TMI Blog2015 (11) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... is for M/s. Diya Pharmacy would be used by M/s. Divya Pharmacy for manufacture of finished goods in respect of which they are availing fully duty exemption under notification no. 50/03CE. - even if, the appellant in their ER-1 Returns filed by them, were not separately mentioning the clearances of job work goods to M/s. Divya Pharmacy by availing full duty exemption under notification no. 214/86CE, we are of the prima facie view that the extended limitation period under proviso to section 11A(1) would not be invokable and the duty demand would be sustainable only for the normal limitation period and according to the appellant the duty demand for normal limitation period is only about ₹ 18.5 lakhs. - Partial stay granted. - E/Stay/52607 and 53011/2014 in appeal no. E/52099 and 52583/2014-EX [DB] - Stay Order No. 51706-51707/2015 - Dated:- 9-3-2015 - Shri Rakesh Kumar, Member (Technical) And Shri S.K. Mohantry, Member (Judicial) For the Petitioner : Ms. Anjali Manish, Advocate For the Respondent : Shri Ranjan Khanna, DR ORDER Per: Rakesh Kumar The facts leading to filing of these appeals along with stay applications are, in brief, as under: 1.1 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 10/06/2003. 1.2 The department was of the view that since the final product- Ayurvedic medicines manufactured by principal manufacturer (Divya Pharmacy) Haridwar is fully exempt from duty under notification 50/03CE and as such the plastic containers manufactured by the appellant are being used in the manufacture of final product on which no duty is payable, the plastic containers manufactured by the appellant would not be eligible for exemption under notification no. 214/86CE. It is on this basis that show cause notice dated 1/4/2013 was issued to the appellant for demand of differential duty of ₹ 77,82,267/- from them for the period from 22/5/8 to 16/1/2013 along with interest thereon under section 11AB and also for imposition of penalty on them under section 11AC. Besides this, the show cause notice also sought imposition of penalty under Rule 26 of Central Excise Act, 2002 on Shri Binay Prasad, Director of the appellant company and the show cause notice was issued by invoking extended period under proviso to section 11A1. 1.3 The show cause notice was adjudicated by the Commissioner vide order-in-original dated 29/1/2014 by which the above mentioned duty demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. under notification no. 214/86CE and after the completion of the process, the goods would be returned to their factory for use in the manufacture of final product which are exempted from duty under notification no. 50/03CE; that, thus, the department was aware that the plastic containers being manufactured by the appellant on job work basis under notification no. 214/86CE would be used by the principal manufacturer - M/s. Divya Pharmacy in manufacture of final product which are exempted from duty under notification no. 50/03CE; that in respect of this letter, there was no response from the department and as such the department did not object to the clearance of plastic containers by the appellant to M/s. Divya Pharmacy without payment of duty under notification no. 214/86CE; that in view of this, the appellant company cannot be accused of suppressing any relevant facts from the department and hence, longer limitation period under proviso to section 11A (1) is not invokable; that demand of duty for normal limitation period is only about ₹ 18.05 lakh and the CENVAT Credit available would be about ₹ 17.52 lakhs and thus even if the exemption under notification no. 214/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, pleaded that this is not the case for waiver from the requirement of pre-deposit. 5. We have considered the submissions from the both the sides and perused the records. 6. The appellant company located in Bhiwadi manufactured plastic containers on job work basis to M/s. Divya Pharmacy located in Haridwar. M/s. Divya were availing of full duty exemption under notification no. 50/03CE. There is no dispute that M/s. Divya were received duty paid granules and were sending the same to the appellant unit for manufacture of plastic containers and those plastic containers sent by the appellant were being used by M/s. Divya Pharmacy for packing of the Ayurvedic medicines which were being cleared at nil rate of duty under notification no. 50/03CE. There is no dispute that M/s. Divya Pharmacy have not taken any CENVAT Credit in respect of the plastic granules received by them and the appellant company has also not taken any CENVAT Credit on the plastic granules. There is no dispute that M/s. Divya Pharmacy under their letter dated 6/5/2008 to the Assistant Commissioner Central Excise Bhiwadi the Assistant Jurisdictional Commissioner for the appellant had informed that they would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer of dutiable and exempted final product but he is manufacturing exempted final products only. Therefore, in our prima facie view, the exemption notification no. 214/86CE would not be available. 8.1 Next comes the question as to whether the extended limitation period under proviso to section 11A1 is invokable. In this regard, we find that principal manufacturer-M/s. Divya Pharmacy under their letter dated 6/5/2008 addressed to Assistant Commissioner of Central Excise, Bhiwadi District Alwar under whose jurisdiction, the appellant unit had intimated that they wish to remove the raw material without availing of CENVAT Credit to the appellant unit under notification no. 214/86CE; that the goods manufactured on job work basis would be returned to their factory for manufacture of final product which is exempted from duty under notification no. 50/03CE. Thus, the department was aware of the fact that the goods manufactured by the appellant on job work basis for M/s. Diya Pharmacy would be used by M/s. Divya Pharmacy for manufacture of finished goods in respect of which they are availing fully duty exemption under notification no. 50/03CE. In spite of this, there was no respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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