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TMI Blog1987 (12) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... grating agents, stabilizers and preservatives, moistening agents lubricants, buffering agents and such pharmaceutical necessities are therapeutically inert and do not interfere with the therapeutic or prophylactic activity of the ingredient or ingredients specified in the Schedule to the Notification. Against serial Nos. 21 and 6 of the schedule of the Notification the ingredients Metroni dazole and Di-Iodo Hydroxy Quinoline have been specified. 3. The respondents filed a classification list No. 3/82-83 dated 22-7-1982 for their P or P medicine Amegyl 60 ml and Amegyl 30 ml claiming exemption of central excise duty under the aforesaid Notification. The main ingredients of the product were : (i) Metronidazole Benzoate, and (ii) Di-Iodo Hydroxy Quinoline. Paragraph 1 of the order-in-original No. V/14E/17/51/82 dated 18.4.1983 passed by the Assistant Collector of Central Excise shows that the respondents also declared that the other ingredients used in Amegyl Suspension were pharmaceutical necessities. The Assistant Collector has held that Metronidazole Benzoate is not specified in the schedule to the Notification No. 116/69-C.E. He has also observed in paragraph 4 of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and considered to be a drug of choice in the treatment of Amoeblasis is successfully employed in the treatment of Giardiasis and because of its inherent bitter and metallic taste, Metronidazole has its own limitations in paediatric use and nausea and vomitting after administration has posed a major problem. The literature further adds that with this in view and also keeping in view the high therapeutic efficiency of Metronidazole, a new ester of the same without the element of bitterness and metallic taste has been successfully developed by appellants and the ester is called Metronidazole Benzoate equivalent to 200 mg, of Metronidazole I.P. in 5 ml. It is further advertised that the suspension has a highly palatable flavoured base without the usual bitter taste associated with Metronidazole and it is ideal for paediatric use. 4. The above reproduction from the literature would indicate that use of Metronidazole as such, without removing its inherent bitter and metallic taste would not render it palatable for therapeutic use and therefore, an ester is formed to make it palatable. In other words, the ester is formed merely to remove the bitterness and metallic taste of Metronidaz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication. The chemical formula of these two products is different. Metronidazole Benzoate is, therefore, not covered by the Notification and the respondents herein have no case on merit. Regarding the question of limitation, Shri Shishir Kumar has stated that the respondents claimed the benefit of Notification No. 116/69-C.E. without giving chemical composition/formula of the disputed product in thp classification list. The classification list was approved on 18.10.1979 subject to chemical test. Classification list No. 8/79 filed on 8.11.1979 was approved by the Superintendent without any condition, but the classification list No. 9/79 submitted in November 1979 was approved subject to chemical test on 14.11.1979. Absence of provisional bond would jeopardise the Government Revenue, but it did not make approval of the classification list final. Further, the respondents did not mention Metronidazole Benzoate in the classification list. There was, thus, a mis-declaration in the classification list attracting 5 years limitation period. Show cause notice was issued in this case on 7.12.1982 covering the period from 15.11.1979 to 29.10.1982 which is within the time limit of 5 years. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Madras v. Collector of Central Excise, Madras (iii) 1987(28)- E.L.T.-539 (Tribunal) Albright Morarji and Pandit Ltd., Bombay v. Collector of Central Excise,Bombay (iv) 1987(28)- E.L.T.-167 (Tribunal) Collector of Central Excise, Chandigarh v. D.P. Metal Works, Jalandhar. Shri Subramanian has argued that no provisional bond was executed and the R.T. 12 assessment was final. For provisional assessment, a bond is a must. In this case, assessment was not provisional longer time-limit of 5 years cannot be applied in this case. For this argument he has relied on the following judgments :- (i) 1985(22)- E.L.T.-708 (Cal) Jayashree Textiles Industries others Vs. Collector of Central Excise, Calcutta (ii) 1985(20)- E.L.T.-102 (Tribunal) Castrol Ltd. Calcutta Vs. Collector of Central Excise, Calcutta (iii) 1983(12)- E.L.T.-34 (Mad) Indian Organic Chemicals Ltd. Vs. Union of India and others (iv) 1987(27)- E.L.T.-728 (Tribunal) Usha Martin Industries Ltd., Ranchi Vs. Collector of Central Excise, Patna. The learned advocate has also argued that in the show cause notice there was no allegation of mis-statement of facts. The Department had full knowledge of the facts. