1997 (10) TMI 123 - AT - Central Excise

Summary

Issues: Eligibility of loan licensees to benefit under Notification No. 175/86-C.E.

The judgment by the Appellate Tribunal CEGAT, New Delhi involved a case where M/s. Natural Health Farm Products Pvt. Ltd., a loan licensee engaged in manufacturing pharmaceutical products, sought eligibility for the benefit of Notification No. 175/86-C.E., dated 1-3-1986 as amended. The Collector of Central Excise (Appeals) had previously denied the exemption to the appellants based on the interpretation of Explanation (iv) of Notification 175/86, which stated that goods manufactured for brand name owners shall not be deemed to have been manufactured by them. The Collector observed that the appellants did not manufacture any goods themselves during the relevant period, getting all their products manufactured through another entity. As a result, the appeal was dismissed for lack of merit.

The appellant, represented by Shri Pradeep Bakshi, Advocate, argued that loan licensees should be considered manufacturers in their own right, citing a previous Tribunal decision in the case of M/s. Syntho Pharma Private Limited. The Tribunal's decision in that case established that loan licensees are to be treated as manufacturers, irrespective of factory ownership or SSI registration status. The matter in the present case was related to Small Scale exemption and had been remanded to the Assistant Collector for further review.

The Respondent, represented by Shri H.K. Jain, SDR, contended that the Tribunal's order did not discuss the eligibility for exemption under Notification 175/86-C.E. and left the matter to the jurisdictional Central Excise authorities for determination.

Upon careful consideration, the Tribunal acknowledged the status of loan licensees as manufacturers in their own right, as established in the previous decision. However, regarding the eligibility for the Small Scale exemption under Notification 175/86-C.E., the Tribunal remanded the matter to the jurisdictional Commissioner of Central Excise for re-examination in light of the Tribunal's previous Order. The appeal was disposed of accordingly, emphasizing the need to assess eligibility for the exemption based on the provisions outlined in Notification 175/86-C.E.