Excise duty exemption in respect of formulations of Artemisinin-CBEC clarifies in a private letter

By Vijay Kumar

Entry No. 22 in List 1 of Notification No. 4/2006-CE dated 1.3.2006 exempts "Arteether or formulation of Artemisinin" from excise duty.

Doubts have been raised as to whether this entry covers other formulations of Artemisinin besides Artheether.

Representations received from the trade as well as from field formations suggest that divergent practices are being followed in the matter. Trade has also represented that Artemisinin is a bulk drug as well as mother drug used for the manufacture of other derivatives including Arteether. Accordingly, all the formulations of Artemisinin would qualify for exemption under the notification. However, the wordings of the entry are creating unnecessary doubt in the mind of field officers and excise duty exemption is being denied to other derivatives of Artemisinin in some field formations.

The Board has examined the matter and conveys, “In 2000-2001 budget, E-Mal (Alpha-beta Arteether) was fully exempted from excise duty and the existing entry read as "E-Mal (Alpha-beta Artheether)". In 2001-2002 budget, the existing entry was amended and was substituted with "Arteether or formulation of Artemisinin". The intention was to provide the benefit of the exemption notification to all formulations of Arteminisin including Artheether.

In view of this Board clarifies that notification No. 4/2006-CE dated 1st March, 2006, entry no.22 in List 1 covers all formulations of Artemisinin including Artheether and its scope is not confined to the latter.

Such an important clarification is conveyed through a private letter. God knows who will communicate this to the Trade!

There is an old school of judicial thinking with which the bureaucrats may not agree that the intention of the notification is immaterial and nothing can be read into a notification. Why can't the Board incorporate this clarification into the Notification itself at least to avoid weighty Audit Objections?

CBEC F. No. 332/26/2008- TRU Dated: August 12, 2008