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Commissioner of Central Excise Versus Relief Laboratories Pvt. Ltd.

2016 (6) TMI 576 - CESTAT MUMBAI

Valuation - Under-valuation of goods - Loan license agreement - appellant procured the raw materials himself and discharged the duty liability based upon the cost of production and the profit margin - MAPL clears the same pharmaceutical goods from their depot at higher price - Held that:- it is undisputed that the respondents herein is functioning loan license agreement from MAPL which permits them to manufacture of goods on behalf of MAPL. The respondent has done so as per the agreement entered .....

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e were the requirement of the law for discharge of the Central Excise duty, which we find has been correctly applied in the case in hand. - Decided against the Revenue - Appeal No. E/3243/05 - Order No. A/87960/16/EB - Dated:- 7-6-2016 - Mr. M. V. Ravindran, Member (Judicial) And Mr. Raju, Member (Technical) Shri.SV Nair, Supdt. (AR) for appellant Shri.Gajendra Jain, Advocate for respondent ORDER Per M. V. Ravindran 1. This appeal is filed by the Revenue against Order-in-Appeal No.SVS/149-150/NG .....

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nts, as per in terms of an agreement/authorisation from MAPL. While manufacturing such goods of MAPL, the appellant has procured the raw materials himself and discharged the duty liability based upon the cost of production and the profit margin. The duty paying documents indicate that MAPL as a purchaser and the appellant as a supplier. Subsequently, MAPL clears the same pharmaceutical goods from their depot at higher price. It is the case of the Revenue that Central Excise duty needs to be disc .....

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On consideration of the submission made by the learned DR and perusal of the records, we find that the issue involved is regarding the valuation of the goods manufactured and cleared by the respondent. It is the case of the Revenue that the respondent has under valued the goods. We find no merit in the appeal filed by the Revenue for more than one reasons. Firstly, it is undisputed that the respondents herein is functioning loan license agreement from MAPL which permits them to manufacture of g .....

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llant and MAPL has to be such that there is a margin of 12% to MAPL which in effect means that the price to MAPL has to be less than 12% of MAPL price to their distributors. This mechanism is not a mere formality in fact this has been translated in to actual practice by them as is evident from the work sheet forming part of the SCN. This work sheet shows the difference of 15% to 16% between the price of MAPL to distributors and price to MAPL by the appellant No.1. (xiv) There is neither any alle .....

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been dealt in many cases by various judicial forums to say that in such cases the transaction are to be treated principle to principle basis. The important being Merc Pharmaceuticals Vs. CCE Chandigarh 2005 (68) RLT 455 (CESTAT) (ii) CCE Mumbai Vs.Pharma Com Remedies Ltd. 2003 (156) 934 (iii) Taggas Industrial Development Ltd. Vs. CCE Kanpur 9 order No.777/88 dated 31/10/1988 in appeal No.E/1252/85-C) (xv) Having regards to the aforesaid findings, I am to conclude that the real manufacturer in t .....

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