1999 (11) TMI 250 - AT - Central Excise

Summary

Issues:
Classification list approval under Rule 173B of Central Excise Rules, interpretation of Notification No. 31/88, eligibility for benefit under Notification No. 31/88 based on bulk drug classification.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi concerned the classification list approval under Rule 173B of Central Excise Rules. The Revenue contended that since the classification list was approved by the Assistant Collector and not set aside or stayed, it remained valid and binding. The validity of the classification list was not disputed by the assessee. Additionally, the Revenue argued that the products in question were not specified in the Second Schedule to DPCC and thus not entitled to the benefit under Notification No. 31/88. They sought to set aside the order-in-appeal and restore the order-in-original passed by the Assistant Collector.

Regarding the interpretation of Notification No. 31/88, the Revenue submitted that the notification exempted goods falling under specific chapters of the Central Excise Tariff Act, 1985 in excess of the specified rate. They emphasized that the notification applied to bulk drugs, defined as substances conforming to pharmacopocial standards used in formulations. The Revenue highlighted that the benefit under the notification was claimed for Paracetamol, Chloropheniramine, and Phenylephrine hydrochloride. They argued that since the goods were not covered in the First Schedule of bulk drugs, they should be considered under "other bulk drugs" in the Second Schedule, with only Chloropheniramine being eligible for the concessional rate.

In the absence of representation from the Respondents, the Tribunal examined the issue of eligibility for the benefit under Notification No. 31/88. They analyzed the notification's provision for "other bulk drugs" attracting a 5% ad valorem duty. By scrutinizing the Drugs (Price Control) Order and the Schedules, the Tribunal determined that the expression "other bulk drugs" should refer to items listed in the Second Schedule, as they were not covered in the First Schedule meant for specific health programs. Since Chloropheniramine was the only item mentioned in the Second Schedule, the Tribunal concluded that only Chloropheniramine was eligible for the benefit under Notification No. 31/88, while the other two drugs were not entitled to the concessional rate. Consequently, the appeal was disposed of accordingly.