Exemption notification limits and disclosure-based limitation bar demand where product was not expressly listed.

Exemption under Sl. No. 57 of Notification No. 06/2002 was confined to formulations manufactured from bulk drugs expressly listed in List 2, so Oxytetracycline Injectable Solution (Veterinary), being only a derivative of Tetracycline Hydrochloride and not specifically listed, was held outside the exemption. On limitation, the assessee had disclosed the product through a price declaration and monthly returns showing clearance without duty, so the material facts were already before the department and the extended period could not be invoked. The demand was therefore time-barred despite failure on the exemption claim.

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Issues: (i) whether the product "Oxytetracycline Injectable Solution (Veterinary)" was covered by Sl. No. 57 of Notification No. 06/2002 dated 01.03.2002 as a formulation manufactured from the bulk drugs specified in List 2; (ii) whether the demand was barred by limitation in view of the declarations and monthly returns filed by the assessee.

Issue (i): whether the product "Oxytetracycline Injectable Solution (Veterinary)" was covered by Sl. No. 57 of Notification No. 06/2002 dated 01.03.2002 as a formulation manufactured from the bulk drugs specified in List 2.

Analysis: The exemption under Sl. No. 57 extended only to formulations manufactured from the bulk drugs specifically listed in List 2. The product in question was not named in that list, and the fact that it was described as a derivative of Tetracycline Hydrochloride did not enlarge the notification. A derivative not expressly covered by the list could not be brought within the exemption by implication.

Conclusion: The product was not covered by the exemption notification, and this issue was decided against the assessee.

Issue (ii): whether the demand was barred by limitation in view of the declarations and monthly returns filed by the assessee.

Analysis: The assessee had filed a price declaration under Rule 173C of the Central Excise Rules, 1944, and the product was disclosed in the monthly returns as being cleared without duty under Notification No. 06/2002. The records therefore showed disclosure of the relevant facts to the department, and the invocation of the extended period was not sustainable.

Conclusion: The demand was barred by limitation, and this issue was decided in favour of the assessee.

Final Conclusion: Although the exemption claim failed on merits, the revenue's appeals could not survive because the demand itself was held time-barred.

Ratio Decidendi: An exemption notification must be confined to the goods expressly covered by its terms, and where the assessee has disclosed the material facts in statutory declarations and returns, the extended period of limitation cannot be invoked.

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