- (1.) These two appeals, by the assessee, arise from the order of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT), New Delhi in Appeal Nos. E/331/88-C and E/1329/89-C made on December 2, 1993.
(2.) The assessee manufactures, among other pharmaceutical formulations, Darzamol Injection I.V. under a licence granted to it by the Drug Controller, Tamil Nadu. Each millilitre of Darzamol contains Metronidazole (IP) 50 mg. in water for injection, IP made isotonic with Dextrose. The assessment years in question are 1982-1983 to 1984-1985. In the Assessment Year 1982-83, the assessee filed classification list 7/1982 claiming exemption under Notification No. 116/69, dated 3-5-1969, in respect of the said drug. The classification list was approved and exemption was allowed.
(3.) On the ground that during the course of verification it was noticed that Darzamol Injection I.V. contained Dextrose apart from Metronidazole and that the ingredient Dextrose was not a pharmaceutical necessity and also not therapeutically inert and, therefore, the assessee was not eligible for the benefit of exemption Notification 116/69, a show cause notice was issued to it on February 26, 1985. The notice, inter alia, stated that the assessee suppressed the fact that Darzamol Injection contained Dextrose and that it was not declared to the department with deliberate intention to evade the payment of duty by claiming exemption under Notification 116/69. The assessee was called upon to show cause why the exemption should not be withdrawn and the duty, particulars of which were given in the notice, should not be demanded; it was asked to produce along with the cause all evidence on which it intended to rely. The assessee replied to the said notice stating that Dextrose was a nutrient and it had no therapeutic properties and that it was used in the vehicle for injectable to make the solution isotonic; dextrose would not react with Metronidazole which was the only therapeutic agent in Darzamole Injection I.V. The assessee filed various documents in support of its contention. The Assistant Collector, having been satisfied with the reply given to the show cause notice, dropped the proceedings by order dated May 23, 1985.;