Notification No. 55/75-C.E., dated 1-3-1975, as amended from time to time, and notification No. 104/82-C.E., dated 28-2-1982 and notification No. 234/82-C.E., dated 1-11-1982 before its amendment by notification No. 174/83-C.E., dated 30-6-1983 - Scope of the expression 'drug intermediates' for the - Central Excise - 45/89

Notification No. 55/75-C.E., dated 1-3-1975, as amended from time to time, and notification No. 104/82-C.E., dated 28-2-1982 and notification No. 234/82-C.E., dated 1-11-1982 before its amendment by notification No. 174/83-C.E., dated 30-6-1983 - Scope of the expression 'drug intermediates' for the purpose of exemption - Doubts regarding - Clarification thereof Circular No. 45/89 Dated 19-7-1989 [From F. No. 102/4/89-CX.3] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Notification No. 55/75-C.E., dated 1-3-1975, as amended from time to time, and notification No. 104/82-C.E., dated 28-2-1982 and notification No. 234/82-C.E., dated 1-11-1982 before its amendment by notification No. 174/83-C.E., dated 30-6-1983 - Scope of the expression 'drug intermediates' for the purpose of exemption - Doubts regarding - Clarification thereof. It is stated that notification No. 55/75-C.E., dated 1-3-1975, amended from time to time, granted full exemption to 'drug intermediates' falling under TI 68 of the old GET. On 28-2-1982, notification No. 55/75-C.E. was superseded by notification No. 104/82-C.E., dated 28-2-1982 which, inter alia, continued such exemption to the said 'drug intermediates'. Notification No. 104/82-C.E. was later on superseded by notification No. 234/82-C.E., dated 1-11-1982 which also, inter alia, carried on the same exemption. On 30-6-1983, notification No. 174/83-C.E., dated 30-6-1983 amended notification No. 234/82-C.E. so as to withdraw the exemption to 'drug intermediates' from that notification. However, on 30-6-1983 itself, notification No. 172/83-C.E. was issued, exempting only certain specified drug intermediates. The present notification No. 147/84-C.E., dated 18-6-1984, as amended also exempts specified drug intermediates. As from 30-6-1983, the exempted drug intermediates have been specified in the exemption notification, the problem of defining 'drug intermediates' had not to be faced. However, during the period from 1-3-1975 to 29-6-1983, such a problem had to be faced because the exemption was generally for all 'drug intermediates' falling under TI68 of the old CET. During the period, whereas the Department was of the view that a 'drug intermediate' should only mean a chemical which is used exclusively in the manufacture of drugs, the manufacturers were of the view that a 'drug intermediate' should mean any chemical which is used in the manufacture of drugs even if such chemical is used also for purposes other than for the manufacture of 'drugs'. 2. In the above context, the CEGAT had passed Order Nos. 929-930/87-C, dated 8-12-1987 in the case of Andhra Sugar Ltd. v. Collector of Central Excise, Guntur rejecting the aforementioned viewpoint of the Department. The Department filed an appeal which has now been dismissed by the Hon'ble Supreme Court vide their Order dated 26-10-1988 in CA No. 1568-69 of 1988. The Board has accepted the said Supreme Court Order. The acceptance of the said Order would imply that, during the period from 1-3-1975 to 29-6-1983, any chemical falling under TI 68 of the old CET, if sold to a drug manufacturer and used in the manufacture of drugs, ought to have been treated as a 'drug intermediate' and the benefits of the afore-mentioned relevant exemption notifications ought to have been granted to such goods. 3. The above-mentioned guidelines may be brought to the notice of the lower field formations and the trade interests may also be suitably advised. 4. All pending assessments may be finalise