RANBAXY LABORATORIES LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Appellants have filed the present appeal against the order dated 30.4.2010, passed by Customs Excise & Service Tax Appellate Tribunal, which stands admitted on the following substantial question of law:-

(2.) The appellants are engaged in manufacture of medicament classifiable under Chapters 29 and 30 of the first Schedule of the Central Excise Tariff Act, 1985. The finished goods manufactured by the appellants are sold in domestic and international market. For substantial expansion, appellants set up a unit within the State of Himachal Pradesh to avail the benefit of exemption on finished goods under Notification No.50/2003-CE dated 10.1.2005. Declaration in that regard was filed by the appellants with the Central Excise Division, on 10.1.2005. Appellants took cenvat credit on inputs procured prior to 10.1.2005 and utilized the same for discharging excise duty on the finished goods. Out of the inputs procured prior to 10.1.2005, some stock of inputs were lying with them as on 10.1.2005. With respect to these inputs appellants did not reverse the proportionate cenvat credit since at the time when these inputs were procured, cenvat credit was validly taken and utilized.

(3.) On 21.11.2005 a show cause notice was issued by the Revenue with respect to the inputs lying in stock as on 10.1.2005. As per the Revenue, appellants wrongly took cenvat credit. Appellants responded to the same. The Commissioner of Central Excise, Chandigarh adjudicated the matter and vide its order dated 17.11.2006 confirmed the demand and additionally imposed penalty in the following terms:-