1988 (8) TMI 316 - AT - Customs

Summary

Issues:
- Interpretation of Central Excise Notification No. 234/82 regarding exemption from additional duty of customs for consignments of Propylene Glycol USP imported by M/s. Gufic Private Ltd.
- Determination of whether Propylene Glycol USP qualifies as a bulk drug under the notification's definition.

Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi, involved a common issue regarding the eligibility of consignments of Propylene Glycol USP for exemption from additional duty of customs under Central Excise Notification No. 234/82. The Collector (Appeals) had conflicting findings in two separate appeals filed by M/s. Gufic Private Ltd., with one in favor of the importer and the other against them, leading to the appeals before the Tribunal. The main contention revolved around whether Propylene Glycol USP met the criteria of a bulk drug as per the notification's definition.

The Tribunal considered the definitions and standards provided in various pharmacopoeial literature to determine the nature and usage of Propylene Glycol USP. The Collector (Appeals) had based their decisions on the therapeutic value and prophylactic properties of the substance, with one finding against the importer due to a lack of such attributes. However, the Tribunal noted that the substance was used as a solvent, preservative, and humectant in pharmaceutical formulations, as supported by references from authoritative pharmaceutical texts.

The Tribunal analyzed the conditions set forth in the notification for a substance to be classified as a bulk drug, including conformity to pharmacopoeial standards, usage for disease diagnosis or treatment, and utilization in formulations. By referencing veterinary uses of Propylene Glycol in treating animals for specific conditions, the Tribunal concluded that the substance qualified as a bulk drug under the notification. Consequently, the Tribunal dismissed one appeal and allowed the other, granting relief to the importer based on the substance's usage and characteristics in pharmaceutical preparations.

In conclusion, the judgment clarified the interpretation of Central Excise Notification No. 234/82 in the context of Propylene Glycol USP imports, emphasizing the substance's role as a solvent in pharmaceutical formulations and its alignment with the definition of bulk drugs under the notification. The decision provided clarity on the eligibility of the importer for exemption from additional duty of customs based on the substance's pharmacological properties and usage in medical preparations.