COMMISSIONER OF C EX Vs. AUROBINDO PHARMA LTD

JUDGEMENT

(1.) This common judgment would suffice to dispose of these four appeals under Section 35G of the Central Excise Act, 1944 (the Act) filed by the Revenue against the common order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore, (CESTAT), dated 19-3-2009, in Final Order Nos. 578 to 582 of 2009, 2010 (249) E.L.T. 415 (Tribunal)]. By the said order, CESTAT dismissed the appeals filed by the Respondent herein, affirming the common order of the Commissioner of Customs and Central Excise (Appeals) being Order-in-Appeals dated 5-4-2007.

(2.) The Respondent, M/s. Aurobindo Pharma Ltd., (APL) have their units in different areas surrounding Hyderabad. They are a company engaged in the manufacture of bulk drugs and bulk drug intermediaries. In the process of manufacture, they use considerable varieties of solvents like methylene chloride, methanol, acetone, isoprophy alcohol, ethyl acetate, MIBK, chloroform. It is the admitted case before this Court that the spent solvents are purified by the process of distillation in reactors and re-used by the APL as solvents. The excess spent solvent is sold at Re. 1/- per litre/Kg. to the dealers, who in turn sell it at Rs. 2/- to Rs. 5/-. The APL allegedly assessed nominal excise duty at Re. 1/- per Kg.

(3.) During the scrutiny of records, it was revealed that APL had cleared spent/distilled/recovered solvents without raising central excise invoice, and without payment of duty. It was also revealed that certain amount of spent/distilled/recovered solvents, in the guise of waste industrial solvents, was undervalued. Therefore, the jurisdictional Commissioner (Appeals) issued show cause notice dated 30-3-2001 proposing to levy duty, interest and penalty under Rule 173Q of the Central Excise Rules 1944 (the Rules). Be it noted, four such show cause notices were issued to four units of the Respondent covering the period from 1995-1996 to 2000-2001. APL submitted their explanation denying any liability. The Commissioner (Appeals), by order dated 29-11-2003, adjudicated the matter and levied duty, penalty and interest under Sections 11A, 11AB and 11AC of the Act and under Rules 9(2) and 209A of the Rules. The Commissioner (Appeals), however, set aside the order in original relying on the decision in M/s. Vorin Laboratories Ltd., Hyderabad vide Order-in-Appeal Nos. 78 and 79/2003 (H-I) C.E. The appeal filed by the Revenue before the CESTAT was, however, allowed and the matter was remanded. After such remand, the Commissioner (Appeals), by order dated 5-4-2007, held that spent solvent is not a product excisable to duty and accordingly rejected the department's contention. In the second round of litigation before the CESTAT, the Revenue was again unsuccessful.