Custom, Excise & Service Tax Tribunal
Commisioner ,Central Excise And ... vs Cipla Ltd on 17 October, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 85065 of 2018
(Arising out of Order-in-Appeal No. PUN-CT-APPII-000-217-17-18 dated 05.10.2017 passed
by the Commissioner (Appeals) Central Tax, Pune-II.)
Commissioner, Central Excise and .... Appellant
Service Tax, Pune-II
41-A, ICE House, Sasson Road,
Opp. Wadia college, Pune-411 001.
VERSUS
Cipla Ltd .... Respondent
D-7, MIDC, Kurkumbh, Tal. Daund, Pune, Maharashtra-413 802.
APPEARANCE:
Shri Rajiv Ranjan, Authorized Representative for the appellant Ms. Payal Nahar, Advocate for the Revenue CORAM:
HON'BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) HON'BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL) FINAL ORDER NO. A/86747/2025 Date of Hearing: 17.10.2025 Date of Decision: 17.10.2025 Per: S.K. MOHANTY Heard both sides and perused the case records.
2. Briefly stated, the facts of the case are that the respondents are engaged inter alia, in the manufacture of Bulk Drugs/Formulations, falling under Chapter 29 and 30 of the First Schedule to the Central Excise Tariff Act, 1985. The respondents avail CENVAT Credit of Central Excise duty paid on the inputs and service tax paid on the input services, and utilize such CENVAT Credit for clearance of the final products from their factory premises. In addition to manufacturing the said final products on their own, the respondents also undertake the manufacturing activities on behalf of the job workers. In case of manufacture of medicaments under job work, the respondents also use the inputs procured by them, on which CENVAT Credit was taken by them. Since the job work charges were received by the 2 Excise Appeal No. 85065 of 2018 respondent as per the commercial invoices issued by them, the department had interpreted that those inputs on which CENVAT benefit was availed by the respondent were to be treated as removal 'as such' from the factory and as per the provisions of Rule 3(5) of CENVAT Credit Rules, 2004, they were required to reverse the equivalent amount of CENVAT Credit availed on those inputs. On the basis of such understanding, show cause proceedings were initiated against the respondents, which were confirmed in the original order passed by the department. On appeal against the original order dated 25.01.2017, the learned Commissioner (Appeals) has set aside the said order and allowed the appeal in favour of the respondents. In support of allowing the appeal, the learned Commissioner (Appeals) has relied upon the Final order No. A/87354-87356/17/SMB dated 24.03.2017 passed by this Tribunal in the case of respondent's other manufacturing unit.
3. It is an admitted fact on record that the CENVAT Credit availed inputs were used by the respondents for manufacture of the final products on job work basis and the said inputs were not removed as such to the principal manufacturer. Since, the inputs were very much available in the factory premises of the respondents and have been used in the manufacture of final products, in our considered view, the provisions of Rule 3(5) of the Rules of 2004 shall not be applicable for payment of equivalent amount of CENVAT Credit taken on the inputs inasmuch as the said rule has the application only in the eventuality, when the CENVAT availed inputs/capital goods are removed as such from the factory and not otherwise. We find that analysing the factual matrix of the case vis-à-vis the statutory provisions, the Co-ordinate bench of this Tribunal in the case of the respondent's other manufacturing unit, vide order dated 24.03.2017 has allowed the appeal, holding that the respondents were not required to reverse the CENVAT Credit in terms of the said Rules.
4. In view of the foregoing discussions, we do not find any infirmity in the impugned order passed by the learned Commissioner (Appeals) and accordingly, dismiss the appeal filed by Revenue.
(Dictated and pronounced in open court) (S.K. MOHANTY) MEMBER (JUDICIAL) (M.M. PARTHIBAN) MEMBER (TECHNICAL) SM