HINDUSTAN ANTIBIOTICS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal and stay petition are directed against order -in -original No. PUN -EXCUS -001 -COM -045 -13 -14 dated 16 -1 -2014 passed by the Commissioner of Central Excise, Pune. Vide the impugned order, a duty demand of Rs. 1,02,74,703/ - has been confirmed against M/s. Hindustan Antibiotics Ltd. under the provisions of Section 11D(3) of the Central Excise Act, 1944 along with interest thereon under Section HDD. Aggrieved of the same, the appellant is before us.

(2.) THE learned Consultant for the appellant submits that M/s. Hindustan Antibiotics Ltd. is not the manufacturer in the present case. They are supplying specified medicines to Government hospitals for which prices have been fixed by National Pharmaceutical Pricing Authority (NPPA) under DPCO, 1995. The medicines are procured by them from various manufacturers, some of which are located in duty exempt zone. They had invited tenders for supply of medicines from manufacturers situated both in the duty paying zone and duty exempt zone at the NPPA fixed price minus 26.5% or 12%, as the case may be. The medicines so procured were supplied to Government hospitals. In the invoices issued for the supply, the prices fixed by the NPPA are only indicated which include the excise duty element also. The Revenue was of the view that in respect of medicines procured from the manufacturers situated in duty exempt zone, since the price includes excise duty, the appellant is recovering this element of duty through the pricing mechanism. Therefore, the appellant is liable to pay a sum equal to excise duty to the exchequer under the provisions of Section 11D(1A). It is his contention that since they are not the manufacturer of the medicines, the liability to pay duty is not cast upon them. Since they are not collecting any payment by way of excise duty from the buyers, the question of paying any amount to the exchequer equal to excise duty also does not arise. He relies upon the decision in the case of JOCL reported in, 2012 -TIOL -893 -CESTAT -MAD in support of his contention. Accordingly, he pleads for grant of stay.

(3.) 1 Section HD(1A) of the Central Excise Act, reads as follows: