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2009 (8) TMI 580 - AT - Central ExciseDrugs, bulk drugs- the appellants had manufactured and cleared the following bulk drugs availing exemption under Notification No. 6/2002-C.E. dated 1-3-2002 (as amended up to 28-2-2006) and under subsequent Notification No. 4/2006-C.E. dated 1-3-2006. The dispute involved in this case relates to interpretation of the following entry at Serial No. 252 of Table to Notification No. 6/2002-C.E. dated 1-3-2002. In the light of the various decisions, held that- These case law had dealt with the scope of Entry serial No. 47(A) & (B) of Notification No. 4/2006-C.E., dated 1-3-2006 and had decided that drugs figuring Serial No. 47(A) included bulk drugs. In the circumstances, the Impugned order is set aside as not sustainable. The appeal is allowed.
Issues involved:
Interpretation of entry at Serial No. 252 of Table to Notification No. 6/2002-C.E. and subsequent Notification No. 4/2006-C.E. Analysis: The appeal filed by M/s. Dr. Reddy's Laboratories Ltd. challenges the demand of Rs. 26,63,654 under Section 11A of the Central Excise Act, 1944, applicable interest for delay in payment of service tax under Section 11AB of the Act, and an equal amount of penalty imposed on the appellants under Rule 25 of Central Excise Rules, 2002. The dispute revolves around the interpretation of the entry at Serial No. 252 of the Table to Notification No. 6/2002-C.E. The appellants had manufactured and cleared various bulk drugs availing exemption under the said notification and subsequent Notification No. 4/2006-C.E. The appellants argued that the bulk drugs involved were eligible for exemption under a different serial number that did not require following the Central Excise Rules, 2001. The demand of duty, interest, and penalty was based on the appellants not following the Central Excise Rules, 2001. The dispute in this case primarily concerns the interpretation of the entry at Serial No. 252 of the Table to Notification No. 6/2002-C.E. and its replacement in Notification No. 4/2006-C.E. The entry pertains to drugs or medicines and bulk drugs used in their manufacture. The Tribunal examined whether the medicines cleared by the appellants were eligible for exemption under the said entry. It was established that the drugs involved were listed in Customs Notification No. 21/2002-Cus., and as per the Drugs (Price Controller) Order, 1995, the definition of drug includes bulk drugs. Therefore, the subject clearances of medicines were deemed eligible for exemption under the relevant serial number that allows exemption unconditionally. The Tribunal also relied on previous decisions that supported this interpretation, emphasizing that drugs including bulk drugs were covered under the exemption. The Tribunal referred to previous decisions such as Astrix Laboratories Ltd. v. CCE & C, Hyderabad-I and M/s. Aurobindo Pharma Ltd. v. CCE, Hyderabad, which had addressed similar issues and concluded that drugs including bulk drugs were eligible for exemption. Based on the interpretation of the relevant entry and the precedents cited, the Tribunal set aside the impugned order as unsustainable and allowed the appeal. The operative portion of the order was pronounced on 26-8-2009 after the conclusion of the hearing.
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