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in the Notification No. 116/69-C.E., Metronidazole Benzoate is not so specified. What is specified at Serial No. 21 of the schedule to the Notification is Metronidazole . The question, therefore, arises whether Metronidazole is the same as Metronidazole Benzoate . In our view, the two ingredients are different and not one and the same because of the following reasons :- (i) The chemical formula and the molecular weight are different. In paragraph of the order-in-original, the Assistant Collector has stated that the molecular weight of Metronidazole Benzoate is 275.27 whereas that of Metronidazole is 171.2. He has also stated that molecular formula of Metronidazole Benzoate is C13H13N3O4 which is different from molecular formula of Metronidazole. From pages 89 and 91 of the Paper Book filed by the counsel for the respondents, we find that Metronidazole [1-(2-Hydroxyethyl)-2-Methyl-5-Nitroimi-dazole] has the chemical formula O2N2CH2CH3 OH CH3. Page 91 of the said paper book gives the chemical formula of Metronidazole Benzoate [l-(2-Benzoy)Oxyethyl-2-Methyl-5-Nitro Imidazole] as] U2N CH2CH2OCOC6H5C3. Chemical formula of the two ingredients are thus different. (ii) National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15)- E.L.T.-231 in the case of Parke Davis (India) Ltd., Bombay v. Collector of Central Excise, Bombay, on which the learned advocate has placed reliance is not, therefore, applicable to the present case since in the said case of Parke Davis (India) Ltd., it was observed that as per various pharmacopoeias amodiaquine was always medically administered in the form of amodiaquine hydrochloride tablets as an anti-malarial drug in which hydrochloride was non-active and there was no other form in which the said substance was administered for the purpose, the present case is also distinguishable from the said case of Parke Davis (India) Ltd., inasmuch as Metronidazole is itself used as an ingredient in the preparation of Amegyl Capsules. Notification No. 116/69-C.E. does not provide that substitute would also be eligible for the benefit of said Notification. On the other hand, the Notification very clearly says that Patent or Proprietary medicines containing one or more of the ingredients specified in the Schedule appended to the Notification are exempted from duty leviable thereon. Schedule to the Notification specifies only Metronidazole. Metronidazole Benzoate is a substitute of Metron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alification Subject to Chemical Test although the classification list No. 8/79 filed on 8-11-1979 was approved by the Superintendent without any condition. The next classification list No. 9/79 was approved subject to chemical test on 14.11.1979. According to him, this remark on the classification lists would show that the same were approved by the Superintendent provisionally, although no provisional duty bond was obtained from the respondents. According to him, the provisional duty bond is required to be taken for the purpose of securing the Revenue. He has also argued that absence of provisional bond would jeopardise the Government revenue, but it would not make the approval of the classification list as final. As against these arguments, the learned advocate has stated that in the provisional assessment, bond is a must. He has also argued that RT 12 assessment was final in this case. Therefore, assessment was not provisional. The learned advocate has relied on a few decisions, one of which is the decision of this Tribunal in the case of Usha Martin Industries Ltd., Ranchi v. Collector of Central Excise, Patna, reported in 1987(27)- E.L.T.-728 (Tribunal). In the said case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of proviso to sub-section (1) of Section 11-A ibid. 12. The respondents have filed copies of some classification lists and R.T. 12 returns. These reveal the following position :- (i) Classification list No. 1/79 dated 11.10.1979, vide pages 1 to 4 of the Paper Book filed by the respondents. This was approved by the Supdt. of Central Excise on 11-10-1979 without any reservation. Item 2 of the Memorandum of Approval, which relates to provisional approval/assessment was struck off by the Superintendent of Central Excise while approving this classification list. (ii) Classification list No. Nil dated nil, vide pages 5 to 8 of the Paper Book. Tills was approved by the Superintendent of Central Excise on 18.10.1979 with the following remarks : Approved subject to Chemical Test . However, there is no indication in item 2 of the Memorandum of Approval that the classification list was approved provisionally. (iii) Classification list No. 5/79 dated 8.11.79, vide pages 9 to 12 of the Paper Book, was approved by the Superintendent of Central Excise without any qualification. There is no indication in item of the Memorandum of Approval that the approval was given provisionally. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no time limit for raising demand for duty. The Department was, in the circumstances, bound to disclose the test report, if any. We also observe from the copy of the R.T. 12 Returns for November 1979, December 1979 and January 1980 that the same were finally approved by the Superintendent of Central Excise on 20.3.1981. Although the R.T. 12 Returns for July 1982 and August 1982 and April 1981 and May 1981 were approved provisionally, but those Returns did not include Amegy1 Suspension. The appellant has not produced any material to show that the classification lists and the R.T. 12 Returns for the relevant period in respect of the product Amegyl Suspension were approved provisionally. The formalities contemplated in Rule 9-B of the Central Excise Rules, 1944 for provisional assessment were not observed in this case. The show cause notice dated 27.11.1982 is also silent about provisional assessment. All these facts are sufficient to prove that the assessment of Amegyl Suspension was not provisional during the period covered by the show cause notice. In the circumstances, the provision of Rule 9-B cannot be invoked to raise demand for duty. The demand for duty should be restric ..... X X X X Extracts X X X X X X X X Extracts X X X X
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