Concessional duty for formulations containing notified bulk drugs applies unless the product falls outside the statutory definition.

A medicament manufactured from notified bulk drugs such as streptomycin can qualify as a formulation under Notification No. 8/95-C.E. if it is processed out of or contains one or more specified bulk drugs and does not fall within the express exclusion under the Drugs and Cosmetics Act, 1940. Denial of concessional duty is not justified merely because the combination is not separately listed in the Second Schedule or because no clear basis is shown for treating an ingredient as disqualifying. On the stated facts, the product satisfied the notification's definition and the concessional duty benefit was available.

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Issues: Whether the product manufactured from streptomycin and penicillin was entitled to concessional duty as a formulation under Notification No. 8/95-C.E. dated 9-2-1995.

Analysis: The notification granted concessional duty to formulations manufactured from specified bulk drugs, and the explanation defined a formulation as a medicament processed out of or containing one or more bulk drugs, with or without therapeutic aids, subject to exclusion only where the Drugs and Cosmetics Act, 1940 did not apply. Streptomycin was among the bulk drugs specified in the notification. The authorities had denied the benefit without a clear finding showing why the product failed the explanation. The record also showed that the ratio of the product had been furnished, and there was no basis to hold that the product was outside the definition merely because the combination was not separately specified in the second schedule to the Drugs and Cosmetics Act, 1940 or because the ingredient sodium citrate was not shown to fail the test of therapeutic inertness.

Conclusion: The product was a formulation within the meaning of the notification and the concessional duty benefit was available to the assessee.

Ratio Decidendi: A medicament containing a notified bulk drug qualifies as a formulation under the exemption notification unless it is shown to fall outside the statutory definition or within the express exclusion.

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