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Issues:
1. Interpretation of Notification No. 234/86-C.E., dated 3-4-1986 regarding exemption of countervailing duty on imported goods categorized as 'bulk drugs'. 2. Validity of the certificate issued by the Drug Controller to the Government of India for claiming exemption under the said Notification. 3. Requirement of goods to conform to pharmacopoeial standards for availing the exemption under the Notification. Analysis: Issue 1: Interpretation of Notification No. 234/86-C.E., dated 3-4-1986 The case involved the import of Tartaric Acid by the appellants, who claimed exemption from countervailing duty under Notification No. 234/86-C.E. The dispute arose as the authorities did not accept the certificate issued by the Drug Controller, which certified the goods as 'bulk drugs' eligible for exemption. The appellants relied on the Explanation in the Notification defining 'bulk drugs' and argued that the certificate fulfilled the conditions of the Notification. The Tribunal analyzed the conditions of the Notification and emphasized the requirement of a certificate from the Drug Controller, which was duly produced by the appellants. The Tribunal held that the Drug Controller's certification was sufficient to establish the goods as 'bulk drugs' under the Notification, dismissing the authorities' objections. Issue 2: Validity of the certificate for exemption The lower authorities had rejected the certificate issued by the Drug Controller on the grounds that it was not specific to the imported goods and was issued before the actual import. However, the Tribunal disagreed with this reasoning, stating that the certificate need not be in a specific form and that the Drug Controller had satisfied himself regarding the goods' eligibility for exemption. The Tribunal emphasized that the Customs authorities should not question the certificate's validity based on the timing of issuance or minor discrepancies, as long as the essential requirements of the Notification were met. Issue 3: Compliance with pharmacopoeial standards During the proceedings, the Revenue argued that the goods must conform to pharmacopoeial standards to qualify for exemption under the Notification. However, the Tribunal rejected this argument, stating that the Notification's language did not mandate such conformity. Citing a Bombay High Court judgment, the Tribunal clarified that the absence of specific pharmacopoeial standards on the goods did not disqualify them from being classified as 'bulk drugs' under the Notification. The Tribunal upheld the appellants' claim for exemption based on the certificate issued by the Drug Controller, ruling in their favor and granting consequential relief. In conclusion, the Tribunal's decision favored the appellants, emphasizing the importance of the Drug Controller's certificate for claiming exemption under Notification No. 234/86-C.E. The Tribunal clarified that minor discrepancies in the certificate or the absence of explicit pharmacopoeial standards on the goods did not invalidate the claim for exemption.
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