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TMI Blog2009 (7) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... enue against the Order-in-appeal No. 54/2008 dated 11-11-2008. Vide the impugned order the Commissioner (Appeals) set aside the order of the original authority denying benefit of exemption under Notification No. 4/2006-C.E. dated 1-3-2006 on clearances of a bulk drug Lopinavir made by the appellants during the period July, 2007 to September, 2007. He had confirmed demand of Central Excise duty and education cess totaling Rs. 44,08,400/- along with applicable interest. He had also imposed a penalty of Rs. 5 lakhs on the appellants under Rule 25 of the Central Excise Rules, 2002. 2. The facts of the case are that appellants had cleared consignments of Lopinavir availing exemption under Notification No. 4/2006-C.E. in terms of the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts was denied the required certificate to procure the goods on the ground that such certificate was not required. In holding the view that bulk drugs figured under Sl. No. 47(A) could be allowed the benefit of the Notification unconditionally, he relied on the decisions of the Tribunal in the case of M/s. Burroughs Wellcome (I) Ltd. v. CCE [2007 (216) E.L.T. 522 (Tri. Mum.)] and M/s. Cipla Ltd. v. CCE, Chennai [2007 (218) E.L.T. 547 (Tri. Chennai)]. 4. In the appeal before the Tribunal, the appellant revenue has taken the following grounds. It is submitted that Lopinavir is bulk drug and cannot be treated as drug or medicines . The expression drug at Sl. No. 47(A) referred to finished pharmaceutical products or formulations whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No. 47(A) of the Notification No. 4/2006-C.E. The impugned item was cleared as bulk drug without following the procedure prescribed in the rules. We find that there is no definition of bulk drugs in the Notification involved. As per the Drugs (Prices Control) Order, 1995, drugs also include bulk drugs. The item Lopinavir figures in List 3 of Notification No. 21/2002-Cus. Therefore we find that the impugned clearances of Lopinavir are entitled to exemption extended to goods at against Sl. No. 47(A). In terms of the Notification such clearances are entitled to exemption unconditionally. 7. We also find that the revenue has no case that the disputed consignments had not been utilized in further production of medicines by the consign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... figuring at Sl. Nos. 117 and 118 respectively of List 3 appended to Notification No. 21/2002-Cus dated 1-3-2002. As the impugned goods had been bulk drugs, the appellants were required to follow certain conditions. As they had not followed the prescribed conditions, benefit in terms of Sl. No. 47(B) was denied. The Tribunal held that the items Nevirapine and Stavudine figured in List 3 appended to Notification No. 21/2002-Cus. The term drug had to be considered to include bulk drug and formulation, as per the Drugs (Price Control) Rules, both items being bulk drugs were entitled to the benefit of the Notification. 10. In the M/s. Burroughs Wellcome (I) Ltd. case, the Tribunal interpreted the following entries at Sl. No. 43 of Notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of the very same impugned goods . 11. In M/s. Cipla Ltd. case (supra), the Tribunal was concerned with the scope of the exemption extended to goods figuring at Sl. No. 80 of the table to Notification No. 21/02-Cus, which was as follows :- Sl. No. Chapter or Heading No. or sub-heading No. Description of goods Standard rate Additional duty rate Condition No. 1 2 3 4 5 6 80 28, 29 or 30 The following goods, namely (A) Drugs, medicines, diagnostic kits or equipment specified in List 3 5% -- -- (B) Bulk drugs used in the manufacture of drugs or medicines at (A) ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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