2004 (8) TMI 161 - AT - Central Excise

Summary

Issues:
Manufacture and clearance of branded and generic medicament injections under different headings; Duty payment on branded and generic injections; Classification and clearance of a bulk drug D-21; Applicability of Notification 10/96-C.E. on captive consumption of D-21; Reversal of 8% under Rule 57CC for generic injections; Recovery of duty at different stages; Appeal against the demand of duty amount.

Analysis:
The appellants, a manufacturer of medicament injections, produced Dexamethasone Sodium Phosphate Injection (DSP Injection) under brand names Decadron Phosphate Injection and Deddan Branded Injection, paying duty under Heading 3003.10. They also manufactured the same drug without brand names, cleared at nil duty under Heading 3003.20. Common inputs were used for both branded and generic injections, with Modvat credit availed without separate accounts. The assessee reversed 8% value of generic injections under Rule 57CC, while branded injections were cleared at the appropriate duty rate.

During production, a bulk drug D-21 emerged, classified under Heading 29.36, used in manufacturing both branded and generic injections. A notice was issued demanding duty on D-21 cleared for captive consumption in DSP injections cleared under generic name, for the period between 24-4-1997 to 9-2-1998. The Commissioner (Appeals) acknowledged the benefit of Notification 10/96-C.E. for captively consumed D-21 but denied it due to non-claim in the classification list, a decision not upheld as the eligibility of the notification was not disputed.

The Tribunal ruled that duty cannot be charged on D-21 used in preparing branded goods, as appropriate duty was paid on them. However, for D-21 used in exempted goods like unbranded generic injections, 8% reversal under Rule 57CC was justified. Recoveries under Rule 57CC cannot be made at both D-21 and generic injection stages. The appeal was allowed, setting aside the demand for duty amounting to Rs. 59,46,161/-, as the reversals on generic medicine were deemed sufficient, rejecting the recovery at D-21 stage.