9911796707
TMI Blog2013 (10) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... uded for computing the first clearances of ₹ 1.5 crore. I find the goods cleared under a brand name or a trade name which are ineligible for exemption are cleared on payment of duty. Therefore the duty paid clearances bearing a brand name or trade name of other persons are to be excluded for computation of ₹ 1.5 crores in the current financial year. Larger bench decision by majority - Prima facie case is against the assessee - stay granted partly - E/1061 of 2012-EX(DB) - Stay Order No. 59165/2013-EX(DB) - Dated:- 11-9-2013 - D N Panda And Rakesh Kumar, JJ. For the Appellant : Shri B L Narsimhan, Adv. For the Respondent : Shri M S Negi, DR PER : D N Panda It appears from the impugned order that the agreement made between the appellant and MARCK was to use facilities of MARCK for the purpose of manufacture of the medicine. On examination of the contents of the agreement appearing at page 97 to 108 of appeal folder, Department opined that arrangement between the parties was for manufacture of goods by the appellant itself for which there Should be clubbing of such clearances in the rest of the clearances of the appellant and SSI exemption benefit was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice dated 15.12.2010 was issued for demand of the differential duty amounting to Rs.18,54,000/- for 2008-09 Period along with interest and for imposition of penalty on them under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. This show cause notice was adjudicated by the original adjudicating authority vide order-in-original dated 28.4.2011 vide which he confirmed the duty demand alongwith interest, as raised in the show cause notice and imposed penalty. In course of adjudication proceedings before the original adjudicating authority, the appellant had pleaded that they have only one manufacturing unit at Allahabad, that on account of higher demand for their products, they have entered into loan licence manufacturing agreement and job work agreements with other manufacturers out of raw material supplied by them, that the goods got manufactured on loan licence basis and on job work basis had been cleared by the respective manufacturers on payment of duty but had been sold from the Appellant's depot at Allahabad, that while the loan licence manufacturing agreement is with M/s. Marck Bio Sciences Ltd., Ahmedabad, job wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earances of the goods manufactured by one or more manufacturers in the same factory are required to be clubbed, that the clubbing done by the department is contrary to the provisions of the SSI exemption notification, as the value of the goods manufactured in the factories of different manufacturers is not to be aggregated, that the appellate authority has totally mis-construed para 4.2 of the Chapter 2 of the Excise Manual of the Supplementary Instructions to mean that the appellant are required to club the clearances of the goods got manufactured through other manufacturers under loan licence agreement with the clearances of their own manufactured goods for determining the aggregate value of the clearances from their manufacturing unit, that such an interpretation is totally incorrect, that it is the manufacturer who manufactures goods for another person on loan licence basis, who is required to club the value of the goods manufactured and cleared under loan licence, with the value of the clearances of his own under manufactured in the same factory that accepting the Revenue's contention would amount to charging duty on the same goods twice first, at the time of clearance from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under this notification would be applicable only if the aggregate value of the clearances of all excisable goods for home consumption by a manufacturer from one or more factories or from a factory by one or more manufacturers during preceding financial year does not exceed rupees four hundred lakhs. Thus, for the purpose of determining the eligibility of a manufacturer for SSI exemption, his clearances during the preceding financial year from one or more factories, or clearances for home consumption made by one or more manufacturers from that factory are to be clubbed. Similarly, for the purpose of determining the value of clearances during a particular year, the clearances for home consumption from one or more factories of the manufacturer or one or more manufacturers from a factory are to be clubbed. There is no provision for clubbing the clearances of a manufacturer with the clearances of another manufacturer manufacturing from different premises, unless, there is evidence on record showing that both the units are actually owned by the same person. For this purpose, in this case, just because the appellant exercised some supervision over the manufacture of their goods in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P medicines but who does not have his own manufacturing infrastructure and uses factory of another manufacturer by hiring a shift and in that factory he manufactures the P P medicines using his own raw material and labour used under his own supervision, is a manufacture within the meaning of Central Excise Act, 1944 and the rule made thereunder, has also upheld the validity of para 2 3 of SSI exemption notification no.175/86-CE, which are the provisions corresponding to clause (v), (vi) (vii) of para 2 of the notification no.8/03-CE, the implication of which is that the duty liability of the goods manufactured in the factory of a manufacturer 'A' by a loan licensee 'B' under loan licence agreement is of A only. In this case, from the agreement of the Appellant with M/s. Marck, it is clear that it is an agreement for manufacture of medicines by M/s. Marck for the Appellant out of raw material and packing material supplied by them and the Appellant can not even be called a manufacturer in respect of these medicines manufactured for them by M/s. Marck. In the case of Optho Remedies (P) Ltd. reported in 2012 (276) ELT 327 (All), cited by the learned DR, the provisions of clause (v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of duty are to be clubbed with the value clearances of the appellant for the purpose of availment of exemption under Notification 8/2003. 11. Heard both sides and also seen the submissions made by both the sides before the Division Bench. 12. I find that the Notification No.8/2003 dated 1.3.2003 grants the exemption from Central Excise duty in respect of specified goods up to the first clearances of aggregate value of Rs.1.5 crores made on or after first day of April in any financial year. This exemption is subject to the various conditions mentioned in the notification itself. The main conditions in relation to this case where a manufacturer has more than one unit or more than one manufacturer are clearing the goods from one factory are enumerated in Condition No. (v), (vi) and (vii) of para-2 of the notification. These conditions are reproduced below :- "(v) where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer; (vi) where the specified goods are cleared by one or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the value of the goods manufactured for the appellants by the other manufacturers is to be clubbed with value of the clearances from the appellant's manufacturing unit. As per Condition (V) of the para-2 of the notification where a manufacturer clears the specified goods from one or more factories exemption is applicable to aggregate value of the clearances mentioned against each serial number of the table and not separately for each factory, that means the appellant's clearances are to be aggregated with the clearances made by the other manufacturing unit for the appellants. Similarly as per Condition No. (vii) of the para 2 of the notification for eligibility of the small scale exemption in a current financial year aggregate value of clearances of all excisable goods for home consumption made by a manufacturer from one more factories are to be clubbed and value of these clearances should not exceed Rs. 4 crore in the preceding financial year for eligibility of exemption under this notification in the current financial year. 16. Exclusion of the certain clearances from the aggregate value of clearances is given in para 3 of the notification. The clearances which are exempt fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
