1993 (7) TMI 194 - AT - Central Excise

Summary

Issues: Interpretation of exemption notification regarding the use of miconazole nitrate in medicinal products.

Detailed Analysis:

1. Exemption Claim and Disallowance:
The appellants manufacture Medicinal Products using Miconazole Nitrate as an active ingredient. They claimed exemption under Notification No. 122/86. The Assistant Collector disallowed the exemption, stating that the products contained miconazole in its original form, not miconazole nitrate. The Collector observed that life-saving formulations contain miconazole as the active ingredient, not miconazole nitrate. The dispute arose due to the wording of the exemption notification specifying miconazole, not miconazole nitrate.

2. Additional Evidence and Amendment of Notification:
The appellants sought to introduce an affidavit stating that in India, miconazole is invariably used in the salt form miconazole nitrate for external fungal infections. They argued that Notification No. 455/86 amended the original notification to substitute miconazole with miconazole nitrate, clarifying the intention to grant exemption from the inception of the original notification. They referenced a similar case where the Tribunal ruled in favor of the party based on the clarificatory nature of an amendment.

3. Revenue's Argument and Legal Precedent:
The Revenue contended that miconazole nitrate is distinct from miconazole and that exemption only applies to miconazole as per the notification. They emphasized strict interpretation of exemption notifications, citing a Supreme Court decision that statutes should be construed based on the words used. They argued against considering the intention behind the notification.

4. Tribunal's Decision and Interpretation:
The Tribunal considered the arguments and evidence presented. They noted that miconazole in its base form was not used by manufacturers in India, leading to the amendment substituting miconazole with miconazole nitrate. The Tribunal found the amended notification clarificatory in nature, intending to grant exemption from the inception of the original notification. Consequently, the appellants were deemed justified in claiming exemption under Notification No. 122/86 since its inception, and the appeal was allowed without delving into other issues raised.

In conclusion, the Tribunal's decision favored the appellants, recognizing the substitution of miconazole with miconazole nitrate in the exemption notification and interpreting the amendment as clarificatory to grant exemption from the notification's inception.