2016 (12) TMI 911 - AT - Central Excise

Demand - 100% EOU - manufacture of pharmaceutical medicines - clean room panels - Held that - We note that the duty free procurement of these items have been approved by the Development Commissioner who in his LoP dated 28.04.2006 elaborately listed these items for concession. When the competent authority approved these items for concession denial of the same is not correct. The Tribunal in Ginni International Limited vs. CCE, Jaipur 2001 (9) TMI 165 - CEGAT, COURT NO. IV, NEW DELHI held that the Revenue cannot go beyond the permission granted by the competent authority administering the Foreign Trade Policy - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
- Eligibility of clean room panels for duty exemption under Notification No.22/2003-CE.

Analysis:
The case involved an appeal against the order of the Commissioner (Appeals) Jaipur-I where the appellants, operating as a 100% EOU engaged in manufacturing pharmaceutical medicines, had procured clean room panels and related items for constructing a classified controlled clean room. The Revenue contended that these items were not covered under any exemption category and initiated proceedings resulting in a demand confirmation of &8377; 11,17,763. The appellant argued that the goods were essential for manufacturing pharmaceutical products and fell under the exemption category for goods used in connection with the manufacture and packaging of export goods. The Tribunal referred to previous judgments, including one by the Hon'ble Supreme Court, emphasizing that goods used for the purpose of manufacture or in connection with production could be eligible for exemption. It was noted that the Development Commissioner had approved the duty-free procurement of these items, and the Tribunal held that denial of the concession was incorrect, citing a previous decision that the Revenue cannot exceed the permission granted by the competent authority administering the Foreign Trade Policy.

The Tribunal found that the clean room panels and related items were integral to the manufacturing process of pharmaceutical products and fell within the scope of goods eligible for duty exemption under Notification No.22/2003-CE. The decision highlighted the importance of these items for maintaining controlled clean rooms as per manufacturing standards and the approval granted by the competent authority for duty-free procurement. The Tribunal set aside the original order, allowing the appeal and disposing of the case accordingly.