Customs, Excise and Gold Tribunal - Delhi
Unique Pharmaceutical Labs vs Collector Of Customs on 6 June, 1984
Equivalent citations: 1984(18)ELT106(TRI-DEL)
ORDER G. Sankaran, Member (T)
1. The captioned appeal was initially filed as a Revision Application before the Central Govt. which, under Section 35-P of the Central Excises and Salt Act, 1944, has come as transferred proceedings to this Tribunal, for disposal as if it were an appeal filed before it.
2. The facts of the case, briefly stated, are that the appellants are manufacturers of lfimycin injection containing 'Chloramphenicol'. The composition of the product is stated to be :-
Chloramphenicol I.P. : 125 mg. Lignocaine Hydrochloride : 10 mg. Prophylene Glycol USP : q.s. Chlorocresol I.P. : 0.1%
The appellants claim that Chloramphenicol is the only active ingredient in the product, the other ingredients being merely pharmaceutical necessities which are therapeutically inert and do not interfere with the therapeutic and prophylactic activity of chloramphenicol. The product is used to cure diseases like typhoid and the curative effect is attributable to chloramphenicol. The appellants, therefore, claimed that the product was eligible for concessional assessment in terms of Serial No. 14 of the schedule to Central Excise Notification No. 116/69, dated 3rd May, 1969. The Assistant Collector was of the view that Lignocaine Hydrochloride, a local anaesthetic, present in the injection, could not be considered as therapeutically inert though it might not interfere with the therapeutic efficiency of chloramphenicol. On this reasoning, he denied the benefit of the said notification and ordered assessment of the product at 121/2% ad valorem without the benefit of the notification.
The matter was pursued in appeal before the Appellate Collector, Bombay but without success and hence the present appeal.
3. The appeal was posted for hearing on 29th May, 1984. However, none represented the appellants in the Court. They, however, chose to write a letter dated 18th May, 1984 in response to the notice of hearing that they would not be attending the hearing. They requested that the matter might be decided on merits on the basis of the written submissions in the revision application. We had, therefore, no option but to hear the Senior Departmental Representative (which we did oh 30th May, 1984) and decide the case.
4. In the revision application, it is stated that the action of lignocaine hydrochloride is to minimise the pain at the site of injection by anaesthesing the surrounding tissue. This action does not amount to a therapeutic one but is in the nature of aiding the administration of the injection. It is only a pharmaceutical necessity. Chloramphenicol can also be administered without lignocaine hydrochloride ; the latter is only added as a pain reliever and local anaesthetic. Reliance was placed on a certificate issued by the Commissioner of Food & Drug Administration, Maharashtra State which supports the above contention. The Appellate Collector has given no reasons for ignoring or not considering the said certificate. That Lignocaine hydrochloride may have therapeutic value in other situations. (Cardiac irritability, ventricular arrhythmias following cardiac infaction, during cardiac catheterisation, open heart surgery etc.) is not relevant in the present case. The Appellate Collector's order only amounts to confirmation of the order of the Assistant Collector which, in terms, confirmed the Superintendent's order of 3-12-1976. The Superintendent, however, proceeded to demand short-levied duty based only on his endorsement on the subsequent returns Without issuing separate show cause notices in this behalf. These demands ar e, therefore, time-barred.
5. The SDR supported the impugned order for the reasons stated therein.
6. We have carefully considered the submissions. "McGraw Hill Dictionary of Scientific & Technical Terms" has this to say :
Lignocaine (see lidocaine)--C14H22N2O is a crystalline compound, used as a local anaesthetic.
The Condensed Chemical Dictionary by Hessner G. Hawley also shows the use of lidocaine as local anaesthetic in medicine. There is no dispute about the role of lignocaine in the subject product, namely, that it functions as a local anaesthetic.
7. However, the action and use of lignocaine hydrochloride are shown in the British Pharmacopoeia as local anaesthetic and anti-arrhythmic. It is shown as used in the treatment of cardiac arrhythmias by intravenous injection. It is, therefore, not correct to say that lignocaine has no therapeutic activity or that it is therapeutically inert. It may be that in the present case, it is the anaesthetic property that comes into play and not its therapeutic property. It may also be that it does not interfere with the therapeutic or prophylactic activity of chloramphenicol. However, a careful reading of Central Excise Notification No. 116/69, dated 3rd May, 1969 shows that the added ingredient should be a diluent, disintegrating agent, moistening agent, lubricant, buffering agent, stabilizer or preservative or should be a pharmaceutical necessity similar to the aforesaid categories in order that the preparation containing the added ingredient may be eligible for the duty concession in the notification. Lignocaine hydrochloride which, in the subject chloramphenicol injection, acts as a local anaesthetic, does not belong to any of these or like categories.
8. The certificate by the Commissioner, Food & Drug Administration, Maharashtra State, (the certificate is not on record but has been reproduced in the Revision Application) is to the effect that the added ingredients serve as pharmaceutical necessities such as diluent preservative, local anaesthetic (as the case may be) and such pharmaceutical necessities are therapeutically inert and do not interfere with the therapeutic or prophylactic activity of chloram-phenicol. It is seen that the Commissioner has added 'anaesthetic', along with diluent, preservative etc. mentioned in the notification. For one thing, 'anaesthetic' is not mentioned in the notification and, for another, it is not a category similar to the specified categories such as diluent, preservative etc.
9. In the result, we hold that the benefit of Notification No. 116/69, dated 3rd May, 1969 was correctly denied by the lower authorities. The impugned order is upheld and the appeal is rejected.
10. The appellants have referred to certain demands issued to them in respect of periods subsequent to those covered by the original proceedings which has led to the present appeal. These subsequent demands do not form part of the present proceedings and, as such, we are not passing any orders in respect of those demands.