Customs, Excise and Gold Tribunal - Delhi
Ranbaxy Laboratories Ltd. vs Commissioner Of C. Ex. on 9 July, 2003
Equivalent citations: 2003(160)ELT899(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. The appellants are manufacturers of bulk drugs. Some of the goods cleared by them on payment of duty were received back for reprocessing. They were accordingly, subjected to processes like milling, blending, sifting, washing etc. and chemical processes like solvent treatment when required and thereafter re-packed and cleared without payment of duty. Such re-processing is covered by Rule 173H of Central Excise Rules.
2. The bulk drugs are liable to duty under Chapter 29 of the Tariff. That Chapter contains Note 11 which states as under :-
'In relation to products of this Chapter, labelling or re-labelling of containers and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the Consumer, shall amount to "manufacture".'
3. The impugned order has held that in view of the above Chapter Note, the appellant was required to pay duty at the time of clearance of reprocessed bulk drugs. It is the contention of the appellant that the impugned order is erroneous and the issue remains covered in favour of the appellants by the decisions of this Tribunal in the case of Luster Print Media Ltd. v. Collector of Central Excise, Meerut [2000 (119) E.L.T. 662 (Trib.)] and Pepsi Foods Pvt. Ltd. v. CCE, New Delhi [2003 (154) E.L.T. 387 (T)] [Final Order 207/2002-D, dated 27-2-2003]. The learned Counsel further pointed out that the order of the Tribunal in the case of Pepsi Foods Pvt. Ltd. v. CCE, Chandigarh remains confirmed by the Supreme Court in view of the dismissal of Revenue's appeal against that order in Civil Appeal No. CAD 2515/2002, dated 10th February, 2003, The learned SDR has sought to distinguish these decisions on the ground that in the present case, the batch number, expiry date etc. of the bulk drugs has undergone change during the re-processing.
4. We are unable to find any merit in the impugned order, The case of M/s. Pepsi Foods Ltd. is identical to the appellant's case, inasmuch as defective goods were received by the manufacturer and cleared after re-processing under Rule 173H and this Tribunal held that the incidental re-packing, re-labelling etc. during re-processing of damaged goods would not attract a second levy of Central Excise duty in terms of a Chapter Note which makes re-packing, re-labelling etc........"manufacture". That decision in M/s. Pepsi Foods remains confirmed by the Apex Court. The acceptance of revenue's argument would have the effect of making repair, re-conditioning etc. excisable. That would be against the basic law that only production or manufacture of new goods attracts excise and not repair, re-processing etc. of already existing goods.
5. The appeal is allowed, following our previous decisions.