Customs, Excise and Gold Tribunal - Delhi
Bezel Pharma (P) Ltd. vs Collector Of Central Excise on 9 October, 1998
Equivalent citations: 1999(106)ELT323(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. The appellants have sent a letter, dated 16-6-1997 briefly summerising their pleas and requesting that the case may be decided in their absence on the basis of their written submissions. Accordingly we have gone through the records and heard ld. SDR. In the written submissions, briefly, the appellants have mainly stated in their written submission that the appellants are engaged in the manufacture of pharmaceutical products falling under Chapter 30. In addition to their own branded products, they manufacture branded pharmaceutical products of other persons in their factory on loan licence basis. Their factory is an undertaking registered with the Director of Industries, Maharashtra as a small scale industry under the Industries (Development and Regulation) Act, 1951.
2. During the years 1986-87 and 1987-88 they were manufacturing Zoacide-V tablets using Miconazole Nitrate and Newmycin Sulphate as ingredients, Decanazole cream using Miconazole Nitrate as ingredient, and Es-tolin in Syrup and tablet forms using Erythromycin Estolate as ingredient, among several pharmaceutical products manufactured in their factory. Zoacide-V tablet and Dacanazole cream were classifiable under sub-heading 3003.19 and Estolin was classifiable under sub-heading 3003.11 of Chapter 30 of the Schedule to the Central Excise Tariff Act, 1985 as it stood during the years 1986-87 and 1987-88.
3. Patent or proprietary medicaments falling under sub-heading 3003.19 and manufactured using Neomycin and Miconazole as ingredients were exempted from the whole of the duty or excise leviable thereon as per Notification No. 122/86-C.E., dated 1st March, 1986. The Notification No. 455/86-C.E., dated 21st November, 1986 and Finance Ministry's letter No. B-27/43/86/TRU, dated 25-11-1986 substituted Neomycin with Neomycin Sulphate and Miconazole with Miconazole Nitrate, since Miconazole and Neomycin were active and could be used in formulation only in their salt forms. Medicaments using Erythromycin, its salts and esters as ingredient were liable to nil rate of duty as per the entry against sub-heading 3003.11 of Chapter 30. They had claimed exemption for Zoacide-V tablets and Decanazole cream under Notification 122/86 (as amended) and for Estolin with the Tariff sub-heading 3003.11, and cleared these goods during the years 1986-87 and 1987-88 without payment of duty.
4. A show cause notice issued by Superintendent seeking to deny exemption on Estolin on the ground that the ingredient used for this formulation, Erythromycin Estolate, was a salt cum ester of Erythromycin which was not specified in the tariff entry below sub-heading 3003.11 was adjudicated by the Assistant Collector and the show cause notice was withdrawn in his speaking order, dated 15-3-1988. The same issue was reopened by his successor without bringing out any new facts on record and without obtaining higher appellate authority's sanction for reopening the case in a manner known to law, and a demand was confirmed in his speaking order, dated 14-8-1991.
5. The Collector (Appeals) rejected their appeal and upheld the decision of the Assistant Collector. In his order, dated 12-2-1992, the Collector (Appeals) ignored the illegality pointed out by us in opening of an issue already decided by the predecessor without bringing out any new facts on record.
6. Ld. DR drew attention towards the impugned Order and reiterated the department's view point emphasizing that the ingredients used for the manufacture of Eutolin Dry Syrup and Eutolin Tablets are however salts cum Easters of Erythromycin which is not specified in Chapter 3003.11 all the notification are effective from the date on which they have issued. In this case Notification No. 455/86, dated 21-11-1986 is effective from 21-11-1986 and retrospective effect is not mentioned in the said Notification.
7. We have considered the above submissions. We find that Heading 3003.11 reads as follows :-
3003.11 - Quinine and its salts, Totaquina and Nil Cinchona Febrifuge; Dapsone; Isoniazid;
Para-amino-sali-cylic Acid and its salts;
Insulin, all types; Iodochlorohydroxy-
quinoline, Dioda-hydroxy-quinoline and salts of Emeting; Ethionamide; Cycloserine and Cycloserine Tartrate; Pyrazinamide;
Thiacetazone, Chlorahydroxyquinoline, Morphazinamide; Hydrochloride; Dehydroemetine Dihydrochloride; Chloromphenicol and its esters for oral and parenteral use; Penicillin and Streptomycin including Dihydrostreptomycin in their pure form or as salts or as derivatives and intended for oral or parenteral use; Ethambutol Hydrochloride (Tibutol); Chloroquin Phosphate;
Amodiaquine Hydrochloride; Clofazimine; Tolbutamide (oral anti-diabetic); Metronidazole; Diethyl carbamazine citrate; Piperazine and its salts;
Rifampicin; Tetracycline Hydrochloride; Chloroquine diphosphate; Doxycycline, its salts and esters;
Erythromycin, its salts and esters; Mebendazole.
It is clear from the above that Erythromycin and its salts and esters are explicit- ly covered by this heading. They are therefore required to be classified & charged nil rate of duty accordingly.
8. So far as Notification No. 122/86 (as amended by 455/86) is concerned we observe that the amendment is apparently clarificatory. This view finds support from the Ministry's letter, dated 25-11-1996 (supra). In view of the above position the impugned Orders are set aside and the appeal is accepted as already announced in the open Court.