CCE Vs. MODEOPHARM

JUDGEMENT

(1.) All these Revenue appeals arise from Order -in -Appeal Nos.89 to 92/2002 (M -II) dated 12.7.2002 by which he has disposed of four appeals of M/s. Medopharm, M/s. Medopharm Pharmaceuticals, M/s. Medopharm Laoratories and M/s. Dukes Pharma. The Commissioner (Appeals) in the light of the judgment of various Courts and Tribunals has held that for the purpose of computing the toral value of clearances for the purpse of granting venefit of SSI Notification No.l75/86 -CE dated 1.3.1986 (as amended by Notfn. No. 1/93 dt 28.2.1993), the valuation has to be done in terms of Section 4 of the Central Excise Act, 1944 and that the value of duty paid branded goods manufactured by the loan licensees in the appellant M/s. Medopharms' factory should not be added to the assessable value in terms of the judgements cited. The Revenue has not issued show cause notice to all the loan licensees except to M/s. Dukes Pharma whose appeal was allowed and hence their appeal is also taken up along with appeals against the assessee. Revenue contends in these appeals that M/s. Medopharm had furnished the value of clearances under Section 4 in respect of those goods for which clearances had been effected under Notification No. 245/83. The value furnished by the assessee had not been given before the adjudicating authority. The same should therefore be verified as it has been furnished afresh before the Commissioner (Appeals). It is also stated that the value adopted for clearances under Notification No. 245/83 itself denotes the value under Section 4/assessable value for the purpose of assessment. Hence, it is not necessary to work out a separate value under Section 4 for the purpose of availing SSI notification. It is stated that the aggregate value of clearances is nothing but sum of the value of all clearances effected in respect of specified goods. The sum of the value of all clearances would include the value adopted for clearance under Notification 245/83 also. It is stated that adoption of one value for payment of duty while effecting clearance from the factory under Notification No.245/83 and another value for the same clearance under Section 4 for computing the aggregate value of clearances under Notification 1/93 would not be in order and hence 2 different values for the same clearance cannot be considered as argued by the assessee. It is stated that with regard to SSI exemption availed by M/s.Medopharm Pharmaceuticals, it is pointed out that this is a case where more than one manufacturer had operated from the premisses of M/s. Medopharm Pharmaceuticals, namely, M/s. Citadel Pharmaceuticals (P) Ltd., M/s. Citadel Fine Pharmaceuticals, M/s. Franco Indian Remedies and M/s. Medopharm has operated as loan licensees from the premises of and and M/s. Medopharm Pharmaceuticals and the registration certificates were issued to them. It is stated that since various units are chosen to operate from the premises of M/s. Medopharm Pharmaceuticals, the value of clearances of specified goods manufactured by all the units should be clubbed to arrive at the aggregate value of clearances as already held by the High Court in its order dated 6.10.1993. It is stated that assessee had misrepresented the fact before the Commissioner (Appeals) that the specified goods were manufactured by M/s. Medopharm Pharmaceuticals with the brand name of respective compaines viz. M/s. Citadel Pharmaceuticals (P) Ltd., M/s. Citadel Fine Pharmaceuticals, M/s. France Indian Remedies and M/s. Medopharm and claimed for exclusion of the value of clearances of specified goods manufactured with the brand name of others. It is stated that there is no provision in the SSI notification to exclude the value of clearances manufactured by loan licensees. In this regard, the assessee's letter dated 22.12.2002 sent to department is relied.

(2.) We have heard learned JDR Shri A. Jayachandran for the appellent -revenue who argued the case on the basis of grounds made and comments received from the department. He submitted that the matter has to go back to the original authority for the purpose of verification of the figures adopted by the Commissioner. He submitted that these figures were not available with the original authority. Hence, he prayed for remand of the matter to the adjudicating authority.

(3.) In reply, Shri Section Ignatius, learned Advocate vehemently argued and pointed out from the Order -in -Original itself that all the figures adopted by the Commissioner (Appeals) had been placed before the original authority, but he had not accepted those figures and had rejected the plea on a different ground. He also submitted that there was no contradiction in the letter furnished by them. He read out from the Order -in -Original and submitted that the stand taken by them had been consistent that valuation has to be done in terms of Section 4 of the Central Excise Act and value of the duty paid branded goods should not be added in terms of Explanation III in Para -4 of Exemption Notification No. 175/86 as amended by Notification No. 1/93 -CE dated 28.2.1993. He read out Explanation III which clearly states that for the purpose of computing the aggregate value of clearances under paragraph 1, 2 or 3, the clearances of any specified goods, bearing a brand name or trade name (registered o not) of another person, which are not eligible for grant of exemption in terms of provisions of paragraph 4 of this notification shall not be taken into account. He submitted that the loan licensees had filed the classification list and claimed benefit of Notification No. 245/83. He produced copies of classification list of the appellant M/s. Medopharm Pharma for all the years to show that they had not claimed the benefit of Notification No.245/83 -CE dated 13.9.1983 and the grounds made out by revenue is totally incorrect. He pointed out that the Commissioner (Appeals) had scrutinized all the documents including the Chartered Assonants Certificate which was placed in support of their clearances figures and only thereafter, he had accepted the clearance value; The clearance value was part of the original records and the stand taken that it was not, is totally incorrect and against the facts brought out in the Order -in -Original and in the grounds of appeal. He submitted that revenue is not disputing the question of law that valuation under Section 4 is required to be adopted and that the value of branded goods of loan licensees is required to be accepted. He pointed out that there was no show cause notice also issued to the loan licensees except to M/s. Dukes Pharma. He submitted that the issue is no longer res integra and is covered by the judgements rendered in the case of Libra Drugs (India) Ltd. v. CCE Pune , Space Foods (P) Ltd. v. CCE Madras , CCE New Delhi v. Products and Ideas . He pointed out that the judgment of the Tribunal in Libra Drugs (India)'s followed their earlier judgment rendered in the case of Carewell Pharmaceutical v. CCE by final order No. 3837/96 -A dated 11.12.1996 on identical facts. He pointed out that the Appeal Nos. E/576 to 578/2002 pertain to Section 4 - Valuation and Appeal Nos.E/579/02 pertain to deduction of duty paid branded goods in which loan licensees having been made as party by issue of show cause notice and therefore the proceedings is bad in law. He referred to the grounds made out in the cross objections and submitted that the entire valuation figures were placed before the original authority and there was nothing new which were presented to Commissioner (Appeals). Therefore, the Commissioner (Appeals)'s order is just and proper and requires to be confirmed by dismissing the revenue's appeals.