Commissioner Of Central Excise, ... vs Sparsha Pharma International Pvt. Ltd

[Arising out of Order-in-Appeal No. 88/2012 dated 30/07/2012 passed by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad]

For approval and signature:

HON'BLE MRS. ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Commissioner of Central Excise, Customs and Service Tax Hyderabad-I Kendriya Shulk Bhavan, L.B Stadium Road, Basheerbagh, Hyderabad- 500 004 Andhra Pradesh Appellant(s)

Versus Sparsha Pharma International Pvt. Ltd. Survey No. 354, Muppireddypally Village, Toopran Mandal, Medak Dist. Andhra Pradesh Respondent(s)

Appearance:

Mr. S. K. Singh, DR For the Appellant

Mr. R. Raghavendra Rao, Consultant 101, Moon Rock Residency, Plot No. 205, Kalyan Nagar Phase-1, Hyderabad  500 038 For the Respondent

Date of Hearing: 07/07/2015 Date of Decision: 07/07/2015 CORAM:

HON'BLE MRS. ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 21685 / 2015

Being aggrieved with the order passed by Commissioner (Appeals) Revenue has filed the present appeal. I have heard Mr. S.K. Singh, DR appearing for the Revenue and Mr. R. Raghavendra Rao, Consultant appearing for the respondent.

2. The respondent is manufacturer of Fentanyl Transdermal Patches which contains narcotic drugs and as such do not fall under the Central Excise Tariff Act 1985. When the respondent started manufacturing the said product, which falls under the jurisdiction of the State Excise, they availed cenvat credit of Rs. 8,36,388/- (Rupees Eight Lakhs Thirty Six Thousand Three Hundred and Eighty Eight only) in respect of inputs and of Rs. 18,36,911/- (Rupees Eighteen Lakhs Thirty Six Thousand Nine Hundred and Eleven only) in respect of capital goods during the period 2008 to December 2010. However apart from the said product the respondents were also started manufacturing the excisable items.

3. The Revenue initiated proceedings against the respondent by way of issuance of a show-cause notice dated 11.04.2011 proposing to deny the cenvat credit in respect of capital goods as also the credit availed in respect of common inputs used in the manufacture of dutiable goods as also non-excisable goods, in terms of Rule 6(4) of the Cenvat Credit Rules. The said demands proposed in the notice were confirmed by the original adjudicating authority along with confirmation of interest and imposition of penalty.

4. On appeal against the above order, Commissioner (Appeals) upheld the denial of credit in respect of the inputs along with confirmation of interest. However as regards capital goods he observed that inasmuch as the same were used for manufacture of dutiable as also non-excisable goods, and were not exclusively used for exempted products, the credit would be available to them. As regards penalty he observed that the respondent during the relevant period was having registration and was filing ER-1 Returns classifying the non-excisable product. It was only later on, when they realized that the said product fell under State Excise Law, they reversed the credit on the inputs immediately as also in respect of a capital goods which was being used in the manufacture of the said products. As such there can be no suppression on the part of the assessee so as to impose any penalty upon them.

The said order of Commissioner (Appeals) is impugned before Tribunal.

5. Without going into the merits of the case, I find that the demand raised by the Revenue vide show-cause notice dated 11.04.2011 in respect of the credit availed during the period August 2008 to April 2009 is hopelessly barred by limitation. There is a lot of correspondence on record indicating that the respondent addressed RTI applications to find out as to whether the Fentanyl Transdermal Patches fell under the Central Excise Law or under State Excise. Initially they were filing ER-1 Returns and were reflecting the credit so availed by them. Vide their letter dated 06.11.2009, they brought the entire development to the knowledge of the Revenue and I note that it is only on the scrutiny of the ER-1 Returns the Revenue has made out a case against the respondent. Inasmuch as the demand admittedly stands raised by invoking the longer period of limitation, I hold the same to be barred by limitation. In view of the above, I find no merits in the Revenues appeal. The same is accordingly rejected.

(Order pronounced in open court)

(ARCHANA WADHWA) JUDICIAL MEMBER

iss