9911796707
TMI Blog1998 (11) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... the period from 1-3-1986 to 22-6-1987, which have been held to be intermediate products arising during the course of manufacture of (a) Mebendazole USP (b) Lidocaine USP and (c) Miconazole Nitrate BP. He has also imposed a penalty of Rs. 2.5 lakhs on the appellants and has further ordered confiscation of land, building, plant and machinery and materials used in connection with the manufacture of the above intermediate products, with an option to redeem the same on payment of a fine of Rs. 50,000/-. 2. The brief facts of the case are that the appellants herein are engaged in the production of the following bulk drugs falling under Chapter 29 of the CETA, 1985 : 1. Mebendazole USP 2. Miconazole Nitrate BP 3. Lidocaine Hcl IP 4. Lido ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inputs are used, are not fully exempted from payment of Central Excise duty or are chargeable to nil rate of duty. A statement of Shri K.N. Shanghavi, General Manager of the appellant company was recorded on the date of visit in which he deposed about the quantity of production of the 3 disputed products for the period 1-3-1986 to 22-6-1987 and he also furnished the ratio of finished goods to intermediate products and also furnished the approximate value of the intermediate products. He also stated that no duty was being paid on the intermediate products as the appellants were under the impression that in a continuous process, the intermediate products is not coming out, and is not chargeable to duty and that the appellants were not sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(f) of the CESA, 1944, leviable to duty and that the Revenue has not discharged the onus cast upon it to prove that the items satisfied the test of marketability which is a very important criterion for determining the excisability. The learned Counsel also raises the plea of time bar, submitting that the show cause notice dated 15-2-1989 proposing to recover duty on the above mentioned 3 items produced during the period from 1-3-1986 to 13-11-1987 is barred by limitation as the period of demand is beyond the normal period of limitation of six months and the extended period of limitation is not available to the Department in the absence of any suppression of facts or wilful misdeclaration by the appellants who have filed requisite classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the statement dated 16-12-1989 of Shri K.N. Singhvi, General Manager of the appellant company, wherein he has given details of quantity of manufacture of the intermediate products in dispute and the approximate price therefor. The Collector has held that Shri Singhvi has not disputed the marketability of the intermediate product; however, this is factually incorrect as we find from a reading of the statement as reproduced in the show cause notice that Shri Singhvi has categorically deposed that the appellants had not paid any Central Excise duty for intermediate goods manufactured during the disputed period as they were under the impression that in a continuous process intermediate is not coming out and is not chargeable to excise duty; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he items in question arise during the course of manufacture of bulk drugs. According to the Department these are identifiable separate chemically defined compounds which are produced at an intermediate stage. The appellants also agree up to this point and accept that they do arise at intermediate stage; It is, however, their contention that they so arise during a continuous process and are not in a marketable state and get utilised captively during the manufacture of the bulk drugs for the production of which they have been licenced by the Drug Controller. The Department however insists that they are capable of being marketed and were excisable products. Both the sides have however not produced sufficient material in this regard. The privat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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