2001 (6) TMI 538 - AT - Central Excise

Summary

Issues:
1. Central Excise duty demand on ZIFOL-12 capsules.
2. Penalty imposition under Rule 173Q.
3. Penalty imposition under Rule 209-A.
4. Classification of blister packing as 'manufacture' under Central Excise Act.
5. Eligibility of exemption under Notification 214/86.
6. Responsibility for testing and analyzing of capsules after blister packing.
7. Return of goods to the original manufacturer for final packing.
8. Need for reevaluation of facts and determination of duty liability.

Central Excise Duty Demand on ZIFOL-12 Capsules:
The case involved M/s. Shrusti Pharmaceuticals (P) Ltd. claiming SSI exemption for ZIFOL-12 capsules, which were then sent to M/S. Eros Pharma (P) Ltd. for blister packing. The tribunal found that the duty demand on M/s. EPPL for blister packing ZIFOL-12 could not be upheld due to lack of discussion on the eligibility of claimed exemptions under Notification 214/86. The matter was remanded for further adjudication.

Penalty Imposition under Rule 173Q:
The Commissioner confirmed the demand and imposed penalties on M/s. EPPL and M/s. SP under Rule 173Q. However, the tribunal refrained from making any findings on this issue due to the remand order for de novo adjudication.

Penalty Imposition under Rule 209-A:
Penalties were imposed on individuals associated with M/s. EPPL under Rule 209-A. The tribunal highlighted the need for reevaluation of facts, including the eligibility of exemption under Notification 214/86, before determining duty liability, and thus allowed the appeals for remand.

Classification of Blister Packing as 'Manufacture':
The tribunal analyzed whether blister packing constituted 'manufacture' under the Central Excise Act. It referenced Chapter Note 5 to Chapter 30, indicating that blister packs could be considered 'Retail Packs' and subject to duty exemption under Notification 214/86. However, the tribunal found discrepancies in the adjudicator's failure to discuss the eligibility of these exemptions, leading to the remand order.

Responsibility for Testing and Analyzing of Capsules After Blister Packing:
The tribunal considered the responsibility of testing and analyzing capsules post-blister packing. It examined the provisions of the Drugs and Cosmetics Rules, emphasizing that the responsibility lay with M/s. Shrusti Pharmaceuticals. The tribunal highlighted the need to ascertain if test samples were kept at M/s. EPPL's premises, as required by the Drugs Act/Rules, before making a final determination.

Return of Goods to the Original Manufacturer for Final Packing:
The tribunal discussed the process of returning blister packs to M/s. Shrusti Pharmaceuticals for final packing, as per the memorandum of understanding between the parties. It emphasized the need to reevaluate whether blister packs were indeed sent back to the original manufacturer, indicating a conflict that required resolution.

Need for Reevaluation of Facts and Determination of Duty Liability:
Given the discrepancies and unresolved issues, the tribunal concluded that a remand order for de novo adjudication was appropriate. It refrained from making definitive findings on other issues, keeping them open for both parties until further clarification and assessment of duty liability.