Custom, Excise & Service Tax Tribunal
M/S. Natco Pharma Ltd vs Cce, Hyderabad on 9 March, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - SMB
Court I
Date of Hearing:09/03/2012
Date of decision:09/03/2012
Appeal No.E/2051/2010
(Arising out of Order-in-Appeal No.05/2010(H-III)(D)CE dt. 28/05/2010 passed by CCE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
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 should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s. Natco Pharma Ltd.
..Appellant(s)
Vs.
CCE, Hyderabad
..Respondent(s)
Appearance Ms. Neetu James, Advocate for the appellant.
Mr. Ganesh Haavanur, Addl. Commissioner for the Revenue.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) FINAL ORDER No._______________________ On a perusal of the records and hearing both sides, I note that the impugned demand of duty arises out of denial of CENVAT credit on certain input (printed aluminium foils) which was supplied by M/s.Danna Laminates Ltd. (DLL) and received in the appellants factory and used in the manufacture of P or P medicaments during the period from December, 2005 to October, 2008. The demand is on the ground that M/s. DLL did not undertake any manufacturing activity and hence should not have paid duty on printed aluminium foils and consequently credit of such duty was not admissible to the appellant. As rightly pointed out by the learned counsel, an analogous factual position was considered by this Bench and a similar demand of duty was set aside in the case of M/s. Treadsdirect Ltd. vide Final Order Nos.935 & 936/2011 dt. 23/12/2011 in appeal Nos.E/1882 & 1883/2010. Para 2 of the said Final Order is reproduced below:-
2. After hearing both sides, I note that it is not in dispute that the job worker paid duty on the job-worked goods supplied to the appellant and that such goods were further processed by the appellant to manufacture their final product. Again it is not in dispute that the inputs supplied by the job worker were covered by a valid document prescribed for availment of CENVAT credit. The benefit cannot be denied to the appellant on the ground that the job worker should not have paid duty on the goods. The respondent has no case that the duty paid by the job worker was refunded to them. The lower appellate authority does not appear to have applied its mind to the Tribunals decision in Kwality Biscuits Limited vs. Commisisoner - 2006 (205) ELT 669 (Tri.-Bang.) wherein it was held that MODVAT credit of duty paid on input packing charges was not liable to be denied to the assessee on the ground that such charges were not includable in the assessable value of the goods. In the cited case, it was found that the input supplier chose to pay duty on the packing charges also and that input was used by the assessee in or in relation to manufacture of their final product. The appellant has placed on record a few other decisions also viz. Indian Oil Corporation Limited vs. Commissioner - 2006 (206) ELT 533 (Tri.-Bang.), Commissioner vs. MDS Switchgear Ltd. - 2008 (229) ELT 485 (SC), Commissioner vs. Hylite Cables - 2007 (212) ELT 284 (Tri.-Ahmed.), etc. The ratio of these decisions is that any duty actually paid (whether or not payable) on input which has been received in the factory of the manufacturer of final product and used in or in relation to manufacture of the final product must be allowed as MODVAT/CENVAT credit to be utilized for payment of duty on the final product. It also emerges from the cited decisions that questions like whether the input is dutiable, whether any element of cost is includable in the assessable value of the input etc. cannot be agitated at the end of manufacturer of the final product. In the result, the impugned order is set aside and these appeals are allowed.
2. I have heard the learned Superintendent(AR) also who has fairly acknowledged that the facts of this case are similar to the facts of the aforesaid case. However, she points that proceedings were initiated against M/s. DLL for denying CENVAT credit on certain inputs which were used in the process of slitting of jumbo sized aluminium foils into smaller sizes and printing thereon, which process, according to the Department, did not amount to manufacture. It is submitted that the dispute between the Department and M/s. DLL is yet to be adjudicated upon. In any case, the excisability of printed aluminium foils at the end of M/s. DLL remains unsettled and can have no bearing on the present issue.
3. Following the cited decision, I set aside the demand and allow this appeal.
( Pronounced and dictated in open court ) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 3