Sabyasachi Mukharji, J. - (1.) These are appelas under S. 35-L(b) of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act'), arising out of the order of the Tribunal, dated 26th November, 1987. The issue involved in the present case is whether the Acetic Anhydride manufactured by the respondent and sold to drug manufacturers i.e. M/s. IDPL is eligible to benefit of exemption under the notification No. 55/75 CE dated 1st March, 1975 as amended by the notification No. 62/78 CE dated 1-3-1978 as drug intermediate.
(2.) The respondent manufactured Acetic Anhydride falling under Tariff Item No. 68 of the Central Excise Tariff. It had filed refund claims for Rs. 1,57,442.08 and Rs. 1,14,587.74 being the duty paid on Acetic Anhydride during the period from 5-2-1981 to 28-6-1981 and from 23-7-1981 to 26-2-1982 contending that these goods were exempt from the payment of duty of excise leviable thereon under the notification referred to hereinbefore. It was contended that Acetic Anhydride is a drug intermediate and all such clearance for which the refund was claimed, had been made for delivery to the drug manufacturers. If drug intermediate is sold or supplied to a drug manufacturer then under the notification duty was not payable. The question, therefore, is, was the item manufactured by the petitioner, during the relevant period, a drug or an intermediate in terms of the notification.
(3.) It appears that the Assistant Collector of Central Excise by his adjudication had allowed the refund of Rs. 32,261.74 and Rs.87,932.40 out of the aforesaid claim of the respondent under Section 11-B(2) of the Act. The aforesaid orders of the Assistant Collector were challenged by the department by preferring appeals before the Collector of Central Excise (Appeals), Madras. The Collector (Appeals) allowed the appeals filed on behalf of the revenue and annulled the order of the Assistant Collector, Eluru, sanctioning sums of Rs. 35,261.74 and Rs. 87,943.40 respectively and directed that those amounts be returned to the department. Being aggrieved thereby, the respondent preferred appeals before the appellate Tribunal and the same were allowed. Hence, these appeals.;