COMMISSIONER OF CUSTOMS Vs. ZYG PHARMA PVT. LTD.

JUDGEMENT

(1.) The present appeal has been filed by the Excise Department under sub-Section (2) of Section 35-G of the Central Excise Act, 1944 against the order dated 26-2-2016 passed by the Customs, Central Excise and Service Tax Tribunal, New Delhi.

(2.) Facts of the case reveal that the respondent-assessee M/s. Z Y G Pharma Pvt. Ltd., is a manufacturer of P. P. Medicaments falling under Chapter Heading No. 30 of the First Schedule to the Central Excise Tariff Act, 1985. The respondent-assessee is also availing CENVAT credit facility of duty paid capital goods received in the factory as well as service tax paid on services received. An audit was carried out in respect of records of the assessee and it was pointed out by the audit that the assessee has taken CENVAT credit of Rs. 36,90,921/- on prefabricated building items, doors and office furnitures under Chapter Heading No. 9406, 7308 and 9403 by treating them as capital goods during the period 2007-2008 to 2010-2011 and 2011-2012 upto December, 2011. A Show Cause Notice was issued on 23-4-2012 to the respondent-assessee and the assessee filed the reply in the matter. The Assessing Officer has finally passed an Order in Original on 14-11-2013 and a demand to the tune of Rs. 36,90,921/- has been confirmed along with an equivalent penalty of Rs,36,90,921/-. The respondent-assessee, in turn, preferred an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) has allowed the appeal of the assessee by order dated 3rd September, 2014. Thereafter, the Department has preferred an appeal before the Appellate Tribunal and the Appellate Tribunal by impugned order dated 26-2-2016, has dismissed the appeal preferred by the Department.

(3.) Learned counsel for the appellant-Excise Department has vehemently argued before this Court that the appellant is a manufacturer of Pharmaceuticals and took credit of duty paid on wall panels and doors. He has also argued that the Adjudicating Authority has rightly held that the impugned goods were neither input, nor capital goods and, therefore, the assessee had deliberately taken credit by indulging in wilful misstatement or suppression of facts. He has further argued that the Commissioner (Appeals) has erroneously held that the impugned goods were eligible to be called inputs and has allowed the credit. The matter has been minutely scanned by the Tribunal and the Tribunal in paragraphs 4 to 6 has held as under :