TaxTMI 
TaxTMI 
2003 (2) TMI 64
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.... that Darzamol Injection I.V. contained Dextrose apart from Metronidazole and that the ingredient Dextrose was not a pharmaceutical necessity and also not therapeutically inert and, therefore, the assessee was not eligible for the benefit of exemption Notification 116/69, a show cause notice was issued to it on February 26, 1985. The notice, inter alia, stated that the assessee suppressed the fact that Darzamol Injection contained Dextrose and that it was not declared to the department with deliberate intention to evade the payment of duty by claiming exemption under Notification 116/69. The assessee was called upon to show cause why the exemption should not be withdrawn and the duty, particulars of which were given in the notice, should not be demanded; it was asked to produce along with the cause all evidence on which it intended to rely. The assessee replied to the said notice stating that Dextrose was a nutrient and it had no therapeutic properties and that it was used in the vehicle for injectables to make the solution isotonic; dextrose would not react with Metronidazole which was the only therapeutic agent in Darzamole Injection I.V. The assessee filed various documents in s....
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....on to avert payment of duty by claiming exemption under Notification No. 116/69, dated 3-5-1969, in their classification list No. 7/82. The assessee was called upon to show cause why exemption granted under Notification No. 116/69 should not be withdrawn for the period from 12-7-82 to 11-10-84 and why the duty amount of Rs. 4,84,191.40 should not be demanded under proviso to sub-section (1) of Section 11-A of the Central Excise Act, 1944. 6.The assessee filed its reply to the said show-cause notice stating, inter alia, that the product Darzamol Injection (IV) had the following composition: "Each ml. contains Metronidazole I.P. 5 m.g. in water for injection I.P. made isotonic with Dextrose. Metronidazole I.P. is covered under Notification No.116/69 and the product Darzamol Injection I.V. was cleared without payment of excise duty." 7.It was denied that there was suppression of fact in regard to Dextrose; it was also denied that Dextrose was not declared to the department with deliberate intention to evade the payment of duty. The Collector, however, by his order dated October 28, 1987, withdrew the exemption granted to the assessee and upheld the demand. That order was chal....
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....e of the ingredients specified in the Schedule hereto annexed, from the whole of the duty of excise leviable thereon :- Nothing contained in paragraph 1 shall apply to any medicine which contains any ingredient not specified in the said Schedule unless the ingredients in the medicine are pharmaceutical necessities such as diluents, disintegrating agents, moistening agents, lubricants, buffering agents, stabilisers and preservatives : Provided that such pharmaceutical necessities are therapeutical1y inert and do not interfere with the therapeutic or prophylactic activity of the ingredient or ingredients specified in the Schedule. SCHEDULE 1 to 20. x x x x x x x x x 21. Metronidazole 22 to 30 x x x x x x x x 11.From a perusal of the notification, extracted above, it is clear that the exemption granted under the notification is in respect of patent or proprietary medicines falling under item No. 14E of the First Schedule to the Central Excise Act and containing one or more ingredients specified in the Schedule to the notification. 12.There can be no dispute that without any further drug Metronidazole is one of the ingredients of the drug which is entitled to the e....
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....r his agent, the provisions of this sub-section shall have effect, as if for the words "one year", the words "five years" were substituted." 15.A perusal of the proviso, extracted above, makes it clear that where duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Central Excise Act or of the rules made thereunder with intent to evade payment of duty by such person or agent, the period of limitation of one year in the main section is substituted by the words "five years". In other words, where the said proviso is attracted the duty etc. can be claimed even after expiry of one year for an extended period of five years from the date of the demand. To invoke the proviso three requirements have to be satisfied, namely, (1) that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded; (2) that such a short-levy or short-payment or erroneous refund is by reason of fraud, collusion or wilful mis-statement or suppression of facts or contravention of a....