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TMI Blog2013 (8) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... in the rest of the clearances of the appellant and SSI exemption benefit was deniable to the appellant. Reading of para 5.2 of the adjudication order and the agreement, it supports the case of revenue. 2. Ld. Counsel submits that when duty was paid by MARCK to discharge its liability under excise laws, clearances made by MARC shall not be included in the clearances of the appellant. 3. Both sides are in rivalry contentions. Clause 4.1 read with Clause 6 of the agreement indicates that all along the appellant was owner of the raw materials and finished goods. Once such was the agreement between the parties, the goods ultimately manufactured by MARCK came to the appellant for ultimate disposal. Therefore, appellant getting its goods manufactured using facility of other became liable to duty. The appellant is, therefore, directed to deposit of Rs.6,00,000/- (Rupees Six Lakhs only) within 4 weeks and make compliance on 28.06.2013. 4. Ld. Brother, Shri Rakesh Kumar, Member (Technical) says that he will record a different order. Place the file before him to record his order. (Dictated in the open court) PER : Rakesh Kumar I have heard the order dictated by my ld. brother in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad, that while the loan licence manufacturing agreement is with M/s. Marck Bio Sciences Ltd., Ahmedabad, job work manufacturing agreements are with parties at Karnal, Bhiwadi and Ghaziabad, that difference between the value of clearances as reflected in the balance sheet and the total value of clearances as reflected in the ER-I Returns is the value of the goods manufactured under loan licence and on job work basis and that the value of these goods cannot be clubbed with the value of the clearances of their own goods for the purpose of SSI exemption. However, this plea was not accepted by the Original Adjudicating Authority. 2.2 On appeal to the Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 23.12.2012 upheld the order of the original adjudicating authority except for reducing the duty demand to Rs. 12,36,000/- as there was mistake in the calculation of duty in the order passed by the original adjudicating authority. The Commissioner (Appeals) relied upon the para 4.2 of the Chapter 2 of the CBEC Excise Manual of the supplementary instructions for clubbing the clearances of the goods got manufactured by the appellant as loan licensee with the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue's contention would amount to charging duty on the same goods twice first, at the time of clearance from the premises of the manufacturer, who has manufactured the goods for the appellant under loan licence agreement and thereafter again, in the hands of the Appellant, by clubbing the value of those goods with the value of the goods manufactured by the appellant, that the only reason for difference between the balance sheet figure of clearances and the ER-I return figures of clearances is that the balance sheet figures also include the sale value of the goods got manufactured on job work basis or under loan licence agreement through other manufacturers, that the impugned order is totally incorrect, that the appellant have a strong prima facie case and hence, the requirement of pre-deposit of duty demand, interest thereon and penalty may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 5. Ms. S. Bector, ld. Departmental Representative, opposed the stay application by reiterating the findings of the Commissioner (Appeals) and also relied upon the judgement of Hon'ble Allahabad High Court in the appellant's own case report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in this case, just because the appellant exercised some supervision over the manufacture of their goods in the premises of the other manufacturer, under loan licence agreement or job work agreements, it cannot be concluded that both the factories were owned by the same person. In fact when a manufacturer manufacturers medicine on his account and also manufactures medicines in the same factory on loan licence basis for another manufacturer, he is required to club the value of clearances of his own manufactured goods with the value of the goods belonging to another person manufactured on loan licence basis. But the manufacturer, who has got his medicines manufactured in the premises of another manufacturer, is not required to club the value of the medicines got manufactured under loan licence agreement through another manufacturer with the value of medicines manufactured by him in his own factory. The words - "principal manufacture" in para 4.2, Chapter 2 of the Manual of supplementary instructions refer to the manufacturer who in his factory, in addition, to manufacturing the medicines for himself, also manufacturer medicines for another manufacturer under loan licence agreement a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Optho Remedies (P) Ltd. reported in 2012 (276) ELT 327 (All), cited by the learned DR, the provisions of clause (v), (vi) (vii) of para-2 of the notification no.8/2003-CE, the validity of which (corresponding provisions - para 2 3 of notification no.175/86-CE) has been upheld by Hon'ble Gujarat High Court in case of Indica Laboratories Pvt. Ltd. (supra) have not been considered. 7. I am, therefore, of prima facie view that the impugned order is contrary to the provisions of Clause V, VI and VII of Para-2 of the SSI exemption no.8/2003-CE and as such, the same does not appear to be sustainable. The appellant, therefore, have strong prima facie case in their favour and insisting on the requirement of pre-deposit of the duty demand, interest thereon and penalty would cause undue hardship. The requirement of pre-deposit of duty demand, interest and penalty is, therefore, waived and recovery thereof is stayed till the disposal of the appeal. Since there is difference of opinion between Member (Judicial) and Member (Technical), Registry is directed to place this matter before the Hon'ble President for constituting a Bench under Section 129C(5) of the Customs Act, 1962 for ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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