Supreme Court has established that the composition of a product, rather than its medical application, determines its eligibility for exemption from excise duty. The ruling was issued in the case of 'Commissioner of Central Excise vs. M/s Denis Chem Lab Ltd. & Anr.', where the apex court deliberated on whether veterinary products were exempt from excise duty as "Intravenous Fluids."

The Court's observation was clear: the primary factor in determining exemption eligibility is the composition of the product, not its medical use. The specific case revolved around 'Calcium Borogluconate Injection (I.P.) (Vet.)' and 'Calcium Magnesium Borogluconate Injection (I.P.) (Vet.)', manufactured by M/s. Denis Chem Lab Ltd. The company claimed that the products fell within the ambit of "Intravenous Fluids" and therefore qualified for excise duty exemption.

The Revenue Department contended that the products were medicinal in nature due to the inclusion of certain compounds like boric acid and chlorocresol, which indicated potential antiseptic properties. Thus, they argued that the products did not qualify as "Intravenous Fluids" solely intended for replenishment, as per the exemption definition.

A bench comprising Justices B.V. Nagarathna and Ujjal Bhuyan examined the case and ruled that the essential criterion was the composition of the products. They highlighted that intravenous fluids consist primarily of substances such as sugar, electrolytes, and amino acids, making them crucial for sustaining life. The exemption's purpose is to ensure their affordability and accessibility for both humans and animals.

The court stressed that the primary test for exemption was to assess the product's composition and not its specific medical application. It was noted that even if certain additives were present in minimal amounts, they would not alter the product's character as a replenishment solution. The court also considered the license issued by the Food and Drugs Control Administration (FDCA), which indicated the products' composition centered on glucose and electrolytes for replenishment purposes.

In conclusion, the Supreme Court upheld the decision of the Customs Excise & Service Tax Appellate Tribunal (CESTAT) in favor of the manufacturer. The court dismissed the Revenue Department's appeal, affirming that the products in question indeed fell under the category of "Intravenous Fluids" as defined by the exemption notifications.

This judgment establishes a precedent for excise duty exemption eligibility based on composition, shedding light on the significance of the intrinsic nature of products rather than their medical application. The ruling ensures clarity and consistency in the interpretation of excise duty exemptions, emphasizing the essence of the products over their specific therapeutic use.