1986 (10) TMI 254 - AT - Central Excise

Summary

Issues:
- Eligibility of Dimethyl Sulphate for exemption under Notification 55/75-C.E., dated 1-3-1975 as a drug intermediate.

Detailed Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi involved the question of whether Dimethyl Sulphate manufactured by the respondents was eligible for exemption under Notification 55/75-C.E., dated 1-3-1975 as a drug intermediate. The Central Government had issued a notification exempting certain goods from excise duty, including "All drugs, medicines, pharmaceuticals and drug intermediates not elsewhere specified." The respondents claimed exemption for Dimethyl Sulphate as a drug intermediate. The Assistant Collector of Central Excise initially denied the exemption, stating that Dimethyl Sulphate was used as a methylating agent and did not qualify as a drug intermediate. However, the Collector of Central Excise (Appeals) ruled in favor of the respondents, allowing the exemption. This decision was challenged by the Collector of Central Excise, Bombay-II, leading to the appeal before the Tribunal.

During the appeal hearing, the appellant was represented by Shri S.R. Kunte, JDR, while the respondents were represented by Shri R.T. Bandodkar. The respondents submitted a certificate issued by the Drugs Controller and Food (Health) Authority, Government of Andhra Pradesh, stating that Dimethyl Sulphate was a drug intermediate for the manufacture of Analgin I.P. The Collector (Appeals) based the decision in favor of the respondents on the interpretation made by the Government of India in a previous case and a decision of the High Court of Judicature at Bombay. The High Court had held that it was not necessary for a product to be labeled as a drug or drug intermediate and further used as such to qualify for exemption under the notification. The Tribunal also referred to a previous decision where it was stated that the term "drug intermediate" should not be narrowly interpreted.

The appellant argued that Dimethyl Sulphate, being a methylating agent not found in the end-product, should not be considered a drug intermediate. However, considering the precedents cited, the Tribunal found the appellant's contention unacceptable and dismissed the appeal, upholding the eligibility of Dimethyl Sulphate for exemption as a drug intermediate under the notification.