Patent or proprietary medicaments classified as dutiable goods, so Rule 57CC(1) could not be invoked for exported products.

Rule 57CC(1) applies only where common inputs are used to manufacture both dutiable and exempted final products without separate input accounts. Medicaments cleared for export were found, by their nomenclature and trade description, to be patent or proprietary medicaments under Note (2)(ii) to Chapter 30 because they bore a non-pharmacopoeial name, a registered brand name, or another mark indicating trade connection. They were therefore classifiable under Heading 3003.10 as dutiable goods, not exempted final products. On that basis, Rule 57CC(1) did not apply and the demand raised under that provision could not be sustained.

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Issues: Whether medicaments cleared for export were exempted final products so as to attract Rule 57CC(1) of the Central Excise Rules, 1944, or whether they were patent or proprietary medicaments classifiable under Heading 3003.10 and therefore dutiable.

Analysis: Rule 57CC(1) applies only where a manufacturer uses common inputs to make both dutiable and exempted final products and takes Modvat credit without maintaining separate accounts for the inputs used in the two categories. The exported medicaments were found, on their nomenclature and trade description, to fall within the definition of patent or proprietary medicaments under Note (2)(ii) to Chapter 30 of the Central Excise Tariff Act. A medicament answers that definition where it bears a non-pharmacopoeial name, a registered brand name, or another mark indicating a trade connection. On that basis, the exported goods were not exempted products but dutiable goods classifiable under sub-heading 3003.10.

Conclusion: Rule 57CC(1) was inapplicable and the demand raised under that provision could not be sustained.

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