TMI Blog2015 (4) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... red by him or someone working under him, he becomes responsible or liable under the said Act. There is also a provision in the said Act with regard to getting the drugs manufactured by someone else. So a manufacturer, who is having a license to manufacture, can get the drugs/medicaments manufactured by another person under his supervision and he would be liable if the drugs manufactured by someone else are not as per the prescribed quality. Though the drugs/medicaments might not have been manufactured by the one who is a licensee and the actual manufacturer is guilty of manufacturing substandard drugs, the licensee becomes responsible and liable under the provisions in the said Act. Once the Tribunal, after appreciating relevant evidence, has come to a conclusion that the job workers were the manufacturers and the respondent - the loan licensee, was not the manufacturer, we see no reason to interfere with the said findings of fact, especially when the same is correct and not perverse. We are, therefore, in agreement with the findings arrived at by the Tribunal that the job workers are the manufacturers. Once it has been determined that the job workers are the manufacturers, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise and Salt Act, 1944 in respect of the medicaments manufactured by the job workers and on that basis the respondent was also called upon to make payment of certain duty and the job workers were also called upon to show cause as to why they should not be directed to pay penalty etc. 4. After hearing the concerned parties, the Commissioner came to the conclusion that the respondent was a manufacturer of the medicaments manufactured at the premises of its job workers within the meaning of the provisions of the Central Excise and Salt Act, 1944 and the Rules made thereunder. 5. Being aggrieved by the aforesaid decision of the Commissioner dated 6th August, 2004, the respondent filed the appeals before the CESTAT, Mumbai. The Division Bench of the CESTAT heard the appeals but both the Members of the Bench recorded separate judgments. The Member (Technical) allowed the appeals and set aside the order dated 6th August, 2004 passed by the Commissioner, whereas the Member (Judicial) upheld the said order passed by the Commissioner and held that the appeals were liable to be dismissed. In the aforesaid circumstances, as the said Members had given different opinions, the appeals were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job workers were carrying out manufacturing process under the supervision of the respondent. It had been further submitted that as the loan licensee was the manufacturer of medicaments under its own brand name, the price at which the goods, i.e. the medicaments were being sold was the assessable value in respect of the medicaments in question. The learned counsel had relied upon the judgments delivered in the case of M/s. Ujagar Prints and others v. Union of India and others (1989 (3) SCC 488) and Pawan Biscuits Co. Pvt. Ltd. v. Collector of Central Excise, Patna (2000 (6) SCC 489) to substantiate his case to the effect that the price at which the goods were sold for the first time in the market would be the assessable value of the goods in question. 10. Thus, it had been submitted by the learned counsel that the view expressed by the Tribunal was incorrect and the respondent should have been treated as a manufacturer and the value at which the goods had been sold in the market by the respondent should be treated as assessable value. 11. On the other hand, the learned counsel appearing for the respondent had submitted that the view expressed by the Tribunal was just, legal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondentcompany was a loan licensee as per the provisions of the Drugs and Cosmetics Act, 1940 and the Rules made thereunder. He had submitted that the manufacturer of drugs/medicaments is having certain responsibilities with regard to quality of the drugs manufactured. Even if a manufacturer gets the drugs/medicaments manufactured by another person and sells the same under his brand name, the manufacturer, who has been given license to manufacture the drugs/medicaments, is responsible and is liable under the provisions of the Drugs and Cosmetics Act, 1940. A manufacturer, under the aforestated Act, has nothing to do with payment of duty under the provisions of the Central Excise Act, 1944 and therefore, the revenue authorities should not have looked into the provisions of the Drugs and Cosmetics Act, 1940 for the purpose of determining duty payable under the provisions of the Central Excise Act, 1944. 15. In view of the aforestated legal position, the learned counsel appearing for the respondent had submitted that the appeals should be dismissed as the Tribunal has rightly decided all the relevant issues. 16. We have heard the learned senior counsel for the parties at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see or anybody else manufacturing medicaments for him. 21. The learned counsel appearing for the respondent had also drawn our attention to a copy of one of the agreements entered into between the respondent and the job workers. Upon going through the said agreement, we find that the said agreement shows that the job workers were not assigned the work as agents of the respondent. The said agreement shows that the relationship between the parties is that of the principal and the principal and not that of the principal and the agent. Thus, it is clear that the job workers were not manufacturing the drugs as agents of the respondent or on behalf of the respondent, but they were carrying out the manufacturing activity independently and therefore, they were manufacturers of the drugs as per the provisions of the Central Excise Act, 1944. 22. In the light of the above factual position, it is also pertinent to find out whether the respondent is a manufacturer under the provisions of the Central Excise Act, 1944. Whether a person has manufactured a particular item or whether a person is a manufacturer is a question of fact. Once the Tribunal, after appreciating relevant evidence, has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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