2025 (2) TMI 101 - AT - Central Excise

Tribunal rules in favor of 100% EOU, confirms 'bulk drugs' classification for duty exemption under Notification No. 12/2012-Cus.

The CESTAT Ahmedabad set aside the Commissioner's order and ruled in favor of the appellant, a 100% EOU, regarding the classification and duty exemption ... 100% EOU - classification and duty exemption of imported drugs under N/N. 12/2012-Cus. dated 17 March, 2012, Serial No. 147(A) - difference between bulk drugs and drugs - HELD THAT:- The issue has been dealt with in para 5.2 of the decision in the matter of AUROBINDO PHARMA LTD. VERSUS COMMISSIONER OF C.EX., HYDERABAD-I [2009 (3) TMI 810 - CESTAT, BANGALORE] by the advocate, where it was held that 'the term 'drug' has to be considered to include bulk drug and formulation as per Drugs (Prices Control) Order, 1995 and hence, both the items being bulk drugs are entitled for the benefit of the Notification.' In view of the ratio, that there is no difference between bulk drugs and drugs and term drugs include the bulk drags also. This Court find that the issue is no more res integra. Conclusion - Imported drugs is eligible for duty exemption under N/N. 12/2012-Cus. dated 17 March, 2012, Serial No. 147(A). Appeal allowed. The Appellate Tribunal, CESTAT Ahmedabad, presided over by MR. SOMESH ARORA, MEMBER (JUDICIAL), addressed a dispute concerning the classification and duty exemption of imported drugs by a 100% Export Oriented Unit (EOU) for the period of June 2015 to September 2016. The appellant, represented by Ms. Vidhi Makad, CA, argued that the drugs were imported as 'bulk drugs' under Notification No. 12/2012-Cus., which allowed for a reduced customs duty. The appellant relied on the precedent set in AUROBINDO PHARMA LTD. VERSUS COMMISSIONER OF C.EX., HYDERABAD-I, which held that the term 'drug' includes 'bulk drug' and thus qualifies for duty exemptions.The respondent, represented by Shri. M.P. Solanki, contended that the appellant initially declared the goods as 'drugs' at importation and later sought benefits applicable to 'bulk drugs,' which was inconsistent.The Tribunal found the issue analogous to prior cases, notably Mis. Astrix Laboratories Ltd., where drugs listed in List No. 3 of the Customs Notification were deemed eligible for exemption. The Tribunal concluded that the impugned order by the Commissioner was incorrect, set it aside, and allowed the appellant's appeal. It emphasized that the term 'drug' encompasses 'bulk drug,' rendering the issue 'no more res integra' and upheld the appeal with consequential relief, rejecting the revenue's appeal. The decision was dictated and pronounced in open court.