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TMI Blog1995 (12) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... ring two P & P medicines namely "Merizyme Elixer" and "Merizyme Drops". As these two branded medicines were being sold to M/s. Mercury Laboratories Pvt. Ltd., Baroda, the Department was of the view that these two medicines were P & P medicines and were the product of M/s. Mercury Laboratories, Baroda. The Department also found that M/s. Mercury Laboratories, Baroda was engaged in the manufacture of P & P medicines and since M/s. Mercury Laboratories were not entitled to exemption under Notification No. 175/86 as the total clearances during the preceding financial year exceeded Rs. 1.5 crores and Rs. 2 crores. Therefore, M/s. Sarpin Pharmacal who manufactured the two medicines under the brand name of M/s. Mercury Laboratories, Baroda were not entitled for the concession under the Notification No. 175/86. It was also alleged that the price of M/s. Mercury Laboratories was required to be declared for the purpose of assessment of duty of the said two items. A show- cause notice was accordingly issued asking the appellants to explain as to why the duty amounting to Rs. 12,29,510.98 should not be demanded. 3. The learned Collector in his findings held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 16-1-1993 and 10-2-1993; that the Collector had earlier passed order on 30th Sept., 1990 without any opportunity of being heard and that when the appellants herein approached the Hon'ble Gujarat High Court, the Hon'ble Gujarat High Court set aside the order of the Collector and ordered a fresh adjudication. The learned Counsel submitted that having regard to this fact, the Collector was prejudiced against them and therefore, he did not consider all the materials placed by them before him; that the finding of the Collector in para 14 that the appellants herein were collecting the Central excise duty at the rate of 15% ad valorem was not correct and that the appellants were collecting the excise duty on the two medicines at a rate of 5% as was evident from the gate passes issued. It was argued by the ld. Counsel that the Drug Authorities have registered these two medicines in the name of the appellants herein from 1-1-1988 and as the demand was also for the period commencing after 1-1-1988 and therefore, the finding of the ld. Collector that these two medicines were registered PP medicines of M/s. Mercury Laboratories was erroneous. The learned Counsel on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel submitted that the appellants herein have been denied the benefit under Notification No. 175/86 read with the Notification No. 223/87 on the ground that the appellants herein were using the brand name of another firm. The learned Counsel submitted that the position was otherwise because from Jan., 1988, the product was registered in the name of the appellants. In view of the above submissions made, the ld. Counsel submitted that there is no case made out by the Department against the appellants and therefore, the impugned order may be set aside. 8A. Shri A.K. Madan, the learned SDR appeaing for the respondent submitted that the show-cause notice is specific on the allegation that the concession under Notification No. 175/86 was not available to the appellants herein inasmuch as they were manufacturing the two medicines which were the brand name of M/s. Mercury Laboratories. The learned SDR submitted that as M/s. Mercury, the holder of the brand name of the two medicines, were not eligible for the benefit of Notification No. 175/86 and therefore, the lower authorities have rightly denied the benefit to the appellants. 9. On the question of limitation, the ld. SDR su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement referred to in the preceding paragraph, these two branded medicines manufactured by the appellants were the property of M/s. Mercury. 12. Now coming to the question whether the appellants were entitled to the benefit of Notification No. 175/86 of 1-3-1986, we observe that this notification stipulated that in case the manufacturer manufactures the goods affixed with the brand name of another manufacturer then this manufacturer shall not be eligible to the concessional rate of duty under this notification if the brand name holder is not entitled to this concession. The admitted position is that M/s. Mercury Lab. was not eligible for the benefit of concessional rate of duty under Notification No. 175/86 and since we have already held that these two medicines were the branded goods of M/s. Mercury and therefore, the appellants herein were not entitled to the benefit of concessional rate of duty under Notification No. 175/86. 13. Now coming to the question whether the price at which M/s. Mercury was selling the goods to its customers should be taken as the price for the purpose [of] Section 4 of the Central Excises and Salt Act, 1944, we find that the goods were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y), from Rs. 50,000/- on Shri Nandkishore Balubhai Desai to Rs. 30,000/- (rupees thirty thousand only) and from Rs. 40,000/- to Rs. 20,000/- (rupees twenty thousand only) on Shri Kiranbhai Dahyabhai Patel. 16. We also observe that the question of denial of natural justice was taken up before the Tribunal at the time of hearing of stay petition. We also observe that after detailed examination of the evidence on record, the Tribunal had come to the conclusion that the principle of natural justice was not violated by the Collector while passing the impugned order. We agree with the findings of the Tribunal in the Stay Order No. 183 to 185/93-C, dated 4-11-1993. 17. In view of the above discussion, we hold as under : (a) the two medicines manufactured by the appellants herein are the PP medicines and the brand name is owned by M/s. Mercury Laboratories, Baroda; (b) that the concessional rate of duty under Notification No. 175/86 shall not be available to the appellants herein; (c) that no case is made out by the Revenue to prove that the appellants herein were related persons of M/s. Mercury Laboratories or the appellants herein was a dummy unit of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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