TMI Blog2005 (7) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... arges. There is an agreement between the appellants and M/s. USV, Bombay. On going through the agreement, we are convinced that the appellant is a job worker who carries out the entire manufacturing process in their factory after receiving raw materials from M/s. USV. The agreement has got a termination clause also. According to Clause 13.2 cited, each party may terminate the agreement at any time by giving to either party three months notice in writing. The adjudicating authority has mainly relied on the Indica decision [ 1989 (5) TMI 72 - HIGH COURT OF GUJARAT AT AHMEDABAD] of the Gujarat High Court and held that M/s. USV are the manufacturers of the goods manufactured in the appellants premises. The Indica case, has been elaborately gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court of Gujarat in the case of Indica Lab Pvt Ltd. v. UOI reported in 1990 (50) E.L.T. 210 (Guj.) wherein it was held that in respect of P or P medicaments manufactured on loan licence basis, only the loan licensee should be treated as the manufacturer. In the present case, M/s. USV Ltd., Mumbai is the loan licensee. Hence, according to Revenue, duty should be discharged on the value adopted by M/s. USV. Relying on the Indica judgment, the adjudicating authority demanded differential duty of Rs. 1,64,88,674/- for the period from February 2003 to November 2003 under Section 11A of the Central Excise Act, 1944. The penalty of Rs. 10 lakhs was imposed on the appellants under Rule 25 of the Central Excise Rules, 2002. Interest in terms of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a concept under the Central Excise law. (v) The Commissioner ought to have appreciated that the test laid down by Indica Laboratories case was of utmost importance namely that it contemplated first that the loan licensee hired on shift or shifts in the factory of the job worker and had the goods manufactured under their control and supervision. (vi) In view of the above, the Indica Lab decision will not be applicable if the goods were independently manufactured by the job worker using their own labour without the control and supervision of the supplier of raw material. As per clause 5.4 of the agreement between the appellants and USV the product in question would be manufactured by the appellants and that the appellant would carry out appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of the decision of the Hon'ble Tribunal in the case of ICI India Ltd. v. Commissioner [2001 (133) E.L.T. 600 (Tri. - Bang.)]. The appellants were manufacturers of the products in their factory premises with their work force and they had not at all rented or leased the said premises to USV which was contemplated in para 12 of the judgment in the Indica Lab case. (ix) The Commissioner ought to have appreciated that the hiring of shifts means that the labour force should have been that of USV and not of the appellants. It was not the department's case. Consequently, the Commissioner could not at all rely upon any of his judgment referred to in the impugned order. (x) The Commissioner erred in holding that the appellants were manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of Indica Lab the Bench consisting three member held that unless such loan licencees get their goods manufactured out of raw materials supplied by them by exercising supervision, control in another factory by hiring the factory on shift or shifts they cannot be held to be manufacturer of medicines in the other factory , and even in the Indica case, Gujarat High Court after going into the Drugs and Cosmetics Act and also Section 2(f) of the Central Excise Act has held as follows :- From the various other judgments of different high courts and the Supreme Court interpreting provisions of Section 2(f) of the Act on the same line, in view of the aforesaid settled legal position and in the light of the provisions of the Central Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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