2004 (10) TMI 402 - AT - Central Excise

Summary

Issues: Classification of products "Ethyl Chloride IP-100 ml and Anaesthetic Ether IP-500 ml" and availability of Modvat credit on inputs used.

Classification Issue Analysis:
The appeals revolve around the classification of "Ethyl Chloride IP-100 ml and Anaesthetic Ether IP-500 ml" and the availability of Modvat credit. The Asstt. Commissioner initially sought the opinion of the Deputy Director, Food & Drugs Administration, Indore, who classified the products as bulk drugs under Chapter 29. The Commissioner (Appeals) later reversed this classification without sufficient evidence to counter the expert opinion. The Tribunal found that the products are indeed bulk drugs classifiable under Chapter 29, sub-headings 2903.90 and 2909.00. The drug authorities also described these goods as 'Bulk Drugs' in their license, further supporting this classification. Therefore, the Commissioner's decision to classify the goods under Chapter Heading 30 was deemed incorrect.

Modvat Credit Issue Analysis:
Since the goods are classified as 'Bulk Drugs' under Chapter 29, the appellants are entitled to Modvat credit on the duty paid inputs used in manufacturing the products. The Tribunal set aside the Commissioner (Appeals) order and upheld the decision of the adjudicating authority. Consequently, the appeals of the appellants were allowed with any consequential relief permitted under the law.

In conclusion, the judgment by the Appellate Tribunal CESTAT, NEW DELHI addressed the classification issue of "Ethyl Chloride IP-100 ml and Anaesthetic Ether IP-500 ml" under Chapter 29, sub-headings 2903.90 and 2909.00, and the availability of Modvat credit on inputs used. The expert opinion supported the classification as bulk drugs under Chapter 29, leading to the reversal of the Commissioner (Appeals) decision to classify the goods under Chapter Heading 30. As a result, the appellants were granted Modvat credit on the duty paid inputs, and their appeals were allowed in accordance with the law.