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TMI Blog2023 (11) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... n operating lease agreements from its associate M/s Panacea Biotec Pvt. Ltd. (the appellant); these are generally non-cancellable and are renewable by mutual consent on mutually agreed terms. The books of accounts do indicate that lease amounts have been paid to the appellant. Learned Commissioner has relied upon the fact that there are not records maintained by M/s Panheber and that the records maintained by the appellant do have the entries for the manufacture of the said vaccine - It is also not on record whether any communication or correspondence was made with the Drug Authorities to ascertain the claims of M/s Panheber and the appellants. Drug manufacturing being closely monitored by various agencies and subject to various controls cannot happen in a secretive manner. It is on record that various authorities, national and international, have visited the facility where M/s Panheber have manufactured the vaccines. Under the circumstances, the claim of the appellants cannot be simply brushed aside saying that they might have contravened Drug Laws and that it was a flimsy stand taken by the appellants. The Department having not negated the claims of the appellant that it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.2019 dismissed the appeal; on an ROM application filed by the appellant, this Bench vide Misc. Order No.60157/2021 dated 24.09.2021 has restored the appeal observing that certain arguments advanced by the learned Counsel for the appellants, escaped consideration while passing the order cited above. Hence, this appeal. 3. Shri T.R. Rustagi, learned Counsel for the appellants, submits that the demand under Rule 6(3) of CCR, 2004 is not legally sustainable. It was held in Tiara Advertising- 2019 (30) GSTL 474 (Telangana) that Rule 6(3) of CCR, 2004 merely offers options to an output service provider who does not maintain separate accounts in relation to receipt, consumption and inventory of inputs/ input services used for provision of output services which are chargeable to duty/ tax as well as exempted services; if such options are not exercised by the service provider, the provision does not contemplate that the service tax authorities can chose one of the options on behalf of the service provider; as rightly pointed out by Shri S. Ravi, learned Senior Counsel, if the petitioner did not abide by the provisions of Rule 6 (3) of CCR, 2004, it was open to the authorities to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard. 5. Learned Counsel further states that the show-cause is based on the entries made in RG-1 and RG-23A registers and therefore, the Department cannot allege that the fact was not in the knowledge of the Department and therefore, extended period cannot be invoked in view of the following cases: CCE Vs ITC Ltd.- 2013 (291) ELT 377 Praj Ind. Ltd.- 2014 (36) STR 1273 (Tri. Mumbai). Cellular Ltd.- 2009 (16) STR 712. 6. Shri Aneesh Dewan, learned Authorized Representative for the Department, on the other hand, submits that it is incorrect to state that this Bench has not considered several alternate submissions advanced by them while passing the previous order. He submits that it is incorrect to say that the entire credit being received from the input service distributor (ISD), Rule 3 of CCR, 2004 is not applicable; there is no such exclusion in the said Rule. He submits that the appellant s contention, that the appellants cannot be asked to pay 10% of the value of the exempted goods by virtue of retrospective amendment to the Rules by Section 73 of the Finance Act, 2010, is incorrect; it is clear that the retrospective amendment made in the CENVAT Credit Rules wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance of exempted goods. We find that learned Commissioner further finds though M/s Panheber had a license to manufacture the impugned vaccine, there is no documentary evidence to prove that the same was manufactured by them in the impugned premises; they might have even contravened the provisions of Drug Law, camouflaging things and that this was not ethical for the noticee to take this kind of plea. 10. On going through the records, we find that the Drug Controller has categorically clarified vide Letter dated 06.04.2017 that M/s Panacea Biotec Pvt. Ltd. and M/s Panheber Biotec Pvt. Ltd. were issued different drug manufacturing licences for separate modules in the year 2008 and that M/s Panheber Biotec Pvt. Ltd. has been renamed as M/s Panera Biotec Pvt. Ltd. registered with the same address. We find that there is an Agreement dated 10th July, 2008 between the appellant and M/s PanEra Biotec Pvt. Ltd. and the same is named Agreement for providing manufacturing facility, utilities and services of employees . Similarly, the books of accounts of M/s Panheber Biotec Pvt. Ltd. indicates that they have taken various assets situated at Lalru, Punjab on operating lease agreements fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negated the claims of the appellant that it was not the appellants who have manufactured impugned exempted product i.e the Hemophilus Flu Vaccine. Therefore, we find that no case has been made by the Department to invoke the provisions of Rule 6(3) of the CCR, 2004. 12. Coming to the alternate submission that Rule 6 provides for the situations where a manufacturer manufactures dutiable as well as exempted products and avails CENVAT credit on all the inputs/ input services/ capital goods and that the options given under Rule 6(3) of CCR, 2004 cannot be enforced, we find that as submitted by the learned Counsel for the appellants that Hon ble High Court of Telangana has clearly interpreted the provisions in favour of the appellants. The findings of the Hon ble High Court are clear that Rule 6 does not provide any mechanism for recovery of the said 10% amount and that the Department is free to invoke Rule 14 of CCR, 2004 to demand wrongly availed credit, if any. We find that the Tribunal has followed this decision in the cases as cited above. We find no reasons to differ from the decision of the Tribunal for the reason that in the impugned case also though Rule 14 has been invok ..... X X X X Extracts X X X X X X X X Extracts X X X X
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