1998 (3) TMI 351 - AT - Central Excise

Summary

Issues:
- Appeal against the order of Additional Collector of Central Excise and Customs, Surat, dated 28-6-1990.
- Exemption claimed under Notification No. 62/78 for manufacturing various products.
- Classification of products as drug intermediates.
- Consideration of end-use certificates and technical literature.
- Time-barred demands for certain products.
- Discrepancies in chemical examiner's reports.
- Interpretation of relevant technical literature.
- Acceptance of appellant's contentions regarding Urethane.
- Certification of Halazone as a drug by the Director of Food and Drug Control Administration.
- Lack of consideration of relevant aspects by the Additional Collector.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi, challenged the order of the Additional Collector of Central Excise and Customs, Surat, dated 28-6-1990. The appellants claimed exemption under Notification No. 62/78 for manufacturing various products, including D.C.P. I.P., Urethane, and Halazone NF. The dispute centered around the classification of these products as drug intermediates and the rejection of the exemption claimed by the appellant based on a test report by the Chemical Examiner, Baroda.

The appellants contended that their products were used in the manufacture of drugs and thus qualified for the exemption under Notification 62/78. They argued that the end-use certificate and certification from the competent Government authority supported their claim, which the respondent had not considered adequately. Additionally, they raised concerns about time-barred demands for certain products and discrepancies in the chemical examiner's reports regarding the classification of Urethane and Halazone NF as drug intermediates.

The tribunal noted that the Additional Collector had already dropped the demand pertaining to the period prior to 30th April 1983, as it was time-barred. However, the appellants argued that the period from 1st January 1983 to 14th May 1983 was also time-barred. The tribunal agreed with this assertion, emphasizing that the show cause notice was dated 15-11-1983, making the demand up to 14th May 1983 time-barred.

Regarding the classification of Urethane, the tribunal found discrepancies in the chemical examiner's report and the relevant technical literature. The appellants had provided references to the licence issued by the Controller of Drugs, Gujarat State, and technical notes supporting their claim that Urethane was a drug intermediate. The tribunal, relying on the technical literature, accepted the appellant's contention regarding Urethane and set aside the Additional Collector's orders concerning this item.

Similarly, for Halazone NF, the appellants claimed certification as a drug by the Director of Food and Drug Control Administration. The tribunal found that the Additional Collector had not adequately considered this certification and other relevant aspects. As a result, the tribunal remanded the matter for reevaluation, directing the Additional Collector to consider all relevant materials and produce a speaking order after allowing the appellants to present additional evidence.

In conclusion, the tribunal's decision favored the appellants' contentions regarding the classification of Urethane and Halazone NF as drug intermediates, highlighting the importance of considering all relevant evidence and technical literature in such cases.