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Issues: Whether Epichlorohydrine imported by the appellants was entitled to exemption from additional (countervailing) duty of customs under the relevant exemption notification as a drug intermediate used in the manufacture of a drug.
Analysis: The appellants held a drug manufacturing licence and produced a certificate from the Drugs Controller and Food (Health) Authority stating that Epichlorohydrine and Guaiacol were used as drug intermediates for manufacturing Glyceryl Guaicolate. The record also indicated that the final product was recognised as a drug in the Merck Index. In these circumstances, the imported chemical was considered eligible for the exemption, to the extent the appellants could satisfy the departmental authorities regarding its use in drug manufacture.
Conclusion: The exemption claim was accepted and the impugned order was set aside in favour of the appellants.
Final Conclusion: The appeal succeeded and the refund claim was allowed on the basis that the imported chemical qualified for exemption as a drug intermediate, subject to satisfaction of the prescribed end-use requirement.
Ratio Decidendi: Where the importer establishes that the imported chemical is used as a drug intermediate in the manufacture of a drug, exemption under the relevant notification cannot be denied merely on the ground that the substance is also a versatile chemical.
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