Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Aaron Pharmaceuticals Pvt. Ltd. on 8 February, 1990
Equivalent citations: 1990(29)ECC58, 1990(47)ELT475(TRI-DEL)
ORDER
G. Sankaran, Senior Vice-President
1. The only issue arising for determination in the present appeal is whether the product called Idometrin Suspension manufactured by the respondents qualified for exemption from Central Excise duty in terms of Central Excise Notification No. 116/69 dated 3-5-1969. The Assistant Collector found against the respondents and while the Collector (Appeals) found in their favour and hence the present appeal by the Collector of Central Excise, Bombay-I.
2. Notification No. 116/69-CE dated 3-5-1969 exempts patent and proprietary medicines falling under Item No. 14E of the First Schedule to the Central Excises and Salt Act and containing one or more of the ingredients specified in the Schedule to the notification from the whole of the duty of excise leviable thereon. The exemption shall not apply to any medicine which contains any ingredient not specified in the said Schedule unless the ingredients are pharmaceutical necessities such as diluents, disintegrating agents, moistening agents, lubricants, buffering agents, stabilisers and preservatives. There is a proviso that such pharmaceutical necessities are therapeutically inert and do not interfere with the therapeutic or prophylactic activity of the ingredient or ingredients specified in the Schedule.
3. Amongst the substances specified in the Schedule to the above-mentioned notification are Di-Iodohydroxyquinoline and Metronidazole. The subject product contains, in addition to Di-Iodohydroxyquinoline, Metronidazole Benzoate. The Assistant Collector has held that since Metronidazole Benzoate is not the same thing as Metronidazole and is not specified in the Schedule to the notification unlike in the case of certain other substances, as for example, chloramphenicol (in respect of which its esters for oral and parenteral use have also been specified), the benefit of the notification would not be available. The Collector (Appeals), on the other hand, has held, accepting the respondent's contention, that Metronidazole Benzoate has been used as an ingredient in the preparation to make it palatable to children, and decided the issue in favour of the respondents.
4. We have heard Shri A.S. Sunder Rajan, DR, for the appellant Collector and Shri R.K. Srivastava, Consultant, for the respondents.
5. While Shri Sunder Rajan contends that the Collector's reasoning is not correct, Shri Srivastava relies on the Bombay High Court's judgment in May & Baker (India) Limited v. Union of India 1989 (43) ELT 411 (Bom.) The case before the High Court was in respect of the preparation called Flagyl containing metronidazole as such and not its ester. The discussion centred round the role of calcium carbonate in the preparation. The judgment is, therefore, of no assistance to the respondents in the present case. However, we must note that the obvious purpose of the notification in question is to exempt from excise duty certain medicines containing one or more of the ingredients specified in the notification. Metronidazole is one such specified ingredient. If, in the place of Metronidazole as such, it is introduced in the preparation as an ester, namely, its benzoate, in order to make the preparation palatable to children, there is no reason why the benefit of the notification should be denied to the preparation. After all, the active ingredient, along with Di-iodohydroxyquinoline, continues to be metronidazole although, for the sake of making the preparation palatable to children (this contention of the respondents has not been rebutted by the Revenue) its benzoate has been used. In this connection the pharmacopoeia of India (The Indian Pharmacopoeia), Volume -I has the following passages at pages 319-320 :-
"Metronidazole Category: Anti-amoebic; antirichomonal; anti-giar-
dial.
Dose: For trichomoniasis, 200 mg three times
daily, for 7 days.
For amoebiasis, 400 mg three times daily,
for 5 to 10 days.
For giardiasis, 2 g daily for three successive
days for adults, 1 g for children and 400 mg
daily for infants.
Description: White or cream-coloured crystalline pow-
der; odour, slight; taste, bitter and slightly
saline.
Metronidazole Benzoate
Category: Anti-amoebic.
Dose: For amoebic dysentry, the equivalent of
400 mg of metronidazole three times, daily,
for 5 to 10 days.
Note: 200 mg of Metronidazole Benzoate
is approximately equivalent to 125 mg of
metronidazole.
Description: White or cream-coloured crystalline pow-
der; odourless; almost tasteless."
From the above, it may be seen that the benzoate ester of metronidazole is also indicated as an anti-amoebic. The dosage of the benzoate for amoebic dysentry is indicated as the equivalent of 400 mg of metronidazole three times, daily, for 5 to 10 days and it has been further indicated that 200 mg of metronidazole benzoate is approximately equivalent to 125 mg of metronidazole. The dosage of metronidazole is also indicated as 400 mg three times daily, for 5 to 10 days. The passage further indicates that while metronidazole is bitter, its benzoate is almost tasteless. All these bear out the respondents' contention that the benzoate ester has been used to make the preparation acceptable to children and that the active role is played by metronidazole. The fact that in respect of certain ingredients like chloramphenicol, esters or other derivatives have been specified would not mean that if, in respect of metronidazole, its ester has not been specified, the ester would, for that reason alone, be disqualified from the benefit of the notification. The question is whether the specified ingredient, namely, metronidazole, is present in the preparation. The answer is that it is present in the form of its ester, namely, benzoate. It is settled law that exemption notifications should not be construed in such a way as to defeat their very purpose. In this view of the matter, we do not find any infirmity in the impugned order. We uphold the same and dismiss the present appeal.
6. The so-called cross-objection is not maintainable since it is not directed against any part of the impugned order and the only 'relief sought is that the Collector's order should be confirmed. It is dismissed accordingly.