Single-ingredient exemption for pharmaceutical formulations survives when lidocaine is only an anaesthetic additive, not a therapeutic ingredient.

A terramycin injection containing oxytetracycline and lidocaine was treated as eligible for exemption under Notification No. 29/88-C.E. because lidocaine functioned only as an anaesthetic to reduce pain during administration. The commentary relies on the Larger Bench view that an additive used as a pharmaceutical necessity, and not for any therapeutic effect, does not negate a single-ingredient formulation exemption where it does not interfere with the therapeutic activity of the main ingredient. Technical literature and departmental test reports were cited to support that lidocaine was a permissible additive, so denial of exemption on that ground was unsustainable.

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Issues: Whether the product, a terramycin injection containing lidocaine, remained eligible for exemption under Notification No. 29/88-C.E. as a single ingredient formulation despite the presence of lidocaine.

Analysis: The product was found to contain oxytetracycline with lidocaine used only as an anaesthetic to reduce pain during administration. The issue was treated as covered by the Larger Bench view that lidocaine, when added as a pharmaceutical necessity and not for therapeutic effect, does not defeat the benefit of the exemption. The material relied on showed that the notification was concerned with the therapeutic character of the ingredient and that lidocaine did not interfere with the therapeutic activity of oxytetracycline. The technical literature and the departmental test reports supported the conclusion that lidocaine was used as a permissible additive in such injections.

Conclusion: The product was entitled to the benefit of the exemption notification and the denial of exemption was unsustainable.

Final Conclusion: The classification dispute was resolved in favour of the assessee, and the exemption could not be denied on the ground that lidocaine was present in the formulation.

Ratio Decidendi: An additive used only as a pharmaceutical necessity and not for therapeutic effect does not negate eligibility for an exemption meant for a single ingredient formulation.

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