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TMI Blog2004 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... cable rate of interest. (ii) Show Cause Notice No. V(30)3-2/C-III/IIA/2002/2524 : (a) confirming a duty demand of 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 item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; The extended period for raising the demand, under the proviso to Section 11A of the Act, was invocable, as (i) the appellant had suppressed the fact that Ciprofloxacin, Metronidazole and Tinidazole were Schedule 'H' drugs for the treatment of specific ailments, and had not supplied the labels thereof with the classification list filed by it, and (ii) the appellant had wrongfully claimed the benefit of exemption from duty under Notification No. 36/2000. (iii) Reliance was placed, in the show cause notice, on "Remington's Practice of Pharmacy" and the statement dated 26-5-2001 of Shri Vinod Kumar, Managing Director, of the appellant-company. 4.The Commissioner passed an order dated 24-9-2002 ex parte and confirmed the duty demanded under the three show cause notices mentioned above. The appellants 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 ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numbers (iv) and (v) were not eligible for the benefit of exemption notification. Thereafter the Commissioner concluded that the entities in question were in the nature of fluids mentioned at serial no. (v) of Remington's Practice of Pharmacology and would not be eligible to the benefit of the exemption notification. On consideration of this aspect it is found that Ramington's Practice of Pharmacy (Chapter 88 Pages 1549 and 1550) which are reproduced in Paragraph 27 of the impugned order and are as follows : "(A) It has been estimated that 40% of all drugs administered in hospitals are given in the form of injections and their use is increasing. Part of this increase in parenteral therapy is due to the wider use of intravenous fluids (IV Fluids). In the last decade, the use of I.V. Fluids has doubled, increasing from 150 million units to 320 million units annually. Not only do I.V. fluids continue to serve as the means for fluids replenishment, electrolyte balance 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been recorded in Para 20 of the impugned order question especially the following : "In this connection, it is informed that any I.V. Fluids does not lose its basic character of I.V. fluids simply by adding to it any medicament. In your case, adding of either ciprofloxacin with dextrose, ciprofloxacin with sodium chloride, metronidazole with dextrose, metronidazole with sodium chloride tinidazole with sodium chloride and mannitol is covered under definition of intravenous fluids for which you have been given licence in Form No. 28D. The route of administration of these products are through intravenous hence the said products come under intravenous infusion." (Emphasis supplied) This certification, by an Expert, relied upon by the appellants, goes to prove that addition of any of the alleged substances, in addition to the dextrose and sodium chloride, etc., as essential ingredients of I.V. fluids does not render the effectiveness of the basic character of I.V. fluids, e.g. if fluid, electrolyte replacement supplementation. In any case, no material contrary to this certification of the entity in question being IV fluid serving its purpose of fluid replacement has been brought o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wherever use of fluid replenishment or electrolyte or sugar replenishment was not the purpose of an infusion fluid being manufactured and ever the intended and actual products was different, the appellants have paid the duty on such items. The entities under dispute, now, are such where the intended use of sugar, electrolyte fluid replenishment is the intended use, the additional subsidiary use, may be as for the anti-bacterial or other medicinal properties induced by use of small quantities by admixture of ciprofloxacin, etc. That itself would not render the intended use ineffective. The learned Senior Counsel relies upon the decision in the case of Union of India v. Tata Iron and Steel Co. Ltd., Jamshedpur - 1977 (1) E.L.T. (J 61) (S.C.) wherein the Apex Court examining the case independently under the Central Excise law had held as follows : The"23. High Court rightly held that the contention of the Revenue fails on two broad grounds. First, there cannot be double taxation on the same article. Counsel for the revenue gave the example of excise duty on motor cars, in spite of the fact that there was duty on tyres and duty on metal sheets. The analogy is misplaced. In such case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of would show that the Apex Court in that case had noted the finding of the Tribunal that 'no proof was shown that such blended yarn was known as polypropylene in the commercial parlance and came to deny the benefit. In the present case, the letter of Food and Drugs Administration authorities who approve the products impugned for sale and marketing for commercial and therapeutic use indicates that there is material available in the present case to arrive at the 'commercial and market understanding of the entity in question. The Circular dated 2-3-2001, of the Form-Fill Seal Association relied upon in the proceedings, would only indicate an understanding of the Association as regards their understanding of the language used in the interpretation of the notification. The Association's interpretation cannot be binding, since that is not even an advise of a man trained in law to be considered to be binding in any manner. The Commissioner has stalled the production of the material by defence of material evidences of understanding of the entities in question by Experts. Thereafter to find force in the arguments placed and the decision as relied upon by the Revenue would not be called or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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