2018 (11) TMI 962 - AT - Central Excise

Concessional rate of duty under N/N. 6/2002 dated 01.03.2002 as amended - manufacture of PP Medicines - the basic reason for denial of benefit and confirmation of duty is that the disposition report contains row at the bottom having signature with date 20.07.2005 - Held that - Commissioner (Appeals) has decided the said report solely on the ground that the column in the bottom shows date of 20.07.2005 whereas the actual report is claimed to have been made on 29.05.2007. The defense of the appellant is that the said proforma was made as a result of efforts of a team to draft the standards operating procedure for such disposition. The draft finalized by the said team contains a row in the bottom which shows the date when the said proforma for making the disposition report was approved. It has been argued that in all the disposition report said date and signature at the bottom would appear, as a part of the profroma, not as part of the report. We find significant force in the arguments of the appellants as can be seen from the standards operating procedure report submitted by them as Annexure-F to the appeal. However, it is seen that the said report and the said argument was not submitted before the lower authorities. Though prima facie, we find substance in the argument of the appellant, however, since it is new fact brought on record, we deem it proper to set aside the impugned order and remand the matter to the original authority to reconsider after taking into account. Appeal allowed by way of remand.

Summary

Issues Involved:
Appeal against demand of Central Excise duty, interest, and penalty for using goods under concessional rate of duty for manufacturing finished goods that did not meet quality standards.

Analysis:
1. The appellant, a pharmaceutical company, procured Carbidopa under a concessional rate of duty to manufacture medicines. The finished product, Dudopa CR Tab, failed quality control tests and was destroyed. The appellant argued that the goods were used for the intended purpose, even though the final product was rejected.

2. The exemption under Notification No. 6/2002 dated 01.03.2002 is subject to following the procedure laid down in Condition No. 5. The appellant contended that the goods were used for the intended purpose, even if the final product was not successfully manufactured, as the condition does not expressly require the production of finished goods.

3. The defense of the appellant was challenged based on the date of preparation of the disposition report. The report was prepared before the goods were actually purchased. The appellant argued that the report was part of the standard operating procedure finalized by a team of experts and was filled out after the goods were used, not before the purchase.

4. The Commissioner (Appeals) based the decision on the date mentioned in the disposition report, which was disputed by the appellant. The Tribunal found merit in the appellant's argument, supported by the standards operating procedure report submitted as Annexure-F, but noted that this evidence was not presented before the lower authorities.

5. The Tribunal set aside the impugned order and remanded the matter to the original authority for reconsideration, taking into account the new argument and facts presented by the appellant for the first time at the Tribunal.

6. The impugned order was overturned, and the case was sent back to the original authority for fresh orders, emphasizing the importance of considering all relevant evidence and arguments presented by the appellant.

This detailed analysis covers the issues involved in the legal judgment, highlighting the arguments presented by both parties and the Tribunal's decision to remand the case for further consideration based on new evidence brought forward by the appellant.