2005 (3) TMI 207 - AT - Central Excise

Summary

Issues: Eligibility for Notification No. 8/96-C.E. for Roxythromycin and Nimesulide, invocation of extended period, penalty under Section 11AC

In this case, the appellant, a manufacturer of goods falling under Chapter 29, disputed the eligibility for Notification No. 8/96-C.E. for Roxythromycin and Nimesulide cleared during specific periods. The appellant argued that Roxythromycin should be considered eligible for exemption as it was included in the third edition of the European Pharmacopoeia published in June 1996. However, the Tribunal found no merit in this submission as Roxythromycin was not mentioned in the Second Edition of the European Pharmacopoeia, and the effective date of the third edition was 1-1-1997. Therefore, the concessional rate of duty was not available for Roxythromycin before this date. The Tribunal also noted that the appellant had not furnished a declaration for the relevant period, leading to the charge of suppression being upheld. Consequently, the demand for duty on Roxythromycin was upheld.

Regarding Nimesulide, the Tribunal found merit in the appellant's submission that the product specified in Martindale extra Pharmacopoeia was eligible for the concessional rate of duty during the relevant period. Citing a previous Tribunal decision, the Tribunal agreed that the said pharmacopoeia was official. The appellant had filed a declaration under Rule 173B covering the relevant period, supporting their entitlement to the exemption. Therefore, the demand for duty on Nimesulide was set aside.

In terms of the penalty under Section 11AC, the Tribunal acknowledged that the period in question fell within the scope of this section. However, considering the facts of the case, the Tribunal deemed that a 100% penalty was not warranted. As a result, the penalty was reduced to Rs. 3 lakhs. Additionally, the penalty imposed under Rule 173Q was set aside.

In conclusion, the appeal was partly allowed with the following outcomes: the demand for duty on Roxythromycin was upheld, the demand for duty on Nimesulide was set aside, the penalty under Section 11AC was reduced to Rs. 3 lakhs, and the penalties under Rule 173Q were set aside.