HIMALAYA DRUG COMPANY Vs. CCE

JUDGEMENT

(1.) These are 4 (Four) appeals filed by the appellants M/s Himalaya Drug Co., Sh. M.A. Manal, Chairman, Dr. Syed Farooq, Partner and Sh. Shabir Shariff, Chief Financial Officer/Partner of Company against Order -in -Original No. 25/2002 dated 24.9.2002 passed by the CCE, Delhi -I Commissionerate, New Delhi.

(2.) On the basis of intelligence that M/s Himalaya Drug Co. (hereinafter referred to as M/s HDC), New Delhi are engaged in the manufacture of Ayurvedic bulk drugs, and clearing the same without payment of Central Excise duty and without obtaining the Central Excise registration, the Central Excise Officer of New Delhi visited the factory premises of M/s HDC, New Delhi on 13.9.2000 to ascertain the facts. On enquiry it was found that M/s HDC was a partnership firm and having three manufacturing units one at Dehradun, second at New Delhi and third at Bangalore.

(3.) Out of these three units New Delhi and Dehradun units were manufacturing the Ayurvedic medicines in bulk form and the Bangalore unit was manufacturing the tablets, syrups etc. They were not paying any duty on the Ayurvedic Medicines manufactured in bulk form at New Delhi on the belief that the goods were being cleared to their own unit at Bangalore or captive consumption and there was no liability of duty on goods being manufactured at New Delhi unit. Further they were paying duty on similar products manufactured at Dehradun unit as medicaments under chapter heading 3003.39 of CETA, 1985. The officers seized the goods found lying in the factory of M/s HDC at New Delhi on reasonable belief that these were liable for confiscation. It was found that M/s HDC, New Delhi was not registered with the Central Excise Department in spite of the fact that their value of clearances of excisable goods had exceeded the SSI exemption limits and they were not entitled for the benefit of exemption as they had crossed the limit of aggregate value of clearances of Rs. 3 crores during the preceding years. M/s HDC, New Delhi got registered with the Central Excise authorities on 14.9.2000 for manufacture of semi -finished Ayurvedic medicines under Chapter heading 3003.39 of the first schedule to the Central Excise Tariff Act, 1985 and filed their classification declaration under Rule 173 -B and started clearing the goods from their Delhi factory to their Bangalore factory on payment of duty. On enquiry from M/s HDC at Dehradun, it was found that the unit was registered on 24.4.97 and they were paying Central Excise duty at the normal rate. The drugs (intermediate stage) were being produced at Dehradun factory and they were being cleared in bulk packing to their unit at Bangalore for further processing. On investigation, it was found that M/s Chemiloids, Khammam Vijayawada, A.P. was also manufacturing almost similar types of items as manufactured by M/s HDC, New Delhi and it was found that they were paying Central Excise duty. Similarly, M/s Charak Pharmaceuticals (I) Ltd., Samalkha, Haryana was also manufacturing similar items as was manufactured by M/s HDC, New Delhi and they have also classified the goods under Chapter Heading 3003.39 and they were paying duty @ 16% on clearance of products outside the factory.