Unconditional exemption for listed drugs extends to bulk drugs where the notification does not exclude them.

An unconditional customs exemption for listed drugs was treated as covering bulk drugs where the notification did not define "drug" to exclude them. Lopinavir, being included in List 3 to Notification No. 21/2002-Customs, was held eligible for exemption under Sl. No. 47(A) of Notification No. 4/2006-C.E. The separate procedural requirements attached to the concessional bulk drug entry under Sl. No. 47(B) did not apply to the unconditional exemption, and the record also indicated substantial compliance with the certificate procedure. The exemption was sustained, and the revenue challenge failed.

---

---

Issues: Whether Lopinavir, being a bulk drug included in List 3 to Notification No. 21/2002-Customs, was entitled to exemption under Sl. No. 47(A) of Notification No. 4/2006-C.E. without compliance with the procedure prescribed for bulk drugs under the concessional rate rules.

Analysis: The goods were cleared as a bulk drug, but the relevant notification did not define "bulk drug". The item figured in List 3 appended to Notification No. 21/2002-Customs, and the Tribunal treated "drug" as encompassing bulk drugs in the light of the Drugs (Prices Control) Order, 1995 and the structure of the exemption notification. The distinction between Sl. No. 47(A) and 47(B) did not defeat the claim, because the listed goods fell within the unconditional exemption at Sl. No. 47(A). The record also showed that the buyer was not supplied the certificate required for the concessional procedure because the jurisdictional authority had treated such certificate as unnecessary, and there was substantial compliance with the procedural requirement in any event.

Conclusion: Lopinavir was held eligible for exemption under Sl. No. 47(A), and the procedural condition applicable to bulk drugs under Sl. No. 47(B) did not apply. The revenue appeal failed.

Final Conclusion: The order granting exemption was sustained, and the demand and penalty set aside by the lower appellate authority remained undisturbed.

Ratio Decidendi: Where a notification grants unconditional exemption to listed drugs and the expression "drug" is not defined so as to exclude bulk drugs, a bulk drug specifically included in the referenced list is entitled to the exemption notwithstanding procedural conditions attached to a separate entry for bulk drugs.

---