Custom, Excise & Service Tax Tribunal
M/S. Inga Laboratories P. Ltd vs Commissioner Of Central Excise, Mumbai ... on 27 January, 2017
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/1543/06
(Arising out Order-in- Appeal No. BR/24/M-IV/06 dated 24.02.2006 passed by the Commissioner of Central Excise (Appeals), Mumbai IV)
For approval and signature:
Honble Shri Ramesh Nair, Member (Judicial)
1. Whether Press Reporters may be allowed to see No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
M/s. Inga Laboratories P. Ltd.
Appellant
Vs.
Commissioner of Central Excise, Mumbai IV
Respondent
Appearance:
Shri Sachin Chitnis, Advocate for the appellant Shri Ashutosh Nath, AC (AR) for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Date of hearing : 30.09.2016 Date of decision : 27.01.2017 O R D E R No: ..
Per: Ramesh Nair The appellants are engaged in the manufacture of medicaments falling under Chapter heading 30.03. Certain medicaments viz. Di-carb-100, Dicarb-150, Quininga tablets, quininga injection, dobinga injection, Logout tablets, Logout SR, Cygest 100, Cygest 200 are exempted from payment of duty under notification no. 6/2002-CE dated 01.03.2002.
2. The appellant availed credit on some common input namely Methyl parabene, propyl parabene, microcrystalline cellulose, lactose etc. which were used as excipient. They availed credit based on account maintained in the form of Bin card. They reversed proportionate credit of such excipient used in the manufacture of exempted medicaments. The adjudicating authority confirmed the demand for an amount of 8% of the value of the exempted goods on the ground that the appellant have not followed the procedure as laid down in Rule 6(2) of Cenvat Credit Rules inasmuch they have not maintained the separate account. Therefore, the only option is to pay 8% of the value of the goods. Being aggrieved by the adjudication order, the appellant filed appeal before the Commissioner (Appeals) wherein the Commissioner (Appeals) upheld the demand and penalty of equivalent amount. However, rest of the demand of penalty was set aside. Being aggrieved by the impugned order the appellant is before me.
3. Shri Sachin Chitnis, ld. counsel for the appellant submits that it is wrong to say that the appellant have not been maintaining separate account. It is admitted fact that product being medicaments each and every batch record is maintained in the form of Bin card. Therefore on that basis only the proportionate credit was reversed. Accordingly, the appellants have correctly followed the procedure as laid down under Rule 57CC of the Central Excise Rules, 1944 and 6(2) of Cenvat Credit Rules, 2004. He submits that once the proportionate cenvat credit has been reversed it is as good as non-availment of credit. Therefore, further demand of 8% is not legal and proper. In support, he placed reliance on the following judgment.
1) Wonderax Laboratories 2005 (186) ELT 427 (Tri) , approved by the Delhi High Court in 2010 (255) ELT 60 (Del) and approved by the Supreme Court in 2010 (255) ELT A-16 (SC).
2) Mahindra & Mahindra 2006 (201) ELT 27 (Tri)
4. Shri Ashutosh Nath, AC (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.
5. I have carefully considered the submissions made by both sides. I find that there is no dispute that the appellant have suo moto reversed the cenvat credit attributable to the common inputs used in the manufacture of exempted goods. As regards the maintenance of separate records, it is admitted fact that the product being a medicament, it is a statutory requirement to maintain the batch records which the appellant is maintaining. They are also maintaining Bin cards for the consumption of the inputs. On the basis of that record, the appellants have been reversing the credit proportionate to the inputs used in the exempted goods. Therefore, I do not find anything wrong in following the procedure of reversing the proportionate credit by the appellant. I therefore, modify the impugned order and allow the appeal.
(Pronounced in Court on ..............................) (Ramesh Nair) Member (Judicial) //SR
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