1993 (10) TMI 183 - AT - Central Excise

Summary

Issues:
1. Eligibility for exemption under Notification No. 234/86.
2. Classification of Salicylic Acid Technical Grade under sub-heading 3003.20 prior to 13-5-1986.

Analysis:

Issue 1: Eligibility for exemption under Notification No. 234/86:
The appellants contended that the intermediate products, Salicylic Acid Technical Grade and Parahydroxy Benzoic Acid, produced in their factory for captive consumption should be exempt under Notification No. 234/86, despite not having the Drugs Controller's certificate. The tribunal held that the products did not qualify for exemption as they neither had the required certificate nor conformed to pharmacopoeial standards as mandated by the notification. Therefore, the tribunal ruled that the products were not eligible for the exemption.

Issue 2: Classification of Salicylic Acid Technical Grade under sub-heading 3003.20 prior to 13-5-1986:
The appellants argued that prior to the amendment of Note 2 of Chapter 30, Salicylic Acid Technical Grade should be classified under sub-heading 3003.20 as a 'medicament' due to its therapeutic uses, referring to the Merck Index. The tribunal analyzed the provisions and noted that the product could only be classified as a 'medicament' under sub-heading 3003.20 if it qualified as an 'unmixed product' suitable for therapeutic uses. The tribunal observed that the lower authorities did not adequately consider the classification and failed to assess any qualitative differences between the products meant for captive consumption and those sold in the market. Consequently, the tribunal found the lower authorities' decision lacking proper reasoning and directed a de novo adjudication by the Assistant Collector, emphasizing the need for a thorough examination and consideration of all relevant aspects.

In conclusion, the tribunal allowed the appeal by remanding the case for a fresh adjudication, highlighting the necessity for a comprehensive assessment and providing the appellants with an opportunity to present additional evidence in support of their case.