COMMISSIONER OF C. EX. Vs. GENO PHARMACEUTICALS LTD.

JUDGEMENT

(1.) THE appellant (Revenue) filed this appeal against Order -in -Appeal No. GOA/CEX/GSK/66/2011 dated 18 -7 -2011 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Goa, whereby order -in -original No. 10/2010 -11 -CX -Div. I dated 31 -8 -2010 was upheld. The facts of the case is that the respondent, M/s. Geno Pharmaceuticals Ltd. availed Cenvat credit of Rs. 4,21,500/ - in respect of some input services, i.e. GTA/Sales Promotion which was pertaining to use in the factory of their loan licensee, namely, (i) M/s. Elvina Pharmaceuticals, Dharwad and (ii) M/s. Simchem Pvt. Ltd. at Tuem. A show cause notice dated 7 -4 -2010 was issued proposing denial of Cenvat credit on the aforesaid services to the tune of Rs. 4,21,500/ - and also for imposition of penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 15 of the Cenvat Credit Rules. The adjudicating authority dropped the demand on the ground that there is no dispute that the goods are being manufactured by the respondent on their loan license basis. The original authority contended that The Cenvat Credit Rules, 2004 does not define the word manufacturer. However, Rule 2(t) of the said Rules states that words and expressions used in those Rules and not defined but defined in Excise Act or the Finance Act shall have the same meanings respectively assigned to them in those Acts. He referred on the new definition of manufacture in terms of 2(f) of Central Excise Act according to which it has been made inclusive of such person who engages labour in the production or gets goods manufactured on their own accounts, accordingly, the fact of the present case are in consonance with the definition of word "manufacture" and "manufacturer". It was further observed that excisable goods manufactured at Dharwad and Pernem is being manufactured by the assessee on the loan license basis. There is evidence that respondent name also appears on the packs of the medicines and the raw materials was supplied by them to the loan licensee unit. On this basis the learned original authority has dropped the demand. The Revenue aggrieved with the above order -in -original, filed appeal before the learned Commissioner (Appeals) who has upheld the order -in -original. Aggrieved with the order of the learned Commissioner (Appeals), the appellant (Revenue) is before me. The learned Additional Commissioner (AR) appearing for the appellant submits that the credit of Service Tax in respect of the goods GTA and Sales Promotion Service availed by the respondent is in respect of the goods manufactured not in the factory of the respondent but in the factories of M/s. Elvina Pharmaceuticals, Dharwad and M/s. Simchem Pvt. Ltd. Tuem, Goa. He further submits that the goods were manufactured by these two units on job work basis. Thus, the GTA services and Sales Promotion Services were not in respect of the goods manufactured by the respondent, who has taken the credit. He further submits that since the job workers discharged the excise duty and the respondent has neither manufactured nor discharged the excise duty they are not entitled for the Cenvat credit. The job workers in fact have carried out the entire manufacturing process in their factory and it is the job worker who is availing the Cenvat credit in respect of other inputs and input services. Therefore, it is his submission that the credit in respect of GTA and Sales Promotion service which is relatable to the goods manufactured by the job -worker cannot be availed by the respondent. In support he relied upon the following case laws:

(2.) ON the other hand, the learned Counsel for the respondent submits that since the loan licencee M/s. Elvina Pharmaceuticals and M/s. Simchem Pvt. Ltd. manufactured the goods on behalf of the respondent, the respondent is the manufacturer and therefore, they are entitled for the Cenvat credit. In support he relied upon the following judgments:

(3.) THE learned Commissioner (Appeals) has upheld the allowance of the credit on the ground that the Service Tax invoices are in the name of the respondent, payment of Service Tax is done by the respondent. The respondent had the shift and carried out the manufacture under their supervision and the material was also supplied by them. The packing and labels on the manufactured goods indicated that the respondent is the manufacturer. He also given findings on the admissibility of the input services by referring the judgment of Coca Cola India Pvt. Ltd. v. CCE - : 2009 (242) E.L.T. 168 (Bom.) : 2009 (15) S.T.R. 657 (Bom.). The undisputed fact in this case is the respondent is not the actual manufacturer, the excisable goods is manufactured by M/s. Elvina Pharmaceuticals and M/s. Simchem Pvt. Ltd. even though on behalf of the respondent. The input services in question is undisputedly related to the goods manufactured by the said two units. In terms of Section 2(f), the person who carries out the manufacturing activity is the manufacturer and such manufacturer only shall be entitled to Cenvat credit in respect of input services relatable to the goods manufactured in the units of such manufacturer. It makes more clear from the following definitions of Rule 2 of Cenvat Credit Rules: