Custom, Excise & Service Tax Tribunal
Cce, Bhopal vs M/S.Mount Mettur Pharmaceuticals Ltd on 14 March, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Court No.2
Appeal No.E/564/2005
(Arising out of OIA No.712-CE/BPL/2004 dt.27.10.2004 passed by CCE(A), Bhopal)
Date of Hearing/decision: 14.03.2013
CCE, Bhopal Appellant
Vs
M/s.Mount Mettur Pharmaceuticals Ltd. Respondent
Present for the Appellant: Shri M.S.Negi, DR Present for the Respondent: None Coram: Honble Mr.D.N.Panda, Judicial Member Honble Mr.Manmohan Singh, Technical Member FINAL ORDER NO. 55846/2013 PER: D.N.PANDA None present for the respondent nor is there any adjournment application.
2. Present appeal of Revenue is in the second round of litigation before Tribunal against appellate order on 27.10.2004. The precise question in the appeal of Revenue is whether dextrose present in Aneroid IV was pharmaceutical necessity and whether that was active and not interfering with the process to manufacture of final goods.
3. The issue above was first examined by Tribunal in the first round of litigation in E/427/86-C & 428/86-C and Appeal No.E/393/86-C disposed of on 6.2.1990. Direction was issued by the Tribunal to re-adjudicate the matter in the light of the decision in the case of May & Baker India Ltd. vs. Union of India-1989 (43) ELT 411 (Bom.). In para 16 of the order, it was categorical finding of the Tribunal that dextrose was admittedly present in the instant product as a pharmaceutical necessity. But no categorical evidence existed to show whether dextrose interferes or not with therapeutic or prophylactic activity of Metronidazole, an ingredient specified in the schedule appearing under Notification No.116/69 dated 3.5.1969.
4. When the matter went back to ld. Commissioner (Appeals) as per direction of the Tribunal, he considered the materials which were not before adjudicating authority at adjudication stage and following the judgement in the case of May & Baker India Ltd. vs. Union of India (supra) held that addition of the dextrose had no therapeutic or prophylactic activity of metronidazole an ingredient specified in the schedule referred in the exemption notification. He accordingly held that dextrose used in the formulation do not at all disentitle the respondent to the exemption under above notification.
5. Revenue being aggrieved by the order dated 27.10.2004 passed by Commissioner (Appeal) came in appeal in the present appeal.
6. Submission of the ld.DR today is that property of the ingredients was examined at the grass root level and elaborate discussion was made in the adjudication order. Ld. Adjudicating Authority came to the conclusion that dextrose interferes with the therapeutic property for which exemption is not permissible. He relied on the judgement of Apex Court in the case of T.N.Dadha Pharmaceuticals vs. CCE, Madras-2003 (152) ELT 251 (SC) to support that dextrose was not prescribed in the schedule appended to the notification. So also that is neither pharmaceutical necessity nor therapeutic inert and interferes with the therapeutic or prophylactic activity. Such finding denies the exemption following para 12 of the apex Court judgement which reads as under:
There can be no dispute that without any further drug Metronidazole is one of the ingredients of the drug which is entitled to the exemption under the said notification. But the notification qualifies the exemption by adding that if nay medicine contains any ingredient not specified in the schedule then the exemption will not apply unless the ingredients in the medicine are pharmaceutical necessities such as diluents, disintegrating agents, moistening agents, etc. The proviso to the notification says that such pharmaceutical necessity must be therapeutically inert and they should not interfere with the therapeutic or prophylactic activity of the ingredient or ingredients specified in the Schedule. The effect of this notification with regard to the drug in question, namely, Dextrose which is not specified in the Schedule, would be that if as an ingredient it is pharmaceutical necessity and therapeutically inert, it would satisfy the requirement of the exemption and, consequently, Metronidazone, which is one of the scheduled drugs, would be entitled to exemption. But if dextrose does not have any of those properties above stated, then it being one of the ingredients of Metronidazole the exemption under the notification will not be available.
7. We have heard Revenue and also perused the adjudication order as well as appellate order of ld. Commissioner (Appeal) Cunder challenge. It is factually clear that the ld.Commissioner (Appeals) had not gone through the apex courts judgment cited by ld.DR today which was delivered on 5.2.2003 while appellate order on remand was passed on 27.10.2004. When the Tribunal in para 16 of its order dated 6.2.1990 raised doubt for examining the evidence to establish whether dextrose interferes with therapeutic or prophylactic activity of Metronidazole, ld. Commissioner (Appeals) did not examine the basic evidence and also chemical report. But allowed the appeal of the respondent following the judgement of Honble Bombay High Court in the case of May & Baker India Ltd. vs. Union of India. We are not able to find any material evidence on record to notice that dextrose present in Aneroid IV was of pharmaceutical necessity and a therapeutic inert without interfering with the therapeutic or prophylactic activity. In absence of fulfilment of these two conditions reliance on technical evidence by the ld. Commissioner (Appeals) does not grant exemption benefit to the respondent under the strict condition of the aforesaid notification following the ratio laid down by the Apex Court.
8. In view of aforesaid observations and no evidence brought to record by the respondent, Revenue succeeds in appeal for which Revenues appeal is allowed.
(Dictated & pronounced in the open court) (D.N.PANDA) JUDICIAL MEMBER (MANMOHAN SINGH) TECHNICAL MEMBER mk ??
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