for drug intermediates. It also refrained from expressing an opinion on the Bombay High Court's interpretation of the Supreme Court's previous judgment on the end-use requirement. 7. The Court made it clear that no costs were to be awarded in this matter. Additionally, another civil appeal was disposed of based on a previous order, indicating that no further action was necessary in that appeal.
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