2009 (7) TMI 1139 - AT - Central Excise

Benefit of Notification No. 4/2006-C.E. dated 1-3-2006 - clearances of a bulk drug Lopinavir - whether Lopinavir , an item figuring in List 3 appended to the Notification of the Govt. of India, erstwhile Ministry of Finance (Department of Revenue) No. 21/2002-Customs dated 1-3-2002 is entitled to the exemption in terms of the Sl. No. 47(A) of the Notification No. 4/2006-C.E?

Summary

Issues:
- Whether the appellant is entitled to the benefit of exemption under Notification No. 4/2006-C.E. dated 1-3-2006 on clearances of a bulk drug "Lopinavir" made during a specific period.
- Whether the appellant's clearance of "Lopinavir" without following the prescribed procedure under Central Excise Rules, 2001 affects their eligibility for exemption.
- Whether the term "bulk drugs" includes "drugs or medicines" under the relevant notification.
- Whether the appellant's reliance on specific case laws supports their claim for exemption.

Analysis:
1. The appeal was filed by the revenue against the Order-in-appeal denying exemption under Notification No. 4/2006-C.E. for clearances of "Lopinavir." The Commissioner (Appeals) set aside the denial and imposed penalties. The appellant's clearance was under Sl. No. 47A of the notification, which did not require following Central Excise Rules, 2001.

2. The dispute centered around whether "Lopinavir" as a bulk drug qualifies for exemption under Sl. No. 47(A) of the notification. The Commissioner (Appeals) found in favor of the appellant, citing precedents and lack of definition for "bulk drugs" in the notification. The appellant's compliance was hindered by the denial of a required certificate by the Asst. Commissioner.

3. The revenue argued that "Lopinavir" should be classified as a bulk drug, not a drug or medicine under the notification. They contended that the appellant failed to follow the prescribed procedure for bulk drugs under the notification. The Tribunal found that the lack of a specific definition for "bulk drugs" favored the appellant's claim for exemption.

4. The Tribunal reviewed case laws cited by both parties, including M/s. Burroughs Wellcome (I) Ltd. and M/s. Cipla Ltd., to determine the scope of exemption under similar notifications. The Tribunal noted that the decisions supported the appellant's claim for exemption based on the classification of the goods and their intended use.

5. Considering the lack of a clear definition for "bulk drugs" in the notification and the appellant's compliance efforts, the Tribunal upheld the appellant's entitlement to exemption under Sl. No. 47(A) of the notification. The Tribunal rejected the appeal by the revenue, citing precedents and the lack of evidence against the appellant's eligibility for exemption.