2012 (6) TMI 49 - AT - Central Excise

Eligibility of the exemption Notification No.30/98 dated 1.3.1998 - Revenue demanded duty on the ground that the said product contained Niacinamide which is a vitamin B compound and therapeutically active ingredient in addition to Dexamethazone held to be not eligible for the exemption under the Notification Held that - The contents of Niacinamide are reported to be 20 mg per ml whereas the Prophylactic dose as per British Pharmacopoeia has to be between 5 mg to 30 mg per kg of body weight as per these standards, the equivalent Niacinamide contents in Curadex would work out to be 20 times less than the recommended dose of Niacinamide as per BP - the exemption on such product under Notification could not be denied to the Appellants in favour of assessee

Summary

Issues:
Manufacture of excisable goods containing Niacinamide, eligibility for exemption under Notification No.30/98, demand of duty, expert opinion on product composition, compliance with stay order conditions, reliance on earlier adjudication order, therapeutic value of Niacinamide.

Manufacture of excisable goods containing Niacinamide:
The case involved the manufacture of Curadex/Dexamethazone Injection by the respondents falling under Chapter 30 of the Central Excise Tariff. The issue was whether the product contained Niacinamide, a vitamin B compound, in addition to Dexamethazone, affecting the eligibility for exemption under Notification No.30/98. The expert opinion stated that the product contained Niacinamide in macro quantities with a prophylactic function, leading to the denial of exemption and confirmation of duty demands.

Compliance with stay order conditions:
The Commissioner (Appeals) had directed the respondents to deposit a specified amount as a condition for stay, which was not complied with, resulting in the dismissal of the appeal. The Tribunal set aside this order and directed the Commissioner (Appeals) to decide the issue without insisting on pre-deposit.

Reliance on earlier adjudication order and therapeutic value of Niacinamide:
The Commissioner (Appeals) relied on an earlier order by the Deputy Commissioner that dropped the demand for similar grounds. The contention of the Revenue was based on the statement of a Senior Manager regarding the therapeutic value of Niacinamide in the product. However, the Commissioner (Appeals) found merit in the argument that the Niacinamide content was within acceptable limits as per British Pharmacopoeia standards, making the product eligible for exemption under the Notification.

Conclusion:
The Tribunal dismissed the appeal, upholding the impugned order of the Commissioner (Appeals) in favor of the respondents. The decision was based on the finding that the Niacinamide content in the product was within acceptable limits as per standards, and considering the earlier order dropping similar proceedings. The appeal was therefore dismissed, affirming the eligibility of the product for exemption under the Notification.