In a recent case, the Supreme Court of India held that the manufacture of veterinary products which fall under the category of ‘intravenous fluid’ was eligible for exempt from excise duty under exemption notification.
Denis Chemical Lab Ltd, the respondent was engaged in the manufacture of Boric Acid and Chlorocresol and the purpose of the product was for the treatment of veterinary diseases such as milk fever, Tetany, liver damage, etc.
The revenue filed an appeal against the order passed by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) for confirming the eligibility of exemption from excise duty to the assessee.
Siddhant Kohli, the counsel for the revenue contended that if an intravenous fluid was used for sugar, electrolyte, or fluid replenishment and the composition of the product was such that it was used only for replenishment and not for any other purpose, then the benefit of exemption would be allowed.
Further submitted that the assessee would not be used the goods for fluid replenishment per se but it is like a medicinal product, which was administered to animals such as cattle through the medium of intravenous fluids.
Lakshmikumaran, the counsel for the respondent/assessee contended that Calcium Borogluconate and Calcium Magnesium Borogluconate are considered sources of electrolytes and these were part of intravenous fluids, which were essential products for which exemption was provided under the Notification.
Also submitted was that the CESTAT held that the respondents/assessee was eligible for exemption, as claimed, and therefore the consequential reliefs and the benefits under the said notifications were granted.
The Court observed that CESTAT was justified in holding that the respondents/assessee was entitled to the benefit of exemption as per the Notifications.
The two-member bench comprising B.V. Nagarathna and Ujjal Bhuyan upheld the decision of CESTAT and held that the respondent/assessee was eligible for exemption from excise duty under exemption notification while dismissing the appeal filed by the revenue.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
