KALPESH SATYENDRA JHAVERI,J. - (1.) By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department confirming the order of the Commissioner (appeal) which has allowed the appeal of the assessee.
(2.) The facts of the case are that M/s Medicamen Biotech Ltd., SP- 1192, A and B, Phase-IV, Industrial Area, Bhiwadi, engaged in the manufacture of P and P Medicine and Generic Medicine falling under Chapter Heading No.3003 of the Schedule to the Central Excise Tariff Act, 1985 appeared to be liable to pay Central Excise Duty to the tune of Rs. 33,18,196/- on account of wrong availment of Cenvat Credit on inputs used in exempted goods in contravention of Rule 6(1) of Cenvat Credit Rules, 2004 (for short CCR, 2004). The assessee have been manufacturing Life Saving Drugs and availing exemption benefit under Notification No.6/2006-CE dated 01.03.2006 as amended. The assessee has been clearing life saving drugs for export under bond in addition to clearance in the domestic market. They were also taking the credit in respect of inputs used in the manufacture of exempted life saving drugs on the basis of Sub-Rule 6 of Rule 6 of the CCR, 2004 cleared for export under bond as per Rule 19 of Central Excise Rules, 2002 (for short CER, 2002).
(3.) Counsel for the appellant Mr. Kinshuk Jain has taken through the order of the Tribunal and contended that subsection (1A) which was inserted on 13.5.2005 in section 5A of the Central Excise Act, 1944 reads as under:- (1A) for the removal of doubts, it is hereby declared that where an exemption under subsection (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall pay the duty of excise on such goods. 3.1 He has further taken us to ground (F) of the appeal which reads as under: F. That in the instant case period involved is April 2006 to March 2007 i.e. after 13.05.2005 and Notification No.6/2006-CE dated 01.03.2006 was issued under sub-section (1) of section 5A of the Central Excise Act, 1944. Therefore, the assessee was at liberty to avail the benefit of above said notification. Since the goods i.e. life saving drugs were unconditionally exempted, it was the sweet will of the manufacturer to avail to avail the same, rather, the manufacturer was bound to avail the exemption notification. 3.2 He contended that there was no bond given whereas the appellant has cleared by giving bond to the Department. He has emphasised on the observations of the original authority which reads as under: 3. "The assessee has been manufacturing Life Saving Drugs and availing exemption benefit under Notification NO.6/2006-CE dated 01.03.2006 as amended. The assessee has been clearing life saving drugs for export under bond in addition to clearance in the domestic market. They were also taking the credit in respect of inputs used in the manufacture of exempted life saving drugs on the basis of Sub-Rule 6 of Rule 6 of the Cenvat Credit Rules, 2004 cleared for export under bond as per Rule 19 of Central Excise Rules 2002. 4. The assessee was statutorily required to execute a Bond in the case of export of exempted goods (life saving drugs) as there is no duty chargeable on the goods which was required to be safeguard by way of debiting in the Bond. On plain reading of provisions of Rule 6(6) of the Cenvat Credit Rules, 2004. It appeared that the same area applicable to the goods which are dutiable and are moved without payment of duty for the reasons mentioned therein. Since the said goods manufactured by the assessee were exempted by virtue of aforesaid notification. It appeared that the case of the assessee is covered under the said provisions and the assessee was eligible to take Cenvat Credit in respect of inputs used in the manufacture of exempted goods which were exported. The irregular Cenvat credit so taken is utilized for payment of duty on clearance of other dutiable goods in the domestic market. 13. In this regard, I also refer sub-section(1A) which was inserted on 13.05.2005 in section 5A of the Central Excise Act 1944 which reads as under:- (1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section(1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall pay the duty of excise on such goods. 14. In case every manufacturer chooses to opt the absolute exemption then in such case the purpose of the legislature granting full exemption would be defeated and the benefit which is required to be passed on to the buyers of the goods would reach to then. This appears the intention of the legislature while granting unconditional exemption to any of the goods. 3. 3 He has also invited our attention to the order of the Tribunal and argued that the judgment sought to be relied upon by the Tribunal will apply to the facts of the present case.;