1.The appellants are manufacturers of a chemical, Sodium Bisulphite.
One of the uses of this chemical is in the manufacture of 'Analgin' which is a pain relieving drug. It is the claim of the appellants that sodium bisulphite manufactured by them, which falls under Item No. 68 of the Central Excise Tariff Schedule, is eligible for duty exemption as a drug intermediate in terms of Notification No. 55/75, dated 1-3-75 as amended by Notification No. 62/78, dated 1-3-1978. The lower authorities disallowed the claim for exemption. The Collector of Central Excise (Appeals), Bombay, by his impugned order dated 1-8-1981, held that the predominant use of sodium bisulphite was for purposes other than manufacture of drugs and that even when it is used in the manufacture of drugs, its use did not seem to be as a drug intermediate. On this basis, he rejected the appeals.
2. Against the Order of the Collector (Appeals), the appellants filed a single revision application to the Central Government which on the setting'up of this Tribunal has come to it in terms of Section 35-P of the Central Excises and Salt Act, 1944, to be disposed of as if it were an appeal filed before the Tribunal. Later on, in accordance with the requirements of this Tribunal, the appellants filed 2 supplementary appeals since there were 3 separate appeals disposed of by the Collector (Appeals) although by a single consolidated Order and, originally, only one revision application had been filed.
3. Before us, it was contended by Dr. P.M. Pitke, Junior Research & Development Manager of the appellant company, that sodium bisulphite should be properly held to be drug intermediate in the manufacture of the drug analgin. He relied upon certain decisions in revision of the Government of India in support of his contention. He also relied upon certificates issued by the Drug Control authorities of Gujarat and Tamil Nadu. Shri S.N. Khanna, Departmental Representative, on behalf of the Respondent, opposed the appeals.
4. We have had several occasions in the past to consider the eligibility of several substances for exemption as drug intermediates in terms of the notification cited. According to the diagramatic representation of the chemical reactions involved in the manufacture of analgin, it is clear that sodium bisulphite (NaHSOa) contributes to the structure of analgin which is represented by the following formula.
It is evident that its use is not as an aid to the chemical reactions taking place as is the case with some substances like reducing agents, catalysts, etc. It contributes to the very structure of the drug in a substantial measure. Apart from this, there is the evidence produced by the appellants in the shape of a certificate from Joint State Drugs Controller, Tamil Nadu, stating that sodium bisulphite is used in the manufacture of analgin I.P., a drug. There is also a certificate issued by the Drugs Control Administration, Ahmedabad, certifying the use of sodium bisulphite as a drug intermediate in the manufacture of analgin.
It is also relevant to note that the "Merck Index" lists, inter alia, medicinal uses of sodium bisulphite. The substance is shown as used externally for parasitic skin diseases, as G.I. Antiseptic. Shri Khanna had contended that sodium bisulphite is not used directly in the manufacture of analgin but indirectly. We see from "Merck Index" that a substance called "Melubrin'' is prepared by warming aminoantipyrinc with sodium bisulfite in formaldehyde solution. Analgin is prepared by methylating the ainino group of Melubrin, then treating with formaldehyde sodium bisulfite solution. It is interesting to note that even the intermediate product "Melubrin" is shown in the "Merck Index" as an antipyretic and analgesic. Analgin is also an antipyretic and analgesic.
5. Taking the cumulative effect of what is stated above, there is little doubt that sodium bisulphite qualifies for duty exemption as a drug intermediate in terms of Notification No. 55/75 read with 62/78.
6. In the result, we allow the appeals. The Assistant Collector shall grant consequential relief to the appellants to the extent the appellants satisfy him with evidence about the actual use of sodium bisulphite in the manufacture of the drug.