1997 (7) TMI 231 - AT - Central Excise

Issues:
1. Interpretation of Notification No. 245/83 regarding duty exemption for Patent and Proprietary Medicines.
2. Applicability of the duty exemption to goods cleared for export.
3. Claim for rebate on duty paid for goods exported.

Analysis:

Issue 1: Interpretation of Notification No. 245/83
The appellant, engaged in manufacturing Patent and Proprietary Medicines falling under T.I. 14E, was exporting a portion of the goods while clearing the rest for home consumption under the benefit of exemption Notification No. 245/83. The dispute arose when the appellant claimed a 15% discount on the retail price only for medicines cleared for home consumption, not for export. The show cause notice alleged duty evasion and suppression of facts. The Notification required exemption claim for all medicines cleared by the manufacturer with retail prices specified in the price list under Drugs (Prices Control) Order, 1979. The appellant contended that if the duty demand was confirmed, a rebate equal to the duty should be granted for the exported goods. The lower authorities confirmed the demand but allowed the rebate claim.

Issue 2: Applicability of Duty Exemption to Exported Goods
The main contention was whether the duty exemption under Notification No. 245/83 applied only to goods cleared for home consumption or also to goods cleared for export. The appellant argued that the exemption should cover all varieties of medicines cleared by the manufacturer, as long as the retail price was specified in the price list, without any exclusion for exported goods. The Tribunal agreed, emphasizing that the language of the Notification did not exclude goods cleared for export. The proviso (iii) mandated that the manufacturer claim exemption for all medicines with retail prices specified in the list, without the option to selectively apply the exemption. As all varieties cleared by the appellant were covered by the price list, the appellant was entitled to the exemption for goods cleared for export.

Issue 3: Claim for Rebate on Exported Goods
The Tribunal, based on the interpretation of the Notification, set aside the lower authorities' decision and allowed the appeal. The appellant's entitlement to the duty exemption for medicines cleared for export was upheld. The Tribunal's decision highlighted the mandatory nature of claiming exemption for all medicines covered by the price list and rejected the argument that the duty exemption did not extend to goods cleared for export. Therefore, the appellant's claim for rebate on duty paid for exported goods was justified based on the Notification's provisions.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the comprehensive application of the duty exemption under Notification No. 245/83 to all varieties of medicines cleared by the manufacturer, including those cleared for export, and upheld the claim for rebate on duty paid for exported goods.

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