CIPLA LTD Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) The petitioner-company is a manufacturer of patent or proprietary medicines at its factory in Bangalore. Among the several products the petitioner manufactures Salbutamol Sulphate--(hereinafter referred to as 'SS') and also produces Benzyl Methyl Salicylate ('BMS'), which is an input which goes into the manufacture of the 'bulk-drug' salbutamol sulphate. 'BMS' manufactured by the petitioner-company is consumed in entirety in the manufacture of the said bulk-drug. It is also stated in the petition that 'BMS', which is a bulk drug intermediate is not used in the manufacture of any other drug and is used exclusively for the manufacture of 'salbutamol sulphate'. It is also the case of the petitioner that 'BMS' is not sold in the market either by the petitioner-company or any other company.

(2.) In the classification list filed by the petitioner-company during the years 1986-87, as per Annexures-B and B1, 'BMS' was shown in Col. 2 among 'other organic chemicals' produced by the petitioner-company and exemption was claimed in respect of the said chemical as 'non-excisable'.

(3.) Thereafter, two show cause notices were issued by the Superintendent of Central Excise, Hoskote Range, Bangalore-46 on 25.8.1987 (Annexures-'C' and 'D'), as to why 'BMS' should not be classified under the sub-heading 2942.00 and for the latter period under the sub-heading 2913.00. After an elaborate reply filed by the petitioner to the said notices and affording a personal hearing to the petitioner, an adjudication order was made by the Assistant Collector of Central Excise Cantonment Division on 25.2.1988, as per Annexure-G.