Karnataka High Court
Commissioenr Of Central Excise vs M/S Himalaya Drug Company on 28 February, 2011
Bench: N.Kumar, Ravi Malimath
... 1 .,,
IN THE HIGH COURT OF KARNATAKA AT BANGALQRE
DATED T§*iIS THEE 28m DAY OF FEBRUARY 2011
PRESENT
THE i-§OE\i'Bi.E MR. JUSTICE N.KUMA§?{""--. j ,: _
AME)
THE i-£ON'Bi.E MRJUSTICE RAVE 1'
CEA,N0.5 0F"2_Qg3._§'
BETWEEN: ' ' '
Commissiener of Cent__rai Exci_s_;e »v.__
Cemmissionerate-IIIU "
Quee:*:§'R0a:¢i, ' -
Bang3_Iore--V5'5{}..Qfi1.V. "~..___ « I MAPPELLANT
(By S:'i M,'V,Cha'nd":9§a'si§é'%<%éré Raddy, Advocate)
.....
ru g Co m pa ray " ._f\*'.-'afkaE'iv,."F1,,1n:1§u'f Road, :t<;3:*1ga:_c;.re.':_~_~.T562 123. HRESPONEDENT (By §Sfi'j§f.Lakshmi Kurraaran, Advocate) 2<>§<s;< is This CEA filed under $ecil<::n 356 of the Central Excise Act, 1944 arising Gut ef Order dated :23-6.-200? passed in Final Order Ne.?S8/2&0? in Appeal No.8?f6,./_2'£}_(J6, praying to declée the substantial questlen ef la.w".sL'tated therein and set aside the Final Order Ne.?S8_.j"2OG,?--...:flel:ed% 13.6.2007 passed by the CESTAT in Appeal N---.7.8?6,i_ZOG{§._"'_* "
This CE/ix coming on -'Eczif--.hez:i:rir;§erijisv._Tda"y<,2 MKUMAR3"dmh@fimthefim@wmgg_ } 3uQemENfF_* This afilleal is the ercler passed by the TrlAt2£_i.rf§';al..V there is no requéremenfiief':A:'...l§'ayfiqe;%;";0f.:_"é:%."'e--fV~'iAthe grlce on the exempteeiillthe assessee has not mai niéei nee »aeeeLs__nts.'.
2-. - %"%l"i'a--:=.a,=VV ".a':s_1V.«:A..;e's.ll':s__e :e=«_:l..4H/s. Himalaya Drug Cemparay, ere. _manijfa§itm:e~rsA"v_bf" Ayurvedic: Medécaments and Ceslfnetllcsvl.Awhéc:h'lfe'i'ls under the Central Excise 'Tariff Act, "§;§1e:*e availing CENVAT credit on inputs as lpreeédedllfilflgldler Sectien 57AB el' the Central Excise Rules, W44 _{h1erei;':efte:* {eferred to as the Ruies fer Shfift).
3. E,
3. De verification of the records it was observed that they were avaiiieg CENVAT <:ree:iit on comreerg:'i'nputs used in the manufacture of both dutiahie arid exempted geetis and whiie using SUCH §y?1~-;ju"E:§:'*ft)i' tn~e_ "~ manufacture of exempted goods,"they';{vere'1'reife-r5Viif"§'Vthe proportionate CENVAT Credit i_nvoi\iedi"ori suc:o'iri'.i.i.rj;i>LJ'i:s_'=~: A;ieie'V.t E7A.D of the erstwhiie Centreiifiicise RLe.es', §;94'z; atria Rafe 6 of the CENVAT cregiiteeeui~é'§'V%::eo;f2~oo2 provioes that in case the asseseee cioeehot accounts of inputs used; a""<:.'>"Eii.";*nahufar:~ti.:re~ dutiabie finished goods anti the goods do not come withihvv the ":?trfi"'e~::fitiorieCi in the said Rules, it is incemheht thetah"'e'ri1o"ehtsequivaient to 8% of the price of th»e;'e'xempte'tfi.. cieared has to be paie. The above prVoce&u«r*e:'*n;as not foiiowed by the assessee. Accusing ._t'h'ehfi"'et"'.e_oe.ti<a'venihg Ruie 57AD read with Rake 6 of the CEENVAT' ~f':i*es:;iEt Rates a Show cause notice came to be ..is:eeed'*'on 1-r:'iw2OQ4 asking them te Show cause as to why "",_V3R's;<858,§3.,488/~ being 8% ef the eréee ef the exempted , 1/ goods cieared by the assessee during the period from August, 290% te May, 2032, sheuid net be den1e4n.d'ie.dn.e_nd recovered in accerdanee with iaw, The respo_z;:_:d'e'r§§%_'V§i:i_ed;___a« _ reeiy contending that when inputsmwere rer=a~:e§Ee.d fforn thew eemmen input record and the same;-weireA'rsr.ec:orded'f-3,37 tithe other relevant records, the.»CENVA'?*.credit :aveiVVi:e:d_V.Von_i'§ inputs were reversed immedieiteity. the time of purchase of such _inputs to be used for exempted g_o0dsv_w.a:.S_ hence aii the inputs woohj oneV"s'e'g;rister and CENVAT credit woziu-id. on earmarking the <:on1rh_on__."eVV>ren1pted geods. The said inputs 'werei exempted goods register and r.:.red'ét eve§ied._V_i5ras reversed. Therefore they contended «thee fiwere not iiabie to pay the amount demanded in notice, After enquiry the demand in the ehew .::e'u-ere was eenfirreed with penaity and interest. The e,.<;_$eesee preferred an aepeai before the Tribuhai. The "'~,_VTrie':Lseai eiiewed the armed? and remanded the matter E z , ': E / "s.-2 /' .. 5 ., back to the original autherity for consideration as per the principfes of nature! justice and on such remand .:;;r:d on the basis of the records an ameuni: df confirmed and eeriaity was aiso imdosed. the said drder, again the assesslgzeie':preVfe.rred: §r:_uaVi:s';§'eei} The Tribune! heid that the peymeritdwddid as per Rdie 5?At:> of the Ru§e'sve:'c:'a}§'s.weii. (Ab) or we (6) of CENVA"i".,,§:red~iit"" ._aAndfi"'"there is no requirement for paymeriti exempted fine! products. at ail the period of by the said Order the revenue is iri Vé':;_pea'iwii _4. 'i"~.He'ard'V~_t?§e»'ieemed counsel appearing for the .....
the materiai on record it is clear that mesa' the assessee énitiaily took credit cf the comn*~idn«;_ir1pets used in the manufacture of both dutiabie A drid"~«exempted goods they have reversed the credit awaited ¥ __ 5 ..
on the inputs used in the manufacture of exempted finai products.
6. The {earned counsei appearing..._'4<'_fe'feffthe respondent poéets Gut that the ameedmyeht..,:eaé7§*ie'd% eet_ V' from time to time prevides fer payArAher§t..Vo'f_8%-- inputs used fer exempted gdeds ahd therefoteg Coh1te'ndS--..y that when ence the assesseefied ave'§!edAf;Eh§*~{;tt":i; credit and after the amount' of th.e"'yat.ueflE;f._ the 'deeds used for exempted goods if aseeiftaihtedt it that they have reversed theh:?ed1'it ehtry eeIy«.Vi'hvt":;~eVVfa}?es the goods used for h1aVhtu'fa:eturfh?g"' Therefore they submitted._thatVVth'e«.eehte~dt;.ens ef the revenue that merely because the" .aSses--.see"V has not maintained separate aa':¢}Guh.ts he isitideabf-e«'to pay duty on the entire value of the =géee<'is7v-iti£h~sus--tainab{e. The Tribunai after considering the i.;'a'r"Eous_ }'u5_gE:hents on which reiiaece was pieced has came te th~e"eencEuséon that the essessee would not be covered A A.bVy""ET§.uEe 57AG of the Ruies read with subwfimle 3 ef Rate 6 ef the eerwm" Creeit Ruies. "there is he iéehiiéty fer 1/ payment of 8% of the price 9?' the exempted finai preducts as CENVAT credit avaiied has been reversed and they did mt have the benefit of the said cmdit.
7. Therefore we do not see any infirmiijafini tihieieraiyeir which is passed by the T§:"i"IZ')"L>}Ti':,"3.E 'i/j'JE'1i:i';;H :".CE3i:§i'S.:';1%'? interference. Accordingly we do ii<:_>t"-see ariy n"~:e2<it:."
substantiai questions sf' iavii 'e,sif.e~..ans\iVv.e~re(3--..i§j'v_:féiA\gifiiVi;é:*' {if the assessee and against stifie reye'r'.ai'§3; Imcoreiiingliyiityiae appeai is dismissed.
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