9911796707
TMI Blog2003 (6) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... usand, six hundred and eleven) under Section 11AC of the Act. He has also demanded interest under Section 11AB of the Act. He has also ordered for adjustment of Rs. 15,00,000/- (Rupees Fifteen lakhs) paid by the appellants towards the above duty demand. 2. The brief facts of the case are that the appellants herein are manufacturers of patent and proprietary (P or P) medicaments falling under Chapter heading 3003.10 attracting duty @ 15% and general medicaments falling under Chapter sub-heading 3003.20 attracting nil rate of duty. The appellants availed the benefit of Modvat Credit of duty paid on the inputs used in the manufacture of finished products. The department on specific intelligence gathered came to know that the appellants were claiming fraudulently rebate under Rule 12(1)(a) on the export of generic medicines. On a visit to the unit by the officers it was found that the appellants were indulging in tampering with documents and had made wilful misstatement with a view to claiming rebate of duty paid on generic items which attracted nil rate of duty and by doing so, the appellants wrongly encashed the Modvat Credit lying un-utilized in the RG 23A account. The department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated inter alia that names of products have been tampered with while submitting the documents to the Central Excise Department. He has also stated that if the description in the Shipping Bill speaks about generic product being exported, only generic drugs have been exported. Shri Bhaskar, Executive Assistant, of the appellants also corroborated the statements given by other employees as noted above. Shri Sardarmul Chordia, Managing Director of the appellants stated that whatever the procedure the appellants having been adopting towards claim of rebate has been accepted by the department and hence they were under the impression that there was nothing wrong in claiming rebate in respect of generic medicines. It was in the above circumstances that show cause notice was issued to the appellants which culminated in the order impugned against which the appellants have come in appeal. The appellants assail the order of the lower authority inter alia on the following grounds : (a) The generic name of the product was indicated in the shipping bills and other documents purely due to the banking regulations and also on account of the international trade practice of identifying medic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders by holding that they were placed only for generic medicaments without considering the submissions of the appellants that they were not prohibited from affixing their brand name on goods as per the terms of the said orders, sample copies of which were furnished to the Commissioner, is totally prejudicial and devoid of any merits. (i) The findings of the Commissioner as if the appellants herein had relied on the provisions of Rule 96ZN of the erstwhile rules to justify their action in indicating the brand names in the excise documents without taking note of the various other grounds canvassed is misconceived and unwarranted. (j) The Commissioner's finding that in view of the judgment of the Hon ble Supreme Court in the case of M/s. Astra Pharmaceuticals (P) Ltd. v. Collector reported in 1995 (75) E.L.T. 214, the claim of the assessee that since packing of the generic medicine contained their monogram, they should be classified under Ch. Sub-heading 3003.10 as P or P medicines, is not correct. (k) The Commissioner has not taken note of the fact that only in few cases, generic medicaments which do not bear a product mark but bearing a monogram have been treated to be P or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He has submitted that commercial invoice is not a statutory document and hence it was not submitted. He has further submitted that over 91% of the goods produced by them are exported and only an insignificant quantum of about 9% is sold in the domestic market. He has further pleaded that while P P medicines classifiable under sub-heading 3003.10 attracts duty @ 15%, for generic medicines falling under sub-heading 3003.20 there is NIL rate of duty. He has further pleaded that Maritime Commissioner has granted refund for the year 1995-96, 1996-97 and for 1997-98 and having been convinced of the eligibility of the appellants to the rebate. He has also invited our attention to page 9 of the paper book where copy of the labelling instructions of the foreign buyer has been filed. He has submitted that it can be seen from the instructions at Sl. No. 4 wherein it is clearly indicated that the label for each pharmaceutical and vaccine products shall meet W210 GMP Standard and shall include the INN or generic name prominently displayed over and above the brand name, where a brand name has been given. The instructions further stipulate that brand name should not be bolder or larger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd he prayed for upholding the impugned order and rejection of the appeal. 5. We have carefully considered the submissions made by both the sides and have gone through the case records. The learned Counsel for the appellants argued the matter for a considerable length of time in his endeavour to convince us that there was no deliberate attempt on their part to tamper with the documents to fraudulently claim the rebate as alleged by the department. After hearing both the sides extensively and having gone through the records we observe that the gravamen of the department against the appellants is that the appellants have exported generic medicines which attracts NIL rate of duty and in order to get the benefit of rebate, the records were manipulated to show that they have exported P or P medicines attracting 15% duty and that the rebate earned would not have otherwise been used and should have been kept as un-utilized Modvat. Examining this question, we observe that the appellants have taken the plea that the product in almost all cases carry brand name either predominantly or insignificantly, printed or stamped apart from the fact that they also bear pharmacopoeial, name like BP, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory registers and that they have not filed any monthly returns under Rule 173G or have not filed any declaration under Rule 57A. Further, in the present case, the entries made in the shipping bill by the Customs officer to the effect verified AR4 cannot be overlooked. The plea of the department that Customs Officer was not concerned with the description of the goods, cannot be countenanced for the reason that if he was not competent to do the verification, he should not have verified the entries and certified the same. In such circumstances it cannot be said that the appellants have held back any information from the department to gain any undue benefit. 6.1 We also observe that the Tribunal in the case of Orissa Cement v. CCE, reported in 1996 (81) E.L.T. 154 has held that when the department had allowed the refund after due scrutiny the extended period of limitation is not applicable in terms of provision to Section 11A(1) of the Act. The Hon ble Apex Court in the case of Collector v. Chemphar Drugs Liniments reported in 1989 (40) E.L.T. 276 (SC) has held that where the department had full knowledge about the facts and the manufacturer s action or in action is based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the background of these facts the charge of the department that only generic medicines were exported and not branded cannot be accepted and deserves to be rejected and is accordingly rejected. It goes without saying that when they have taken a specific plea that their production itself is mostly branded medicines which plea is not opposed by Revenue, they could not have exported only generic medicines. Therefore, it is not understandable as to how such allegation can be sustained . Further, it is also not the case of the Revenue that they have come out with any list showing the exact quantum of P or P medicines and the generic medicines manufactured by the appellants to support their charge against the appellants that they have exported only generic medicines. We also note that, the Tribunal in the case of ACE Laboratories Ltd. v. CCE, New Delhi, reported in 2001 (128) E.L.T. 376 has held that when goods were classified and assessed at the time of removal for export as P P medicines, the department cannot allege later that goods exported are not P or P medicines. It was also held therein that Modvat credit is also admissible in respect of inputs utilized in manufacture of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mafatlal Fine Spg. Mfg. Co. v. Collector reported in 1988 (33) E.L.T. 540, (ii) Piramat Exports v. Collector reported in 1986 (25) E.L.T. 723 (iii) Madura Coats v. GOI reported in 1986 (23) E.L.T. 63 (Mad). In the present case it cannot be denied that there has been substantial compliance with the requirement of law. 8. Now coming to the last question as to whether the appellants were eligible for the rebate and whether the rebate was sanctioned erroneously, we observe that in the instant case, the following facts remain undisputed : (a) Duty was paid by the appellants on the inputs used in the manufacture of the final product viz. medicines and Modvat credit was earned by them. (b) Appellants have exported the final goods manufactured out of excisable inputs. We observe that in terms of Rule 12(1) (a) rebate of duty paid on the excisable goods is admissible to the exporter and in terms of Rule 12(1) (b) duty paid on the excisable materials used in the manufacture of goods is admissible if such goods are exported outside India. In terms of Rule 57F(13), where any inputs are used in the final products which are cleared for export under bond or used in the intermediate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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