1991 (3) TMI 261 - AT - Central Excise

Summary

Issues:
1. Eligibility for Central Excise Notification benefit for Solvent Ether conforming to Indian Pharmacopial (IP) Standards.
2. Sustainability of duty demand based on limitation.

Analysis:

Issue 1:
The primary issue in this case is whether Solvent Ether manufactured by the appellants, conforming to Indian Pharmacopial (IP) Standards, is eligible for the benefit of Central Excise Notification No. 104/82 as amended by Notification No. 197/82. The lower authorities initially held that the Solvent Ether would not qualify for this benefit. The key contention revolved around whether the Solvent Ether could be categorized as a bulk drug falling under the exemption provided by the notifications. The definition of "bulk drugs" under the notifications encompassed substances conforming to Pharmacopoeial standards and used for the diagnosis, treatment, mitigation, or prevention of diseases in humans or animals. The Solvent Ether in question met the standards and was certified to fall under the category of "Drugs & Medicines." The appellate tribunal analyzed the usage of Solvent Ether in the manufacture of anaesthetic ether, which is utilized to desensitize body parts during surgical procedures. The tribunal concluded that the Solvent Ether was indeed eligible for duty exemption under the notifications, as it played a crucial role in the treatment of diseases through surgical procedures.

Issue 2:
The secondary issue related to the sustainability of the duty demand raised against the appellants based on the grounds of limitation. However, given the tribunal's determination on the primary issue regarding the eligibility of Solvent Ether for duty exemption, the question of limitation became moot and did not require further consideration. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellants, granting them consequential relief.

In conclusion, the appellate tribunal ruled in favor of the appellants, holding that the Solvent Ether conforming to Indian Pharmacopial (IP) Standards was indeed eligible for duty exemption under the Central Excise Notifications. The tribunal's decision rendered the issue of limitation irrelevant, leading to the appeal being allowed with consequential relief granted to the appellants.