Excise exemption for patent medicines extended to exports where the notification contained no exclusion and conditions were met.

Notification No. 245/83 exempted patent and proprietary medicines from excise duty beyond the amount computed under the Drugs (Prices Control) Order, 1979, subject to a condition that exemption be claimed for all medicines covered by the price list. The notification was held not to be limited to home-consumption clearances and contained no express or implied exclusion for exports. As the manufacturer had claimed the benefit for all covered medicines, the exemption applied to exported goods as well, and the demand rejecting that benefit was unsustainable.

---

---

Issues: Whether Notification No. 245/83 granted exemption to patent and proprietary medicines cleared for export as well as for home consumption, and whether the manufacturer was entitled to the benefit of the notification in respect of exported goods.

Analysis: The notification exempted patent or proprietary medicines from excise duty in excess of the amount calculated on the basis of the retail price less 15% discount under the Drugs (Prices Control) Order, 1979, subject to the proviso that exemption be claimed in respect of all medicines cleared by the manufacturer and whose retail price was specified in the price list. The language of the notification did not confine its operation to clearances for home consumption, nor did it exclude exported goods. The condition in the proviso required the assessee to claim the exemption for all medicines covered by the price list, and the assessee had done so. Since there was no express or implied exclusion of export clearances, the demand based on denial of the notification for exported goods could not be sustained.

Conclusion: The assessee was entitled to the benefit of Notification No. 245/83 even for medicines cleared for export, and the demand was unsustainable.

---