The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand on the clearance of the hemophilus vaccine on the grounds of the absence of a real manufacturer.
Panacea Biotec Ltd, the appellant assessee is engaged in the manufacture of PP Medicaments and has been availing CENVAT credit on inputs, input services, and capital goods as applicable and cleared the final products on payment of duty.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the Excise Duty demand of Rs.1,65,92,802/- against the assessee with equal penalty.
T.R. Rustagi and U.K. Verma, the counsels for the assessee contended that the demand of excise duty under Rule 6(3) of CENVAT Credit Rules (CCR), 2004 was not legally sustainable.
Also submitted that the Commissioner had not considered the assessee’s submission that the Vaccine was not manufactured by the assessee but was manufactured by Panheber, despite the overwhelming evidence produced.
Aneesh Dewan, the counsel for the department contended that the assessee had manufactured and cleared Hemophilus Vaccine which was duty-free and thus was required to reverse 10% of the value of the exempted goods in terms of Rule 6(3) of CCR.
The Bench observed that the department had not negated the claims of the assessee that it was not the assessee who had manufactured the impugned exempted product i.e the Hemophilus Flu Vaccine and no case had been made by the Department to invoke the provisions of Rule 6(3) of the CCR.
The two-member bench comprising S S Garg (Judicial) and Anjani Kumar (Technical) quashed the excise duty demand imposed against the assessee while allowing the appeal filed by the assessee.
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