1987 (7) TMI 343 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification 234/82-C.E. regarding exemption of C.V. Duty for imported Cholesterol BP.
2. Determination of whether Cholesterol qualifies as a bulk drug under the exemption Notification.
3. Evaluation of the evidence presented regarding the therapeutic properties of Cholesterol.
4. Consideration of the opinion of the Drug Controller in determining the eligibility of Cholesterol for duty exemption.

Analysis:
1. The appeal involved a dispute over the applicability of the exemption from C.V. Duty under Notification 234/82-C.E. for imported Cholesterol BP. The central question was whether Cholesterol should be considered a bulk drug falling under the exemption category specified in the notification.

2. The appellants argued that Cholesterol should be classified as a bulk drug due to its usage in medicinal formulations. They relied on a previous Tribunal order regarding a similar issue with citric acid monohydrate BP. However, the JDR for the department contended that Cholesterol did not meet the criteria of a drug as defined in the notification.

3. The department's representative pointed out that Cholesterol was primarily used as an emulsifying agent and in cosmetic products, indicating its non-therapeutic nature. The literature provided by the appellants highlighted Cholesterol's role in ointments and hair tonics, emphasizing its cosmetic applications rather than medicinal properties.

4. The Drug Controller's opinion was crucial in the assessment of Cholesterol's eligibility for duty exemption. While the Controller acknowledged Cholesterol's use in medicinal formulations, the absence of evidence supporting its therapeutic value raised doubts. The Controller's clarification emphasized the need for a substance to have diagnostic, treatment, or preventive properties to qualify as a bulk drug under the notification.

5. Ultimately, the Tribunal concluded that Cholesterol did not meet the criteria set out in Notification 234/82 for exemption from C.V. Duty. The decision was based on the lack of evidence demonstrating Cholesterol's role in disease diagnosis, treatment, or prevention, as required by the notification.

6. A separate order by another Member highlighted the conflicting evidence regarding Cholesterol's properties, including its anti-irritant and preventive aspects. The Member suggested a remand to the Collector (Appeals) for further investigation based on the evidence presented, especially considering the opinion of the Drug Controller.

7. In summary, the Tribunal dismissed the appeal, ruling that Cholesterol did not qualify as a bulk drug under the exemption notification due to its cosmetic and non-therapeutic applications. The differing opinions regarding Cholesterol's properties and usage necessitated a remand for a more thorough examination of the evidence before reaching a final decision.