Drug intermediate exemption turns on actual use in manufacture, not on whether potassium carbonate has other applications.

Potassium carbonate supplied and actually used in drug manufacture qualified as a drug intermediate for exemption under Notification No. 62/78-C.E. The relevant test was actual supply and end use in the manufacture of drugs, supported by end-use and technical certificates, rather than whether the substance was inherently a drug by name or composition. Its capability of other applications did not defeat the exemption in the absence of contrary evidence. The assessee was therefore entitled to the benefit of the notification.

---

---

Issues: Whether potassium carbonate, when supplied and actually used in the manufacture of drugs, qualified as a "drug intermediate" eligible for exemption under Notification No. 62/78-C.E. dated 1-3-1978.

Analysis: The notification covered drugs, medicines, pharmaceuticals and drug intermediates. The product was a chemical with multiple uses, but the record included end-use certificates and technical certificates showing its actual use in drug manufacture. In the absence of contra evidence, the product could not be excluded merely because it was also capable of other applications. The relevant test was actual supply and use as a drug intermediate, not whether the substance was inherently a drug by name or composition.

Conclusion: Potassium carbonate was held to be a drug intermediate for the purpose of the exemption, and the assessee was entitled to the benefit of the notification.

---