Repealed drugs price control order cannot support duty demand; normal valuation applies where goods are outside the current order.

Duty could not be demanded by treating the goods as covered by the repealed Drugs (Prices Control) Order, 1979, because that order had ceased to operate and could not govern the goods at the material time. An exemption notification could be applied only when the assessee actually sought its benefit, and it could not be used to impose a departmental direction inconsistent with the prevailing legal regime. As the goods were not covered by the Drugs (Prices Control) Order, 1987, adoption of normal valuation was correct and the demand was unsustainable.

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Issues: Whether the department could require duty to be paid on goods by treating them as covered by the repealed Drugs (Prices Control) Order, 1979, and whether the appellants were justified in adopting normal valuation for goods not covered by the Drugs (Prices Control) Order, 1987.

Analysis: The exemption was claimed with reference to Notification No. 245/83 dated 13-9-1983. The department's demand proceeded on the premise that the goods continued to be governed by the Drugs (Prices Control) Order, 1979. The operative order had already been repealed by the Drugs (Prices Control) Order, 1987, so the earlier order could not govern the goods at the material time. The terms of an exemption notification could be applied only when the assessee sought the benefit of that notification, and not to impose a Departmental direction contrary to the applicable legal regime. Since the goods were not covered by the 1987 order, normal valuation was correctly adopted.

Conclusion: The demand based on the Drugs (Prices Control) Order, 1979 was unsustainable, and the appellants were in paying duty on goods not covered by the Drugs (Prices Control) Order, 1987 under the normal valuation provisions.

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