INTAS PHARMACEUTICALS LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE two appeals are directed against Order -in -Appeal No. 344 to 345/2006(Ahd -II)CE/Raju/Commr(A) dated 22.12.2006. Since both the appeals raised a common question and in respect of the very same assessee, we dispose of the appeals by a common order.

(2.) BRIEF facts of the case is that the appellant is engaged in the manufacture of Pharmaceutical products falling under Chapter No. 30 of Central Excise Tariff Act, 1985 and has availed modvat credit on the specified inputs used in the manufacture of both generic medicines as well as P.P. medicines. The generic medicines were exempted prior to 02.6.1998 and P.P. medicines were chargeable to duty. Keeping common accounts for the inputs used in the manufacture of dutiable as well as exempted final products, the appellant debited an amount equal to 8% of the price in respect of generic products under the erstwhile Rule 57CC of the Central Excise Rules, 1944; that since the amount reversed at the rate of 8% of the price under Rule 57CC of the Central Excise Rules, 1944 is an adjustment of credit of duty taken on inputs used in the manufacture of exempted final product and that the same is not in the nature of any duty, the burden of such amount had to be borne by the manufacturer himself and can not be passed on the customers. The appellant had however, in the instant case charged and collected the said amount from their buyers. Therefore the show cause notices were issued to the appellant covering the period from June 1997 to February 1998 and march 1998 to June 1998 stating that the appellant has collected an amount of Rs. 18,74,125/ - and Rs. 5,89,881/ - respectively against clearance of exempted generic medicine in the guise of Central Excise duty and the same is required to be deposited to the Government account under the provisions of Section 11D of the Central Excise Act, 1944. The adjudicating authority has confirmed the demand of Rs. 18,74,125/ - and Rs. 5,89,881 under Section 11D(3) of the Central Excise Act, 1944. Aggrieved by such an order in original, appellant preferred appeals before the first appellate authority. The first appellate, after following the due process of law has rejected/dismissed the appeals filed by the appellants hence the appellants are before the Tribunal.

(3.) LEARNED departmental representative on the other hand would draw our attention to the invoices issued by the appellant and submitted that in the said invoices the appellant did not indicate separate payment of the 8% of the value. After making such submission, he would take us through invoices issued by the appellant for the clearances of the goods to their depot and submit that on the invoices it is categorically mentioned as percentage of excise duty. It is his submission that the appellant herein had indicated on the duty paying duty as collection of excise duty of an amount which is 8% of the value of the exempted goods which they are not supposed to do so. It is his submission that having indicated on the duty paying duty as excise duty collected, the ratio of Hon'ble High Court of Gujarat decision in the case of Inductotherm India Private Limited - : 2012 (283) ELT 359 (Guj.) would apply. He would submit that Hon'ble High Court has categorically laid down that any amount which is collected and not to be discharged by the appellant as excise duty, would not be debited in cenvat account and the provisions of Section 11D will apply in such a situation and assessee is required to pay over and above the amount debited in the cenvat account.