COMMISSIONER OF CENTRAL EXCISE Vs. OKASA LTD

JUDGEMENT

(1.) To state in brief, the respondents are manufacturers of Pharmaceutical product falling under Chapter 30 of the Central Excise Tariff Act, 1985. They inter alia manufacture Pediatric drop for children. They filed declaration under Modvat Scheme declaring the plastic dropper supplied with the bottle containing drops as an input used in or in relation to manufacture of final product namely Novamox product (Pediatric drops). However, the department objected this on the grounds that this droppers are separately kept in the cartons sealed bottle of the Pediatric drop. These droppers are neither used in the manufacture of pediatric drop nor used in relation to the manufacture of the final product.

(2.) Show cause notice was issued to the Respondents and the case was adjudicated upon. The Assistant Commissioner disallowed the credit of duty paid on plastic droppers. Appeal against the said Order of the Assistant Commissioner was also rejected by the Commissioner (Appeal) vide his Order-In Appeal No. GS/1023/BI/93 dated 20.11.1992.

(3.) Being aggrieved by the dismissal of the appeal by the learned Commissioner (Appeals), the respondents filed Appeal No. E/ 1897-Bom. before the Customs, Excise and Gold Control Appellate Tribunal (CEGAT). That appeal was allowed by the Order dated 14.10.1996 relying upon a decision of the Tribunal in the case of (Heal Well Pharma), 1994(72) E.L.T. (Tribunal). The Revenue filed Reference Application before the Tribunal in the present case as well as in the Heal Well Pharma case. The Tribunal framed the following question:-