1993 (1) TMI 105 - HC - Central Excise

Summary

Issues:
Challenge to orders passed by Assistant Collector and Collector of Central Excise regarding eligibility for concessional rate of duty under Notification No. 116/69 for "Amezole Tablet."

Analysis:
The judgment involves a challenge by the Petitioners, Rallis India Limited and another, against orders passed by the Assistant Collector of Central Excise and the Collector of Central Excise (Appeals) regarding the eligibility of "Amezole Tablet" for a concessional rate of duty under Notification No. 116/69. The notification exempts patent or proprietary medicines containing specified ingredients from excise duty. The composition of Amezole tablets includes Metronidazole I.P., Calcium Carbonate I.P., Magnesium Carbonate, and other ingredients. The dispute revolves around whether the presence of Calcium Carbonate and Magnesium Carbonate affects the eligibility for the concessional rate of duty under the notification.

The Petitioners argue that Metronidazole is the only active ingredient with therapeutic effects in Amezole tablets, while Calcium Carbonate and Magnesium Carbonate act as diluents and are therapeutically inert. They contend that the tablet should qualify for the concessional rate. The Respondents, on the other hand, argue that the mere presence of Calcium Carbonate and Magnesium Carbonate, regardless of their quantity or antacid properties, disqualifies the tablet from the notification's benefits.

The judgment references a previous case involving Flagyl tablets, where a similar issue was addressed. In that case, it was held that the pharmaceutical necessities in a medicine must be therapeutically inert and not interfere with the therapeutic activity of the specified ingredients. The court in the current case notes that there is no evidence to suggest that Calcium Carbonate or Magnesium Carbonate in Amezole tablets have antacid effects, and certificates support their use as excipients rather than active ingredients.

The court rejects the argument that differences in formulation between Flagyl and Amezole tablets should alter the application of the previous decision. It also dismisses the suggestion that the Petitioners should have pursued alternate statutory remedies instead of filing the petition. Ultimately, the court rules in favor of the Petitioners, holding that Amezole tablets are exempted under the notification, and cancels the bank guarantee and bond furnished earlier.