Excise duty exemption on bulk drugs cannot be denied merely for late filing of the classification list.

Exemption from excise duty on bulk drugs under Chapters 28 and 29 continued to apply after the earlier notification was rescinded, and the benefit remained available up to 8 February 1995 under the continuing concessional notification. For the later period up to 26 March 1995, the exemption could not be denied merely because the classification list was filed belatedly, as the later notification did not make prior filing a condition for the benefit. The demand and penalty were held unsustainable for the disputed period, and the exemption benefit was sustained.

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Issues: Whether the assessee was entitled to the benefit of excise duty exemption on the bulk drug for the period after the rescission of the earlier notification and before the filing of the classification list, and whether the exemption could be denied merely because the classification list was filed later.

Analysis: The applicable exemption for bulk drugs under Chapters 28 and 29 continued to operate after the earlier drug price control regime was superseded. The benefit was held to remain available up to 8 February 1995 in view of the continuing effect of the concessional notification, and thereafter up to 26 March 1995 because the later notification did not make the exemption conditional upon prior filing of a classification list. The demand and penalty were therefore unsustainable for the disputed period.

Conclusion: The exemption benefit was admissible to the assessee up to 26 March 1995, and the denial of benefit was not justified.

Final Conclusion: The appeal failed and the order granting the exemption benefit was sustained.

Ratio Decidendi: Where an exemption notification continues to govern the goods and the later notification does not link the benefit to filing of a classification list, exemption cannot be denied for the intervening period merely because the classification list was filed belatedly.

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