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TMI Blog2004 (6) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the competent authority. After 1994, the appellants submitted classification declaration and paid central excise duty accordingly without any objection from the Central Excise Department. 4.M/s. Prem appellants in E/487/03 filed a classification declaration under Rule 173B with effect from 4-5-2000 claiming exemption under Notification No. 6/2000 as amended by Notification No. 36/2000, dated 4-5-2000 for IV Fluids. In respect of the following IV Fluids the appellants claimed exemption : (i) Mannitol Inj. (ii) Metronidazol Inj. (iii) Ciprafloxacin Inj. 5.Appellants were asked by the Central Excise Department to reverse total amount of Cenvat credit on the inputs used in the manufacture of finished goods covered under the said notification. Accordingly, the appellants debited an amount of Rs. 1,87,808. Therefore, according to the appellants the Department had accepted the view that the impugned products are exempted under Notification 36/2000, dated 4-5-2000. Thereafter, by the DG, Central Excise Intelligence a show cause notice dated 28-5-2001 was issued proposing to demand duty on the intravenous fluids and injectible such as Mannitol Injectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 6/2000, dated 1-3-2000 as amended by 36/2000, dated 4-5-2000 exemption from duty had been granted in respect of certain goods included in the list appended thereto. Item 47A was shown as Intravenous fluids coming under Chapter Heading 30 of the Schedule to Central Excise Tariff Act, 1985. Under subsequent notification, namely, 3/2001, dated 1-3-2001 similar exemption was being granted against Item No. 56 where it was shown "Intravenous fluids, which are used for sugar, electrolyte or fluid replenishment" coming under Chapter 30. Commissioner has taken the view in both the cases that IV Fluids for the purpose of exemption under Notification 6/2000 would be only those IV Fluids which are used for sugar electrolyte or fluid replenishment. The Commissioner comes to the above conclusion on the basis of the description of Intravenous Fluids in Notification 3/2001, dated 1-3-2001 appearing at Serial No. 56. He further took the view that in terms of definition of 'Intravenous Fluids' as given in Remington's Pharmaceutical Science intravenous fluids should not contain any added substance. Since the products of the appellants contained added substances they are not IV Fluids. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as clarification of Entry under 47A. 11.Another issue considered by the Bench was whether the goods declared as IV fluids by Albert David and Ahlcon would conform to the specifications of IV fluids in terms of technical literature. The Revenue had contended that the products in question were meant for intravenous infusion for medicinal purposes and were not merely intended to be used as fluid replenishment in human body. It was also contended that the products were IV fluids containing added substances. On this ground also the products were sought to be excluded from the category of Intravenous Fluids coming under Entry No. 47A. The Bench took the view that the contention of the Revenue cannot be sustained. Reliance was placed on technical literature such as Pharmacopoeia, encyclopedia etc. It was observed that all the literature on the subject invariably showed that intravenous fluids are large volume sterile solutions packed in containers holding 100 ml or more. Reference was made to Chapter 8 of Sterile Dosage Forms (3rd Edition) by Salvatore Turco Robert E. King which read as follows :- "The most common uses of intravenous fluids include the correction of ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he drugs contained in them, on the other hand, were for treatment of specific ailments, having antamoebic or/and antibiotic properties, among others. (c) In the 2001-2002 Budget, an explanation, was inserted in Notification 36/2000, clarifying that only such IV fluids which were used for sugar, electrolyte or fluid replenishment, were exempt from duty and not other IV fluids. (In actual fact, this was not a clarificatory explanation, but an entirely new dispensation, vide Notification 3/2001, dated 1-3-2001. (d) The additives in question, if cleared in tablet/syrup form, were eligible to duty @ 16% ad valorem, under S.H. 3003.20. It would be anomalous, therefore, to hold that, if they were cleared as 'injections', as in this case, they would be wholly exempt from payment of duty under Notfn. 36/2000. (e) The Pharmaceutical Form-Fill-Seal Association had, by its letter dated 12-3-2001, stated that IV infusions of Mannitol, Amino Acid, Ciprofloxacin and Metronidazole, were dutiable even after 2001-2002 Budget. 14.Reliance was also placed on the show cause notice on Remington's Practice of Pharmacy. The Bench took into consideration the relevant Chapter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty during the period 4-5-2000 to 31-3-2001 :- S. No. Description of the product Qty. Cleared (Boxes/cartons) Clearance value (Rs.) 1. 10% Mannitol Inj. I.P. 300 ml 255 101139.18 2. 20% Mannitol Inj. I.P. 300 ml 6148 3936935.38 3. 20% Mannitol Inj. I.P. 100 ml 7705 3984002.20 4. Ciprofloxacin 100 ml 6232 1726360.63 5. Metronidazole 100 ml IP 10276 2229811.53 6. Premogyl 100 ml 383 73850.13 7. C.Flox 100 ml 619 161166.38 8. Premezol 500 ml 2990 731323.64 9. ACD Solution A 75 ml IP 566 138305.63 10. ACD Solution B 75 ml IP 1879 485237.21 11. CPD Solution A 70 ml IP 92 22287.00 12. CPD Solution B 42 ml IP 260 59925.00 Total 13650344.20 In respect of Sl. Nos. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been used with success. The simplest method and the one least likely to give rise to peritonitis is to insert a polythene tube into the peritoneal cavity by means of trocar and canuula. Into the peritoneal cavity is gravitated moderately slowly a hypertonic solution (20 per cent dextrose solution with 6 G. sodium chloride per litre added). The liquid is retained by clipping the tube for two hours and then allowing it to flow out. The process is continued for up to forty-eight hours. Thus the peritoneum acts as a dialysing membrane". The above would show how the Dextrose solution is used in peritoneal dialysis. In the same book kidney dialysis process is explained as below :- "The principle of the artificial kidney is that of dialysis across a membrane which is permeable to crystalloids and not to colloids, with the patient's blood on one side of the membrane and a saline bath on the other; excessive crystalloids will leave the blood and enter the bath, which is constantly flowing." The above would show that these items are not pushed through veins and cannot be treated as IV fluids. 18. So also in the case of irrigation fluids we are not able to accept the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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