2015 (4) TMI 607 - SC - Central Excise

Denial of Concessional rate of duty - Notification No.8 /95 dated 9.2.95 - Denial on the ground that product is combination of streptomycin and penicillin - Held that - On reading the definition of formulations , we find that the plea taken by the respondent/assessee that even if one of the bulk drugs mentioned at serial no.1 is included in the formulation that would satisfy the definition of formulations contained at serial no.2 is correct and has to be accepted, and is rightly accepted by the Tribunal. As per the definition, even if the formulation is processed out of or containing one bulk product the condition of Notification stands satisfied. We, therefore, do not find any error in the order passed by the Tribunal. - Decided against Revenue.

Summary

Issues: Interpretation of Notification No.8/95 dated 9.2.95 for excise duty benefit on Strepto Pencillin Injection.

In the present case, the main issue revolved around the interpretation of Notification No.8/95 dated 9.2.95 for claiming the benefit of excise duty on the product called 'Strepto Pencillin Injection.' The Department contended that the product was a combination of streptomycin and penicillin and, therefore, not entitled to the concessional rate of duty under the said Notification. The Department's argument was based on the absence of penicillin in the table specified in the Notification. On the other hand, the assessee argued that even if one of the bulk drugs mentioned in the table was included in the formulation, it would satisfy the definition of 'formulations' as per the Notification. The Tribunal accepted the assessee's interpretation, leading to the dismissal of the appeal.

The Tribunal's decision was based on a detailed analysis of the definition of 'formulations' provided in the Notification. The definition stated that a formulation means medicaments processed out of or containing one or more bulk drugs, with or without the use of pharmaceutical aids, which are therapeutically inert and do not interfere with the activity of the drugs. The definition did not specify that all bulk drugs mentioned in the table must be included in the formulation for it to qualify. Therefore, the Tribunal concluded that even if the formulation contained one bulk drug specified in the table, it would satisfy the conditions of the Notification. This interpretation was crucial in determining the eligibility of the assessee for the concessional rate of duty under the Notification.

Overall, the Supreme Court upheld the Tribunal's decision and dismissed the appeal, emphasizing that the assessee's interpretation of the Notification was correct. The Court agreed that as per the definition of 'formulations' provided in the Notification, including one bulk drug in the formulation was sufficient to meet the requirements for claiming the benefit of excise duty under the Notification. This judgment clarifies the importance of a thorough analysis of legal definitions and provisions in interpreting statutory notifications for tax benefits and obligations.