Commissioner, Central Excise & Service ... vs M/S Gujarat Medicraft Pvt.Ltd

Appeal No.E/760/2007-DB [Arising out of OIA No.105/2007(Ahd-I), dt.20.30.2007, passed by Commissioner (Appeals), Central Excise & Service Tax, Ahmedabad]

Commissioner, Central Excise & Service Tax, Ahmedabad-I Appellant

Vs

M/s Gujarat Medicraft Pvt.Ltd. Respondent

Represented by:

For Appellant: Shri S.K. Shukla, Authorised Representative For Respondent: Shri Hardik Modh, Advocate

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial) Honble Mr. P.M. Saleem, Member (Technical)

1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of Seen the order?

4. Whether order is to be circulated to the Departmental Yes authorities?

CORAM:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. P.M. SALEEM, MEMBER (TECHNICAL)

Date of Hearing/Decision:17.06.2015

Order No. A/10809 / 2015 dt.17.06.2015

Per: P.K. Das

The Revenue filed this appeal against the order of the Commissioner (Appeals), whereby the Adjudication order was set aside.

2. After hearing both the sides and on perusal of the records, we find that the Respondents cleared the Pharmaceutical items and paying duty on MRP under Section 4A of the Central Excise Act, 1944. The dispute relates to the clearance of free supplies to the wholesale dealers and the distributors, where they have not paid any Excise duty. The Adjudicating authority confirmed the demand of duty alongwith interest and imposed penalty of equal amount of duty. The Commissioner (Appeals) set aside the Adjudication order.

3. We find that the Commissioner (Appeals) passed the order following the decision of the Tribunal in the case of Vinayaka Mosquito Coil Manufacturing Co. Vs CCE Bangalore  2004 (107) ELT 107 (Tri-Bang). The Larger Bench of the Tribunal in the case of Indica Laboratories Pvt.Ltd Vs CCE Ahmedabad vide Final Order No.A/1141 & 1142/WZB/AHD/2007, dt.21.05.2007 which is reported at 2007 (213) ELT 20 (Tri-LB), held that the decision of the Tribunal in the case of Vinayaka Mosquito Coil Manufacturing Co. (supra) has not enunciated the correct position of law. It has been held that the sale is not the necessary condition for charging to Excise duty. Duty becomes payable (unless otherwise exempted) in respect of every removal of excisable goods.

4. In view of that, the impugned order cannot be sustained. The learned Advocate submits that there is no suppression of facts with intent to evade payment of duty and the issue is decided by the the Larger Bench and therefore, imposition of penalty under Section 11AC of Central Excise Act, 1944 cannot be sustained. He relied upon the decision of the Tribunal in the case of Espee Formulation Pvt.Ltd. Vs CCE Rajkot [2009 (241) ELT 120 (Tri-Ahmd)]. He further submits that the benefit of CENVAT Credit may be extended.

5. Accordingly, we set aside the order passed by the Commissioner (Appeals) and uphold the demand of duty alongwith interest and set aside the penalty. The Adjudicating authority is directed to re-quantify the demand of duty after allowing the CENVAT Credit after verification in accordance with law.

6. The appeal filed by the Revenue is allowed in the above terms.

(Dictated & Pronounced in Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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