1984 (11) TMI 210 - AT - Central Excise

Summary

Issues: Applicability of Exemption Notification No. 55/75-C.E. to Methyl Acetoacetate as a drug intermediate for the manufacture of Analgin I.P.

In the case before the Appellate Tribunal CEGAT, New Delhi, the issue involved in appeals No. 116/81-C and 1183/81-C was the applicability of Exemption Notification No. 55/75-C.E., dated 1-3-1975 to Methyl Acetoacetate as a drug intermediate for the manufacture of Analgin I.P. The Appellants imported consignments of Methyl Acetoacetate and claimed a refund of countervailing duty under the notification, which exempts "All drugs, medicines, pharmaceuticals and drug intermediates not elsewhere specified" from payment of Central Excise Duty. The Assistant Collector and the Appellate Collector rejected the claim on the ground that Methyl Acetoacetate did not find exclusive use as a drug intermediate. The Appellants then filed Revision Applications before the Government of India, which were transferred to the Tribunal as Appeals.

The Appellants argued that Methyl Acetoacetate is used as a drug intermediate for the manufacture of Analgin I.P., supported by certificates from the Joint State Drugs Controller. They referred to a Government of India Order where a similar exemption was granted for Methyl Acetoacetate. The Departmental Representative reiterated the grounds for rejecting the refund claim.

The Tribunal considered the applicability of the notification and observed that Methyl Acetoacetate, despite having other uses, is used by the Appellants for the manufacture of Analgin I.P. The Tribunal agreed with the Government of India's view that a chemical can be considered a drug intermediate when actually used in drug manufacturing, even if it has other uses. Therefore, the Tribunal held that Methyl Acetoacetate qualifies as a drug intermediate under the notification, and the benefit of the exemption should be extended to the extent it is used for the manufacture of Analgin I.P. The Appeals were accepted in favor of the Appellants.

In conclusion, the Tribunal determined the applicability of Exemption Notification No. 55/75-C.E. to Methyl Acetoacetate as a drug intermediate for the manufacture of Analgin I.P., holding that the imported goods qualified for the exemption based on their use in drug manufacturing, despite having other potential uses.