Relief to Ozone Pharmaceuticals: CESTAT Quashes Excise duty demand for Clearance of Medicines on ground of Absence of Actual Loss to Revenue [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to the Ozone Pharmaceuticals Limited company by quashing the excise duty demand imposed on the clearance of medicines on the ground of absence of actual loss caused to the revenue department. 

Ozone Pharmaceuticals Limited, the appellant assessee is engaged in manufacturing medicines falling under the 1st Schedule to the Central Excise Tariff Act, 1985, and was registered with the department. 

The assessee appealed against the order passed by the Commissioner (Appeals) for upholding the decision of the Deputy Commissioner to demand the Central Excise Duty. 

Rahul Tangri and Shovit Betal, the counsels for the assessee contended that the assessee by utilizing the entire CENVAT credit up to the enactment of the Finance Act, 2003 never got any refund under the Notification in excess and there was no question of recovery by invoking the provision. 

Also submitted that once the amount of CENVAT credit was utilized in the subsequent period, there was no loss to the revenue, and no demand for excise duty was sustainable. 

S.Mukhapadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was allowed to utilize the CENVAT Credit and the demand raised by the department was as per the law and liable to be sustained. 

The Bench observed that the demand of excise duty cannot be confirmed against the assessee if, in the totality of the facts and circumstances of the case, no actual loss had been caused to the revenue. 

The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the excise duty demand and held that the refund claim of the assessee for the subsequent period, could not be rejected on the ground that the assessee had taken excess refund while allowing the appeal filed by the assessee.

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