1993 (4) TMI 174 - AT - Central Excise

Appellate Tribunal Upholds Decision on Bulk Drugs Exemption Eligibility Under Notification 234/86-C.E.

UNICHEM LAB LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY

The Appellate Tribunal upheld the lower authorities' decision regarding the eligibility of bulk drugs for exemption under Notification 234/86-C.E. The ... Exemption - Bulk drugs Issues:1. Eligibility of bulk drugs for exemption under Notification 234/86-C.E., dated 3-4-1986.Detailed Analysis:The appeal before the Appellate Tribunal CEGAT, New Delhi concerned the eligibility of bulk drugs manufactured by the appellants for exemption under Notification 234/86-C.E., dated 3-4-1986. The dispute arose from the classification of bulk drugs under the Central Excise Tariff. Prior to 1-3-1986, bulk drugs manufactured by the appellants were exempted from excise duty under Notification No. 234/82. Subsequently, with the introduction of new notifications, including Notification 234/86, the classification of bulk drugs became contentious. The appellants claimed exemption under Notification 234/86 for bulk drugs classified under sub-heading 2913.00, but the Department raised demands for duty due to non-submission of the required certificate from the Drugs Controller to avail the exemption.The appellants submitted a classification list claiming exemption under Notification 234/86 for bulk drugs manufactured by them. However, the Department provisionally approved the classification list with duty at 15% ad valorem without extending the benefit of the notification. The appellants later applied for and received a certificate from the Drugs Controller confirming that their products qualified as bulk drugs under Notification 234/86. Despite this, the Department issued show cause notices for duty on bulk drugs cleared during specific periods, citing non-submission of the requisite certificate at the time of filing the classification list.The Tribunal noted that the benefit of Notification 234/86 was not claimed by the appellants in the relevant classification list approved by the Department. The Tribunal emphasized that the notification required the benefit to be claimed at the time of filing the classification list to enable the fixation of a period for producing the certificate from the Drugs Controller. As the appellants failed to claim the benefit in the classification list, the demands for duty were upheld by the lower authorities based on non-compliance with the notification requirements.Ultimately, the Tribunal upheld the orders of the lower authorities, stating that the demands were raised due to the appellants' failure to claim the exemption under Notification 234/86 at the time of filing the classification list. The Tribunal rejected the appeal, concluding that there was no justification to interfere with the impugned order, as the notification's conditions were not met by the appellants.In conclusion, the judgment focused on the procedural requirement of claiming the benefit of the exemption notification at the time of filing the classification list and upheld the duty demands due to the appellants' failure to comply with this condition, despite later obtaining the necessary certificate.