9911796707
TMI Blog2009 (3) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... very same assessee and the issue involved being the same are being disposed of by a common order. 2. The relevant facts that arise for consideration are the appellants are holders of Central Excise Registration and are manufacturers of Bulk Drugs and P or P Medicaments, falling under Chapter Heading Nos. 2942.00 and 3003.10 respectively of the Central Excise Tariff Act, 1985. The appellants are also availing Cenvat credit of duty paid on inputs/capital goods under Cenvat Credit Rules, 2004. It was noticed that the products that are being manufactured by the appellant, some of the bulk drugs and formulations have been exempted from payment of excise duty w.e.f. 1-3-2003 by virtue of Notification No. 6/2003-C.E. dated 1-3-2003. The said ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inabove are intermediate products and since they are not cleared from the factory, appellant is liable to pay the amount on the value/price of the exempted formulations cleared from the factory premises. 4. Learned Counsel appearing on behalf of the appellants submits that they were not required to pay 10% of the value of the exempted formulations as they have correctly paid 8%/10% of the value of the drugs cleared from their Bulk Drug Division to Formulations Division. It is the submission that said clearances is clearance as contemplated in the Central Excise Law and that they are preparing invoices for such clearances. It is the submission that the bulk drugs cleared are not intermediate products, but final products as such. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower authorities that the exempted bulk drugs are themselves exempted from payment of duty in terms of Notification No. 6/2003 and that the appellants have not cleared the same from their factory for sale. We are of the considered opinion that, if it is admitted that the said bulk drugs are exempted from payment of duty vide Notification No. 6/2003-C.E. dated 1-3-2003, then the appellant is required to discharge 8%/10% of the price of the bulk drugs. We find that in these cases the appellant has done so. The submission of the learned JCDR and the findings of the lower authorities that the impugned bulk drugs are intermediate products and not final products seems to be totally misplaced, as these bulk drugs are specifically mentioned by nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under notifications. The tax policy conveyed through these exemption notifications is that these items are not to bear any Central Excise duty. Charging 8% of the value of the PD pumps towards adjustment of credit taken on the materials going into the manufacture of castings would have the effect of levying excise duty on the exempted PD pumps. This position is made clear from the record itself. The total Modvat credit taken by the appellant during the period in question on pig iron and foundry chemicals was only over Rs. 23 lakhs. Since 90% of these inputs went into the production of dutiable (sold) castings, the credit on inputs which went into the manufacture of captively consumed castings was only, on a proportionate basis, about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, there is no justification for treating the PD pumps as final product and seeking recovery from the appellant @ 8% of the value of the PD pumps. Adjustment of credit is required to be done by treating castings as the final product. We agree with the view taken by the Tribunal in its earlier decisions. 17. The reference is answered in the above terms and the appeal is returned to the referring bench for decision. 9. The issue before us being identical as was in the case of Texmo Industries (supra), we find that the ratio squarely covers the issue in favour of the appellant. 10. Accordingly, respectfully following the decision of the Larger Bench, we hold that the impugned orders are unsustainable and are liable to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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