1997 (12) TMI 261 - AT - Central Excise

Summary

Issues:
- Eligibility of products for benefit under Notification No. 122/86
- Allegation of suppression of facts and invocation of longer period of time

Eligibility of products for benefit under Notification No. 122/86:
The appeal revolved around whether the pharmaceutical products, Fudon-M-Suspension and Fudon-M-Capsule, manufactured by the appellants were eligible for the benefit under Notification No. 122/86. The Department denied the benefit citing the presence of 'Metronidazole,' an ingredient not specified in the Annexure to the notification. The appellants, however, argued that they had disclosed all relevant information, including the composition of the products, in the classification list and labels submitted for approval. They claimed to have mistakenly believed that they could avail benefits under both Notification Nos. 122/86 and 116/69 simultaneously due to the coverage of different components under each notification. The appellants contended that there was no suppression or misstatement of facts with the intent to evade duty. The Tribunal noted that while the products were not eligible for the benefit under Notification 122/86 due to the presence of a non-specified ingredient, the demand was time-barred as there was sufficient disclosure by the appellants, and further action was required from the authorities.

Allegation of suppression of facts and invocation of longer period of time:
The Department alleged suppression of facts and invoked a longer period of time for demand confirmation. It contended that the appellants failed to disclose that 'Metronidazole' was a therapeutically active substance and that the benefit under Notification 122/86 was not applicable to medicaments containing unspecified ingredients. The Department argued that there was insufficient disclosure on the part of the appellants regarding the nature of the unspecified items, leading to suppression with the intention to avail undue benefits. However, the Tribunal found that the appellants had made adequate disclosures by declaring the ingredients in the classification list and labels submitted for approval. It held that the responsibility for further inquiry before finalizing the classification list was on both sides under Rule 173B. Citing precedent cases, the Tribunal concluded that the demand was time-barred due to the disclosed information and modified the order accordingly, disposing of the appeal in favor of the appellants.