1996 (9) TMI 228 - AT - Central Excise

Summary

Issues: Classification of bulk drugs under Central Excises Tariff Act, 1985, eligibility for benefit of Notification No. 234/86, requirement of certificate from Drugs Controller for exemption under the notification.

The judgment by the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the classification of bulk drugs under the Central Excises Tariff Act, 1985 and the eligibility for the benefit of Notification No. 234/86. The respondents, who manufacture various bulk drugs including Tinidazole, had claimed the benefit of the notification for Tinidazole under Sl. No. 21. The Assistant Collector of Central Excise approved the classification under Heading 29.13 but denied the benefit of the Notification, stating that Tinidazole did not conform to pharmacopoeial standards and the certificate from the Deputy Drugs Controller was not acceptable as a substitute for the certificate from the Drugs Controller as required by the Notification.

The lower Appellate authority accepted the contention of the respondents, noting that Tinidazole is mentioned in Martindale Extra Pharmacopoeia and accepted the certificate produced by them, thereby extending the benefit of the Notification. The Revenue filed appeals against this decision, challenging the order of the Collector of Central Excise (Appeals) and the refund claims sanctioned by the Collector.

The Tribunal, after hearing both parties, examined the letter submitted by the respondents to the Drugs Controller of India requesting a certificate for their bulk drugs as per the Notification requirements. The certificate issued by the Deputy Drugs Controller confirmed the eligibility of the respondents' bulk drugs, including Tinidazole, for exemption under Notification No. 234/86. The Tribunal agreed with the lower Appellate authority that once the Competent Authority certifies a drug as a bulk drug within the meaning of the Notification, and it is used for diagnosis or treatment of diseases, it qualifies for the exemption. Tinidazole's mention in pharmacopoeias further supported its classification as a bulk drug under the Notification.

In a separate order by another Member of the Tribunal, it was noted that the Revenue raised a point regarding the certificate being signed by the Deputy Drugs Controller instead of the Drugs Controller as required by the Notification. However, it was clarified that when the term "Drugs Controller" is used, it should be construed to include the office of the Drugs Controller. The Member referred to a previous judgment where a similar issue was addressed, emphasizing that the outcome of the appeal should not hinge on this minor technicality.

Overall, the Tribunal upheld the decision to extend the benefit of Notification No. 234/86 to the respondents, emphasizing the importance of the Competent Authority's certification and the drug's usage for exemption eligibility, while also clarifying the interpretation of the term "Drugs Controller" in the context of the Notification requirements.