1985 (1) TMI 213 - AT - Central Excise

Summary

Issues:
- Appeal against the order of the Collector of Central Excise (Appeals), Bombay
- Classification of potassium carbonate as a drug intermediate for exemption under Notification 62/78-C.E.

Analysis:

Issue 1: Appeal against the order of the Collector of Central Excise (Appeals), Bombay
The appeal before the Appellate Tribunal CEGAT, New Delhi was filed by the Department against the order of the Collector of Central Excise (Appeals), Bombay, dated 16-6-1982, where two appeals of the respondents were allowed. The dispute arose when a show cause notice was issued revoking the classification of potassium carbonate as a drug intermediate for exemption under Notification 62/78-C.E. The Asstt. Collector initially approved the classification list but later revoked it, leading to a demand notice issued to the respondents. The appellate authority, following a previous decision, held that as long as a product was used in the manufacture of drugs as a drug intermediate, the benefit of the exemption notification could not be denied.

Issue 2: Classification of potassium carbonate as a drug intermediate for exemption under Notification 62/78-C.E.
The main contention revolved around whether potassium carbonate could be classified as a drug intermediate for the purpose of claiming exemption under Notification 62/78-C.E. The Department argued that potassium carbonate, although used in the manufacture of some drugs, was not an active material regulating in the formulation of drugs and, therefore, could not be considered a drug intermediate. However, the respondents presented technical opinions and certificates from authorities supporting the classification of potassium carbonate as a drug intermediate, used in the manufacture of specific drugs. The Tribunal emphasized that a chemical could be regarded as a drug intermediate only when it was actually used in the manufacture of drugs, even if it had other applications. The Tribunal ultimately held that potassium carbonate was indeed a drug intermediate and that the respondents were entitled to the exemption notification.

Conclusion:
The Appellate Tribunal, after thorough analysis, dismissed the appeal by the Department against the order of the Collector of Central Excise (Appeals), Bombay. The Tribunal upheld the classification of potassium carbonate as a drug intermediate for exemption under Notification 62/78-C.E., based on the technical opinions and certificates provided by the respondents. The Tribunal's decision was based on the understanding that a chemical could qualify as a drug intermediate if it was actually used in the manufacture of drugs, regardless of its other applications.