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CX - Merely by adding excipient, medicine which has a character of basic drug does not get altered – benefit of notfn. 4/2006-CE cannot be denied: CESTAT

By TIOL News Service

MUMBAI, FEB 13, 2018: THIS is a Revenue appeal filed in the year 2009.

The fact of the case is that the respondents have claimed exemption notification no. 4/2006-CE dated 01.03.2006 vide Sr. No. 47 in respect of their final product namely Natural Micronised Progesterone under the name "Sugest".

The case of the department is that as per Sr. No. 47 of 4/2006-CE and List 3 of Sr. No. 58 in notification 21/2002-Cus, the product covered under exemption is "Natural Micronised Progesterone" tablet whereas the respondent's product consist of various ingredients namely Lactose N-Ex, Maize Starch, Sodium Starch Glycolate N-Ex, B- Cyclodextrin N-Ex, Aerosil (Colloidal Silicon Di-oxide) N-Ex, Carbomer940N-Ex, Sodium Bicarbonate, Methyl Paraben, Glycerine Iso-Propyl Alcohol, Magnesium Stearate N-Ex, Talc and Adipic Acid.

Therefore, since the product is not Natural Micronised Progesterone alone, the benefit of exemption notification is not available.

However, the Commissioner(A) disagreed with the said stand taken by the department and, therefore, Revenue is in appeal.

The AR reiterated the view taken by the department.

The Bench observed that as per the exemption entry the drug and medicine both are exempted.

Furthermore,

+ Drug contains only one ingredient i.e. basic drug whereas any medicine which is manufactured out of a drug invariably consists of other ingredients which is normally form of excipient.

+ Merely by adding the excipient, the medicine which has character of basic drug does not get altered. Therefore, only by adding excipient the exemption cannot be denied, in the facts of the present case.

+ From the packing of the product it can be seen that the product sold is Natural Micronised Progesterone. Therefore, even though it contains various other excipients, the medicine is clearly covered under Sr. No. 58 of the list 3 of notification 21/2002-Cus. Therefore, it is eligible for exemption notification No.4/2006-CE.

Upholding the order of the Commissioner(A), the Revenue appeal was rejected.

(See 2018-TIOL-532-CESTAT-MUM)


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