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TMI Blog2024 (1) TMI 1372X X X X Extracts X X X X X X X X Extracts X X X X ..... Heard Mr. A. Rama Krishna Reddy, learned Standing Counsel for the appellant - Department and Mr. Challa Gunaranjan, learned counsel for the sole respondent. 3. Vide the impugned order, the appeal preferred by the respondent-assessee herein, viz., Appeal No.E/158/2008, was allowed by setting aside the Orders-in-Original No.11/2007-CE, dated 30.11.2007, passed by the Commissioner of Customs and Central Excise, Hyderabad I Commissionerate. 4. The question of law for consideration is whether the Tribunal was justified in setting aside the order passed by the Commissioner of Customs and Central Excise, Hyderabad I Commissionerate when the respondent-assessee failed to pay the amount @ 10% on the value of the exempted final product in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both dutiable as well as exempted bulk drugs which in turn is being captively used in their plant for manufacture of the exempted formulations as well. According to the learned Standing Counsel for the appellant -Department, during the course of scrutiny it was observed that the respondent had cleared formulations worth Rs. 2,45,22,438/- for home consumption. Therefore, the respondent was required to pay an amount of Rs. 24,52,244/- being 10% of the aforesaid value of the product cleared from the respondent-assessee payable under the provisions of Rule 6(3)(b) of the Cenvat Credit Rules, 2004. 8. After the above proceedings were drawn, the Commissioner, Customs and Central Excise issued show-cause notice dated 09.03.2007 calling upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be worked out on the total price of final product excluding taxes; (iii) there has to be sale of such goods, and (iv) such goods should be cleared from the factory. He therefore contended that the facts of the present case are not exactly identical to that of Texmo Industries (1 supra), and the mechanism provided under Rule 6(3)(b) of Cenvat Credit Rules, 2004 is required to be followed in the present case for the following reasons. There are material differences between the facts of the case in Texmo Industries (1 supra) and in the instant case. In the case of Texmo Industries (1 supra), the manufacture of PD pumps required assembling of various components of which castings was one. Clearly the metal castings and PD Pump did not belon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be done directly and Bulk Drug shall be converted into formulations which are only to be considered as final product. Hence, it is to state that entire Bulk Drug is used in the manufacture of formulations during direct stream of production. 13. Per contra, learned counsel for the sole respondent contended that there is not much substance in the argument raised by the learned Standing Counsel for the appellant-Department. According to learned counsel for the sole respondent, the Tribunal, as it is, has extensively considered the contentions put forth on either side and relied upon the decision in Texmo Industries (1 supra) delivered by a larger Bench of the said Tribunal, and therefore, the order of the Tribunal cannot be found faul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd diagnostic test kits, specified in List 3 or List 4 appended to the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue), No.21/2002- Customs, dated the 1st March, 2002, (G.S.R.118(E), dated the 1st March, 2002). (B) Bulk drugs used in the manufacture of the drugs or medicines at (A) above -Nil- -Nil- - 2 16. In this context, it would be relevant to look into the Chapter Heading or the Sub-Heading of Tariff Item of the I Schedule. The appellant, at paragraph No.3 of the Grounds of Appeal, has acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption is claimed for both, the bulk drugs and formulations both stand exempted vide Notification No.6/2003-CE, dated 01.03.2003. Therefore, the decision in Ballarpur Industries Ltd. (2 supra) becomes distinguishable on facts itself. Once when there is a specific notification exempting payment of central excise tariff on certain specified items both in the form of bulk drugs and also in the form of formulations where in the course of manufacturing formulations bulk drugs becomes the raw material and the same would stand exempted from payment of central excise tariff. 17. In view of the above, we are of the opinion that no strong case has been made out by the appellant calling for interference of the Final Order No.432/2009, dated 17.03.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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