Tribunal deems Glyoxal 40% as drug intermediate under Notification No. 55/75

The Tribunal allowed the appeals, determining that Glyoxal 40% qualifies as a drug intermediate under Central Excise Notification No. 55/75. The appellants demonstrated the predominant use of Glyoxal 40% in drug manufacturing, supported by evidence of nil duty assessment for indigenous Glyoxal 40%. Despite the respondent's arguments, the Tribunal found no evidence to refute the principal use of Glyoxal 40% in drug manufacturing, relying on previous acknowledgments and authoritative definitions. Consequently, the Tribunal directed customs authorities to provide consequential relief to the appellants within three months.

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Issues:
Whether the chemical Glyoxal 40% imported by the appellants qualifies for exemption from additional duty of customs as a "drug intermediate" under Central Excise Notification No. 55/75.

Analysis:
The appeals were transferred to the Tribunal for disposal under Section 131B(2) of the Customs Act, 1962. The central issue in all three appeals was the eligibility of Glyoxal 40% for exemption as a "drug intermediate" under the Central Excise Notification. The lower authorities contended that since Glyoxal 40% had multifarious uses and was not predominantly used in drug manufacturing, it did not qualify for the exemption.

During the hearing, the appellants argued that Glyoxal 40% was used in the manufacture of Metronidazole I.P., a drug for which they held a license. They claimed that Glyoxal 40% met the criteria of a "drug intermediate" under the notification based on its predominant use in drug manufacturing. They also presented evidence of indigenous Glyoxal 40% being assessed at nil duty under the same notification.

The respondent argued that the term "intermediate" was not defined in the notification and referred to standard definitions to support their stance. They contended that Glyoxal 40% had various uses beyond drug manufacturing, and its predominant use could not be established. They also cited a book that identified Imidazole, not Glyoxal 40%, as a drug intermediate.

The Tribunal considered the submissions of both parties and noted that the Appellate Collector had previously acknowledged the principal use of Glyoxal 40% in drug manufacturing. The Tribunal found no evidence to rebut this claim and highlighted the classification of Glyoxal 40% by Rajasthan Central Excise authorities under the same notification. The Tribunal interpreted the meaning of "intermediate" based on various authoritative sources and concluded that Glyoxal 40% qualified as a drug intermediate.

In light of the evidence and definitions presented, the Tribunal allowed the appeals and directed the customs authorities to grant consequential relief to the appellants within three months.

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