V.S.SIRPURKAR - (1.)This judgment shall govern two appeals, they being Appeal No. 91 of 2012 by M/s. Schott Glass India Pvt. Ltd. vs. CCI and Ors. and Appeal No. 92 of 2012 by M/s. Kapoor Glass (India) Pvt. Ltd. vs. M/s. Schott Glass India Pvt. Ltd.
(2.)This Appeal No. 91 of 2012 is filed on behalf of M/s. Schott Glass India Pvt. Ltd. (Appellant) against the order of Competition Commission of India (for short the 'CCI') whereby CCI has held the Appellant guilty of contravention of section 4 of the Competition Act (for short the "Act") and has inflicted a penalty of Rs.5.66 crore. It has also passed the cease and desist order to the following effect: - a) That Schott Glass India should desist from applying dissimilar conditions while giving discounts to Schott Kaisha vis -a -vis other Converters. b) The terms of transactions for supply of tubes to Schott Kaisha, the JV should be similar and non -discriminatory vis -a -vis the other Converters. c) The discount on both amber and clear tubes should not be contingent upon sale of each other. Schott Glass India Pvt. Ltd. ("Schott India") is a manufacturer of Neutral USP -1 borosilicate glass tubes which are made of borosilicate glass, a special type of glass having unique properties. Such glass tubes have low thermal expansion co -efficient and are highly resistant to chemical reaction, therefore are used to make glass ampoules, vials, cartridges, syringes, which are primary packaging material for liquid injectables and drugs by the pharmaceutical industry. The pharmaceutical companies generally specify the standards or quality/source for borosilicate glass tubes, which may be used to make glass tubes ampoules, since the molecules in liquid injectables tends to leach with the surface of the glass container in which they are stored over a period of time, which may result in a change in their chemical composition, in turn resulting in reduced potency. This may also result in discharge of alkali from the glass container into the medical solution which might pose significant safety related concerns for the patients being administered with the liquid drugs packed with such glass containers. Only such borosilicate glass tubes which conform to United States Pharmacopoeia -I standard, and, are neutral with alkali release of less than 1.0 ml. are recommended. The borosilicate glass can be amber or clear depending upon the drug which is to be stored in them. Some drugs require very low exposure to light and as such are packaged in amber borosilicate glass. In this appeal we are concerned with the glass tubes which are manufactured by the Appellant, which are then sold to the manufacturers of glass ampoules, vials, cartridges, syringes etc., which are in turn sold to pharmaceutical companies for storing drugs. The market of borosilicate glass tubes, thus is the upstream market whereas the market of ampoules, vials, cartridges, syringes etc. are in the downstream market. The Appellant, in Appeal No. 91 of 2012 is a wholly owned subsidiary of Schott Glaswerke Beteiligungs - GmbH, Germany ("Schott GmbH"). Schott GmbH is a wholly owned subsidiary of Schott AG, Mainz, Germany and thus Schott AG is the ultimate parent company of the Schott group.
(3.)As has been stated earlier the Appellant is engaged in the production of 'neutral USP -1 borosilicate glass tubes'. It is registered as a private limited company in the State of Maharashtra since December 1997. In January 1998 it acquired the assets of M/s. Bharat Glass Tubes. The Appellant manufactures two qualities of borosilicate glass tubes i.e. (i) Fiolax (in clear version) with alkali release of 0.38 ml of H2S040.02 N per 10g powered glass and (ii) basic Neutral Glass Clear (NGC) and Neutral Glass Amber (NGA) with certain specifications. We are more or less concerned in these appeals with NGC and NGA tubes which are produced exclusively for Indian market. Fiolax clear is produced for Indian market as well as for export.