Bulk drug exemption covers pharmacopoeial substances with therapeutic or veterinary use, even when used as a solvent in formulation.

Propylene glycol USP, used as a solvent in oxytetracycline injection, was treated as a bulk drug under Central Excise Notification No. 234/82 because it conformed to pharmacopoeial standards and had recognised therapeutic and veterinary use. The notification covered chemical, biological or plant products used for diagnosis, treatment, mitigation or prevention of disease, whether used directly or as an ingredient in a formulation. The substance was not excluded merely because its immediate role was as a solvent in drug manufacture, and the importer was entitled to exemption from additional duty of customs.

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Issues: Whether propylene glycol USP, used as a solvent in the manufacture of oxytetracycline injection, qualified as a bulk drug eligible for exemption from additional duty of customs under Central Excise Notification No. 234/82 dated 1-11-1982.

Analysis: The notification defined bulk drugs as chemical, biological or plant products conforming to pharmacopoeial standards and used for the diagnosis, treatment, mitigation or prevention of disease in human beings or animals, and used as such or as an ingredient in any formulation. The imported goods admittedly conformed to USP standards and were used in manufacture of a drug formulation. The material on record, including pharmacopoeial references, showed that propylene glycol had veterinary uses and was used in the treatment of animals. On that basis, the substance satisfied the notification definition and could not be excluded merely because it was used as a solvent in the formulation.

Conclusion: Propylene glycol USP was held to be a bulk drug within the meaning of the notification and the importer was entitled to the exemption.

Ratio Decidendi: A substance conforming to pharmacopoeial standards and having recognised therapeutic or veterinary use falls within the expression bulk drug under the exemption notification, even when used as a solvent in drug formulation.

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