1999 (1) TMI 194 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 122/86 regarding exemption of medicaments.
2. Whether specific ingredients in the capsules qualify for the exemption.
3. Time bar issue in relation to the classification of the product.

Interpretation of Notification No. 122/86:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute over the interpretation of Notification No. 122/86 concerning the exemption of medicaments. The central issue revolved around whether the capsules in question, namely Diarnil tablets, Rison capsules, and Sorogyl DF tablets, were entitled to the benefit of the notification. The Collector (Appeals) had allowed the benefit for Rison Capsules but denied it for the other two products. The department contended that the specific ingredients in the capsules did not match those listed in the annexure to the notification, which outlined ingredients eligible for exemption. The Collector (Appeals) had granted the benefit based on the pharmaceutical necessity of the ingredients, as supported by a certificate and technical literature. However, the Tribunal found that since none of the specified permissible ingredients were present in the capsules, the appellants were not entitled to the notification's benefit.

Qualification for Exemption:
The Tribunal carefully analyzed the wording of Notification No. 122/86, which granted exemption to medicaments containing specified ingredients listed in the annexure. It noted that while the notification allowed for pharmaceutical necessities not listed in the annexure under certain conditions, this provision only applied if the main clause regarding specified ingredients was satisfied. As none of the specified ingredients were found in the capsules under consideration, the Tribunal upheld the department's contention that the capsules did not qualify for the exemption provided in the notification. The Tribunal refrained from delving into the Collector's observations on pharmaceutical necessity due to the absence of relevant material.

Time Bar Issue:
Regarding the time bar issue related to the classification of the product, the Tribunal observed an interesting situation. It noted that if the assessment was final, the appellants should have filed an appeal within three months of finalization. On the other hand, if the assessment was provisional, the respondents had the opportunity to appeal against the adjudication order. However, the Tribunal found that the respondents had not disputed the classification list before the Collector, leading to a conclusion that they had missed the opportunity to raise classification issues. Consequently, the Tribunal focused solely on the applicability of Notification No. 122/86 and ruled in favor of the department, denying the benefit of the notification to the appellants for Rison Capsules. The cross objection was also disposed of accordingly.