TMI Blog2004 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 97,68,855/- on the appellants under Section 11A(1) of the Act; (b) imposing a penalty of Rs. 97,68,855/- on the appellants, under Rule 173Q of the Rules; and (c) payment of applicable rate of interest. (iii) Show Cause Notice No. V(30)3-55/C-III/IIA/2002 : (a) confirming a duty demand of Rs. 57,59,223/- on the appellants under Section 11A(1) of the Act; (b) imposing of a penalty of Rs. 10 lakhs under Rule 25 of the Rules; and (c) payment of applicable rate of interest. 2.The appellants are engaged in the manufacture of intravenous infusions of various kinds, which besides the fluids may include certain medicines having anti-bacterial, antibiotic and antimicrobial properties. The issues in this case relate to one of the following items added to the fluids - (a) Ciprofloxacin I.P. (b) Metronidazole I.P. (c) PDZOLE-D (d) Ciprodex (e) Tinipidi Isotonic Infusion, and (f) Mannitol I.P. 3.A perusal of the show cause notices indicates that they proceed on the basis that : (i) the IV fluids containing Ciprofloxacin I.P., or Metronidazole I.P., or PDZOLE-D, or Ciprode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants challenged this order before the Hon'ble High Court of Madhya Pradesh Bench at Indore, who vide order dated 24-1-2002 directed the Commissioner to dispose of the applications preferred by the appellants for setting aside of the ex parte order expeditiously. However, the Commissioner vide his letter dated 29-11-2002 refused to set aside the ex parte order. The appellants therefore filed a writ petition challenging the direction issued vide its letter dated 29-11-2002 and the Hon'ble High Court was pleased to quash the order passed by the Commissioner and directed the Commissioner to hear the matter on merits. The appellants had also filed Appeal No. 3949 of 2002 in the Tribunal and was withdrawn on 27-7-2003 on the High Court having quashed the order rendering these appeals infructuous. 5.Pursuant to the order quashing of the order by the Hon'ble High Court which was confirmed by the Division Bench vide order dated 8-4-2003, the Commissioner fixed a hearing. However, after accepting the request made by the appellant to bring any expert evidence of persons qualified in the field of pharmacology so as to demonstrate that the products in question were 'IV fluids' and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance restoration and supplementary nutrition, but they also are playing major role as vehicles for administration of other drug substances and in total parenteral nutrition (TPN). Intravenous fluids are finding greater use as the means of reducing the irritation potential of the drugs and the desirability for continuous and intermittent drug therapy. (B) Large volume injections intended to be administered by Intravenous infusions commonly are called I.V. Fluids and are included in the group of sterile products referred to as large volume pareterals. These consist of single dose injections having a volume of 100 ml or more and containing no added substances. (C) Intravenous Fluids are sterile solutions of simple chemicals such as sugar, amino acids or electrolytes-materials which easily can be carried by the circulatory system and assimilated. (D) Intravenous Fluids commonly are used for a number of clinical conditions. These include - (i) Correction of disturbances in electrolyte balance (ii) Correction of disturbances in body fluids (fluid replacement) (iii) The means of providing basic nutrition (iv) The basis for the pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Deputy Director of the Food and Drug Administration's letter, the only expert opinion relied, in the order of the learned Commissioner, indicates that the I.V. fluids with dextrose, sodium chloride or mannitol would be serving the intending functions of "use for sugar electrolyte fluid replenishment" in the body of a patient and that the drugs e.g. ciprofloxacin; which are added, may serve an additional function of medicinal or therapeutic value to fluid replenishment functions the purpose and intent for which the 'IV fluids' were being offered to patients. No patient would be given a litre or more of a fluid the packing as in this case with Glucose etc. if the intent was only to inject a drug. The patients who do not need fluid replenishment cannot and will not be given such infusions to carry the drug. Notification No. 36/2000, dated 4-5-2000 at serial No. 47A exempt 'IV fluids' without any qualification. Notification No. 3/2001, dated 1-3-2001 at Serial No. 56 reads "IV fluids which are used for sugar, electrolyte or fluid replenishment." The Board's clarification relied upon by the Commissioner cannot be read to interpret that the later notification and the earlier notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 30/60 grants exemption to duty paid pig iron. The High Court rightly said that the Notification does not say that exemption is granted only when duty paid pig iron is used and that the exemption would not be available if duty paid pig iron is mixed with other non-duty paid materials. If the intention of the Government were to exclude the exemption to duty paid pig iron when mixed with other materials then the notification would have used the expression "only" or "exclusively" or "entirely" in regard to duty paid pig iron. The object of the notification was to grant relief by exempting duty paid pig iron." (Emphasis supplied) The reliance is well placed and following the same, exemption under the notification in the present case cannot be denied. (d) The Apex Court have held it is well settled law, that there is no room for reading any intendment. Regard must be had to the clear meaning of the words used. The entire matter is governed wholly by a language of a notification. It has been laid "if the tax payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exemption authority [see 1978 (2) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 1-3-2001 would only curtail the ambit of the exemption only to disallow small volume parenterals, which were permissible under the earlier notifications broader entry. The emphasis in both the notifications is on method and administration by intravenous route fluid sugar electrolyte requirements of a patient and not on the composition thereof as is being made out by Revenue. (g) The interpretations on the Remington's Practice of Pharmacy as placed by Revenue cannot lead to a conclusion that it does not permit addition of a particular antibiotic or a drug. In fact it relates to also permits and covers the use and additions of entities in multidrug formulation. This view has been supported by the other technical literature relied upon by the appellants as they refer to the notice. (h) The allegation that additives Ciprofloxacin, Tenidazole and Metronidazole are covered by DPCO (Drugs Price Control Order) and therefore essential drugs and not IV fluids also cannot be upheld since Dextrose IV fluids is also covered by DPCO. A price control order surely cannot be used to rely upon an interpretation of the said notification when there is no direct/indirect referen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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