DOLPHIN LABORATORIES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) IN these two appeals, filed by M/s. Dolphin Laboratories Ltd., the issue involved is whether they are the manufactures of Gesdyp and dolamide or M/s. Ranbaxy Laboratories Ltd.

(2.) SHRI B L Narasimhan, learned Advocate, mentioned that the Appellants manufacture Patent or Proprietary Medicines by using their own raw materials; that they also act as job worker for M/s.Ranbaxy Laboratories Ltd. (M/s. Ranbaxy in short) under an Agreement; that M/s. Ranbaxy supply the necessary raw materials for the manufacture of medicines; that they clear these medicines on payment of Central Excise duty on the principles of valuation laid down by the Supreme Court in Ujagar Prints v. UOI -1989 (39) ELT 493 (SC) and 1988 (38) ELT 5355 (SC), that the Department has confirmed the demand of duty of Excise and imposed penalty on the ground that M/s. Ranbaxy are loan licensees and thus are the manufacturers of the impugned goods as they get the impugned goods manufactured under their own control or supervision and out of their own raw materials and accordingly the duty is payable on the basis of price at which the goods are sold by M/s. Ranbaxy from their depot in terms of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.

(3.) THE learned Advocate submitted that in the Order -in -Original the Deputy Commissioner has held that M/s. Ranbaxy are the manufacturers of the impugned goods and the Appellants are manufacturing the goods on behalf of M/s. Ranbaxy under a loan -licence agreement and that the movement of goods from the factory owned by M/s. dolphin Laboratories to the Depot M/s. Ranbaxy is simply a stock transfer from a factory to a depot and is not sale of goods and the goods in fact are sold from the Depot of M/s. Ranbaxy only. The learned Advocate contended that if according to the Department, M/s. Ranbaxy Laboratories Ltd. are the manufacturers of the goods in question, duty of excise has to be demanded from them (M/s. Ranbaxy) and not from the Appellants; that even no show cause notice has been issued by the Revenue to M/s. Ranbaxy for demanding the duty; that no duty liability can be fastened on the appellants as they are not manufacturers of the goods according to the Department. The learned Advocate, further, submitted that the agreement between M/s. Ranbaxy and the Appellants is on principal to principal basis; that none of the terms and conditions of the Agreement even remotely suggests that Ranbaxy exercises any type of control or supervision over the appellants; that in fact the show cause notice does not make any such averment of control and supervision by M/s. ranbaxy; that thus they should be treated only as a job -worker and the transaction between them cannot be given any different colour; that the decision in the case of Indica Laboratories Pvt. Ltd. v. UOI - 1990 (50) ELT 210 (Guj) is not applicable, the loan licensee was exercising supervision and control over the manufacture and manufacturer had simply given his facility for the manufacture of goods. The learned Advocate relied upon the following decisions: