M/S Panacea Biotec Ltd vs Cce & St, Chandigarh Ii

[Arising out of the Order-in-Original No. 75/CE/CHD-II/2013 dated 29/11/2013 passed by The Commissioner of Central Excise, Chandigarh  II.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would 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 the order?

4. Whether order is to be circulated to the :

Department Authorities?

M/s Panacea Biotec Ltd. Appellant

Versus

CCE & ST, Chandigarh  II Respondent

Appearance

Shri T.R. Rastogi, Advocate  for the appellant.

Shri R.K. Grover, Authorized Representative (DR)  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52883/2015 Dated : 14/09/2015

Per. Ashok Jindal :-

The appellant is in appeal against the impugned order.

2. The facts of the case are that the appellant is engaged in manufacture of P&P Medicaments and they are availing Cenvat credit on inputs, input services and capital goods. In their factory compound, another factory is located in the name of M/s Panheber Biotec Pvt. Ltd. who is manufacturing the vaccine which attracts nil rate of duty which was bought by the appellant and thereafter distributed to their various units located at various locations for manufacture of medicine. As the appellant has entered the vaccine manufactured by M/s Panheber Biotec Pvt. Ltd. in their RG-1 register, therefore, during the course of audit it was revealed that appellant is the manufacturer of an exempted good and the appellant is also not maintaining separate statutory records for Cenvat credit for exempted as well as dutiable final product. In that case, the appellant is required to pay an amount equal to 10% of the value of the exempted goods. In these set of facts, the proceedings were initiated against the appellant which were converted into the impugned order. Aggrieved from the said order, the appellant is before us.

3. Learned Counsel for the appellant submits that the appellant is not manufacturer of vaccine which is an exempted product. At the time of receipt of said vaccine from M/s Panheber Biotec Pvt. Ltd. the appellant wrongly entered these receipt in their RG-1 register which has been clarified in their second reply to the show cause notice alongwith relevant documents, the proceedings are not sustainable against the appellant. He further submits that the appellant is not having even a drug license to manufacture this vaccine in their factory at all, therefore, question of manufacturing these vaccine (which was exempted from duty) does not arise. The said facts were brought in the knowledge of the Adjudicating Authority and the Adjudicating Authority has not considered the same and passed the impugned order. He further submits that the appellant is having the case on other issues also.

4. On the other hand, learned AR drew our attention to the impugned order and as per agreement, the appellant is required to formulate, fill, package and sale the finished vaccine in the market. Therefore, the appellant is manufacture of vaccine which is an exempted product. In these set of facts the impugned order has been passed correctly.

5. Heard the parties considered the submissions.

6. In this case the claim of the appellant is that they are not the manufacturer of vaccine which is an exempted product. In fact same is manufactured by M/s Panheber Biotec Pvt. Ltd. a separate legal entity located in the same factory compound. This fact is required to be ascertained by verifying whether M/s Panheber Biotec Pvt. Ltd. is a separate entity and manufacturer of vaccine only. The fact that whether the appellant is manufacturer of vaccine or not is also to be verified, which the lower authority has failed to do so. In these circumstances, the impugned order does not deserve any merits. Accordingly, the same is set aside and the matter is remanded back to the Adjudicating Authority first to ascertain whether appellant is manufacturer of vaccine, in question, which is duty free or not and thereafter to pass an appropriate order in accordance with law after consideration of the issues raised by the appellant in their defence by affording reasonable opportunity to the appellant. The appeal is disposed of in the above terms.

(Operative part of the order pronounced in the open court.)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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