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TMI Blog2011 (10) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajeev Waglay, Advocates, for the Appellant. Shri V.K. Agarwal, SDR, for the Respondent. [Order per : Sahab Singh, Member (T)]. This is an appeal filed by M/s. U.V. Laboratories (hereinafter referred to as appellant) against Order-in-Appeal No. P-II/BKS/345/2003, dated 20-11-2003 passed by the Commissioner of Central Excise (Appeals), Pune II. 2. Brief facts of the case are that the appellants were engaged in the manufacture of Organic and Inorganic Chemical falling under Chapter 28 and Chapter 29 of the Central Excise Tariff Act. They were availing the benefit of small scale exemption notifications issued from time to time. In addition, they were also manufacturing excisable goods on account of M/s. Pharma Links, Mahim, Mumbai on loan-licence basis by availing the benefit of Notification No. 27/92 dated 9-10-1992. Four Show Cause Notices were issued to the appellant for simultaneous availment of the above under para 1 (a) (i) and para 1 (a) (ii) of Notification No. 1/93, dated 8-2-1993 as amended during the year 1996-97 and for availment of Small Scale exemption on their own products and payment of full rate of duty in respect of goods manufactured on loan licence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Classification List No. 10/97-98. 3. All these show cause notices were adjudicated by the Assistant Commissioner vide his Order-in-Original No. RTN/CEX/28/98, dated 28-8-98 wherein proceedings initiated under all the four show cause notices were dropped by the adjudicating authority. The order passed by the Assistant Collector was not accepted by the department and it was observed by the reviewing authority that in view of the provisions of Section 2(f) of the Central Excise Act, the manufacturer is a person who actually manufacture excisable goods irrespective of the fact that goods manufactured on his own or from the raw material supplied by the customers. It was contended by the department that for purpose of calculating the aggregate value of the clearances by the manufacturer in respect of the goods manufactured on his own account and on behalf of the loan licensee are required to be clubbed together. Benefit of full exemption on one hand and the slab exemption after availing Modvat facility on the other hand cannot be availed simultaneously. Accordingly, an appeal was filed by the department before the Commissioner (Appeals), who vide the impugned order allowed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 214/86-C.E., dated 25-3-1986, the goods manufactured by a job worker are exempted from excise duty if the raw material supplier pays the duty on the same, while clearing them from his factory. The learned advocate also submitted that while demanding the duty where one of the Show Cause Notices duty of Rs. 72,210/- was demanded by including the value of Rs. 5,94,000/- export goods which is not correct in law. Though this point was taken by the appellant in their reply, the learned Commissioner (Appeals) did not consider this point. 5. The learned SDR on behalf of the Revenue submitted that under Notification No. 1/93-C.E. in para 2 of the Notification, it is clearly stated that aggregate value of clearance of the specified goods (a) by a manufacturer from one or more factories; or (b) from a factory by one or more manufacturers are to be taken together for the purpose of calculating the slab of Rs. 30 lakhs/Rs. 20 lakhs/Rs. 25 lakhs respectively. The Notification clearly states that all the clearances made from the factory of the appellant on their behalf and on behalf of other manufacturer i.e. M/s. Pharma Links are to be clubbed for the purpose of claiming the benefit. He also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) in any other case from the whole of the duty of excise leviable thereon .. [2. The aggregate value of clearances of the specified goods for home consumption in a financial year - (a) by a manufacturer from one or more factories; or (b) from a factory by one or more manufacturers Under sub-clauses (a), (b) and (c) of the opening paragraph shall not exceed rupees thirty lakhs, twenty lakhs and twenty five lakhs respectively. 8. Similarly, under Notification No. 7/97-C.E., dated 1-3-1997 goods are exempted subject to the conditions mentioned in para 2 of the Notification which reads as under : 2. The exemption contained in this notification shall apply only subject to the following conditions, namely :- (i) A manufacturer has the option to not avail the exemption under this notification and to pay the appropriate duty of excise leviable, under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) read with any notification issued under sub-section (1) of Section 5A of the said Central Excise Act, but for the exemption contained in paragraph 1, and such option once exercised in a financial year cannot be withdrawn in the same financial y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces shall not exceed Rs. 30 lakhs, Rs. 20 lakhs and Rs. 25 lakhs respectively. Similar condition is available in Notification No. 7/97 in para 2(v) above. Therefore, there is no doubt that for availing the exemption under these Notifications, the value of the clearances made from the appellants factory on their own and on behalf of M/s. Pharma Links are to be clubbed under these Notifications. Similarly, in para 1(a)(i) of Notification No. 1/93, it clearly stated that in case a manufacturer avails the credit of duty paid under Rule 57A, value of the clearances of first Rs. 30 lakhs will be governed by concessional rate and in para 1(a)(ii) in case the manufacturer does not want to avail this facility of para 1(a)(i), then goods upto Rs. 30 lakhs will be exempted from the whole of the duty of excise. Para 1(a)(i) and (ii) cannot be availed simultaneously. Para 1(a)(i) clearly states that in a case where a manufacturer avails credit of duty paid on inputs then clearance of Rs. 30 lakhs will be cleared at concessional rate and if the manufacturer does not want to avail this facility then only the first clearances of Rs. 30 lakhs will be totally exempted. Similar provisions are made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpreted Notification No. 9/99-C.E. along with Notification No. 83/94 and 84/94. As stated in the foregoing paragraph, the present appellants or M/s. Pharma Links were not availing the benefit of Notification No. 83/94 and 84/94 and therefore all these decisions which interpreted the availment of Small Scale Exemption read with Notifications No. 83/94 and 84/94 are not applicable to the present case. On the other hand, Hon ble Gujarat High Court in the case of Indica Laboratories - 1990 (50) E.L.T. 210 has held that clearance of loan licensee at manufacturing factory are to be clubbed. 13. The learned advocate also stated that the value of the clearances exempted under Notification No. 83/94, 84/94 and 214/86 are not to be taken into account while clubbing the value of the clearances. From the facts of the case, it is found that the appellants were not availing these exemptions under these Notifications and in fact the appellants were paying duty on the clearances made on behalf of M/s. Pharma Links. Therefore, the question of exclusion from the total value of the clearances does not arise. 14. Another point raised by the learned advocate for the appellants is that the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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