2015 (10) TMI 1355 - AT - Central Excise

Imposition of penalty - Assessee supplied the raw material to the loan licencee/job workers - They have paid the duty on the cost of raw materials and conversion charges - - Held that - Commissioner observed that though by majority, it was held by the Tribunal that the actual processor of the goods was the manufacturer and that the duty demanded on the price at which the raw material supplier sold the goods, was not sustainable, the Department has filed a Civil Appeal before Hon ble Supreme Court. The Adjudicating authority proceeded on the basis of the minority view of the said decision. We find that the Hon ble Supreme Court upheld the majority view in the case of M/s Cosme Farma Laboratories Ltd (2015 (4) TMI 355 - SUPREME COURT). - facts of the present case are identical to the case of Cosme Farma Laboratories Ltd (supra). Hence, the impugned order passed by the Commissioner cannot be sustained - Decided in favour of assessee.

Summary

Issues:
- Demand of Central Excise Duty along with interest and penalty on the Appellants.
- Jurisdiction, limitation, and merit of the case.
- Application of previous judgments by Hon'ble Supreme Court and Tribunal in similar cases.
- Assessment of the role of job workers and raw material supplier in the manufacturing process.

Analysis:
1. The appeals involved a common order addressing the demand of Central Excise Duty, interest, and penalties on the Appellants. The case revolved around M/s Intas Pharmaceuticals Ltd supplying raw materials to loan licensees/job workers for manufacturing Medicaments. The duty payment method changed post-2003 based on the M/s Ujagar Prints formula following a Board circular.

2. A Show Cause Notice was issued proposing duty demand, interest, and penalties on M/s IPL and job workers. The Adjudication order confirmed duty demand, interest, and penalties, citing the payment basis change post-2003. The Appellants contested the demand on jurisdiction, limitation, and merit grounds, referencing previous judgments favoring them.

3. The Appellants argued that the issue was settled in their favor by the Hon'ble Supreme Court and Tribunal in similar cases. They emphasized no intent to evade duty payment, questioned the Adjudicating authority's jurisdiction over job workers in different states, and submitted a compilation of case laws to support their stance.

4. The Revenue's representative countered, highlighting differences in the present case compared to the judgments cited by the Appellants. They pointed out M/s IPL's significant involvement in providing raw materials, staff, premises, and control over job workers, contrary to the Appellants' claims.

5. After considering both sides and reviewing the records, the Tribunal found the issue no longer res integra due to the Hon'ble Supreme Court's decision in a similar case. The Tribunal referenced a majority decision in a related case, emphasizing the job worker's control and responsibility in the manufacturing process.

6. The Commissioner's order was deemed unsustainable as the facts mirrored the case decided by the Hon'ble Supreme Court. The Court clarified the assessable value calculation for manufacturers, leading to the set aside of the impugned order and allowing all appeals filed by the Appellants with consequential relief.

This detailed analysis of the judgment outlines the key issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's decision based on the facts and applicable laws.