BIOTECH SYNERGY LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Biotech Synergy Ltd., is whether the Modvat Credit of the duty paid on their finished goods received back, was eligible to them.

(2.) Shri K.K. Anand, learned Advocate, submitted that the appellants manufacture basically bulk drugs and avail Modvat Credit of the duty paid on the inputs under Rule 57A of the Central Excise Rules, 1944 at the material time; that during the period from March, 1997 to August, 1997, they had availed Modvat Credit of the duty in respect of three consignments of bulk drugs, which were cleared earlier by them on payment of duty; that these goods were not accepted by the consignees and they had to receive the same back into the factory; that they availed Modvat credit on returned goods; that the returned goods were reprocessed and were cleared subsequently on payment of Central Excise duty; that the Deputy Commissioner has, however, disallowed the Modvat Credit on the ground that they should have followed the procedure prescribed under Rule 173H of the Central Excise Rules and they had not produced any evidence in support of their contention that the returned goods had actually been used in their manufacturing process; that the appeal, filed by them, has also been rejected by the Commissioner (Appeals), under the impugned order, holding that the conversion of drugs confirming to IP standard to that of BP standard does not amount to manufacture. The learned Advocate, further, submitted that the appellants had filed the declaration under Rule 57G of the Rules with the jurisdictional Assistant Commissioner indicating the description of the final products and the inputs, Rifampicin IP, Cephalexin IP and 7 -ADCA intended to be used in the manufacture of their final product and obtained the dated acknowledgement; that, accordingly, they had taken the Modvat Credit of the duty paid on the declared products; that they had entered the receipt of all the goods in their R.G. 23 -A Pt. I and the finished goods were re -entered in R.G. I Register; that it has been held by the Appellate Tribunal in the case of Fimco Elecon (India) Ltd. v. CCE, 1991 (56) E.L.T. 654 (Bom. -CEGAT) and ABS Industries Ltd. v. C.C.E., 1999 (112) E.L.T. 407 that the credit could be availed of on the goods returned back to the appellants. Finally, the learned Advocate submitted that the show cause notice was issued to them only on the ground that they had availed the Modvat Credit on the basis of their own invoices for the consignments which had been rejected by their customers and, in fact, they should have brought those products under Rule 173H of the Central Excise Rules.

(3.) Countering the arguments, Shri Virag Gupta, learned DR, reiterated the findings, as contained in the Order -in -Original and impugned order and emphasised that the appellants have not produced any proof that the goods returned back were used in the process of manufacture.