CEPHAM LABORATORIES LTD., MR. Vs. CCE

JUDGEMENT

(1.) THE issue arising in these appeals is connected. Accordingly, they are being heard together and disposed of by this common order.

(2.) APPELLANT M/s Cepham Organics are manufacturers of (i) Ampicillin Trihydrate/Anhydrous IPBP, (ii) Amoxycillin Trihydrate IP/BP and (iii) Cloxacillin Sodium IPBP. These drugs are subject to Central Excise duty. The inputs going into their production are also eligible for credit (MODVAT) of Central Excise duty paid on them.

(3.) DURING the period April, 1993 to July, 1997, the appellants received inputs like Pencillin -G, Menthaoil, HCL, Ammonia Gas, Methalene Chloride and Toluene and took credit of duty paid on them. These inputs are to be first converted into an intermediate product, 6 APA. M/s Cepham Organics does not undertake this conversion of the inputs into 6 APA for some technical reasons like the danger of contamination of other products manufactured in the factory. The inputs are therefore, transferred to the other appellant, namely M/s Cepham Laboratories Ltd. That appellant converted the inputs into 6 APA and sent the 6 APA back to M/s Cepham Organics. Thereupon, the intermediate product was used in the manufacture of the above mentioned drugs which were cleared on payment of duty. It may be noted at this stage that both the appellant manufacturers are located in the same premises. Another relevant fact to be noted here is that M/s Cepham Laboratories undertakes the manufacture of 6 APA for other bulk drug manufacturers also.