2010 (4) TMI 627 - AT - Central Excise

SSI exemption under Notification No. 9/2002-C.E - manufacture of P&P medicines on their own account as well as on behalf of various loan licensees - appellant has cleared the goods manufactured on their account on payment of duty at 60% of normal rate of duty by availing SSI exemption - whereas they have paid duty at the full rate for the goods manufactured on behalf of the loan licensees Held that - exemption is available to all the clearances from a factory by a manufacturer or from a factory by a number of manufacturers. Once additional duty is paid on the goods with the brand name of others, the same are not required to be added with the value of clearances of the manufacturer.

Summary

Issues:
1. Interpretation of Notification No. 9/2002-C.E. regarding SSI exemption for P&P medicines.
2. Clubbing of clearances made by a manufacturer on their own account and on behalf of loan licensees.
3. Refund claim held up due to department's requirement of details of clearances under own brand name by other manufacturers.
4. Applicability of exemption when additional duty is paid on goods with the brand name of others.

Analysis:

1. The case involved the interpretation of Notification No. 9/2002-C.E. related to the availing of SSI exemption for P&P medicines. The appellant was engaged in manufacturing medicines on their own account and for loan licensees. They cleared goods at a reduced duty rate under the notification. However, a show cause notice was issued, proposing that the clearances made on their account and on behalf of loan licensees should be clubbed to calculate the aggregate value of clearances for certain financial years.

2. The Commissioner (Appeals) referred to previous Tribunal decisions and held that the full rate of duty paid on goods with the brand name of other manufacturers did not need to be added to the aggregate value of clearances. However, an observation was made that such clearances should be added to the aggregate value of clearances for the brand name owners. This observation led to the appellant's refund claim being held up as the department requested details of clearances under the appellant's own brand name by other manufacturers.

3. The appellant argued that the observation causing the hold-up of the refund claim was not in accordance with settled law or the issue before the Commissioner (Appeals). They cited relevant Tribunal decisions to support their claim. The notification allowed exemption for clearances from a factory by a manufacturer or multiple manufacturers, and goods with the brand name of others, when manufactured by the appellant, did not need to be included in the value of clearances.

4. The Tribunal found merit in the appellant's arguments and set aside the observation causing the hold-up of the refund claim. It was clarified that since all goods were manufactured by the appellant, the exemption had to be considered based on that fact. The issue of considering the value of clearances for brand name owners did not arise in this case. Consequently, the appeal was allowed, and the appellant's position regarding the refund claim was upheld.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision, providing a comprehensive overview of the legal proceedings and outcome.