Savill Pharma Labs Private Limited vs Commissioner of Central Excise

S.S. Sekhon, Member (T)

Three appeals arise from the common order of CCE (Appeals) and are being disposed by this order.

(a) Appellants are an assessee under the Central Excise Act, 1944 for manufacturers of P & P medicaments under heading 3003.10. They availed input credit under the Modvat Scheme and had manufactured and cleared the products manufactured from such inputs for export. The impugned products were manufactured on loan licence basis for M/s. Lyka Laminations Ltd. Declarations and labels of the medicines were duly filed and declaration made that the end products are meant for export under generic names, classification was claimed under 3003.10 since the exported entities were bearing monogram of Lyka Laboratories. They were issued notices challenging the classification under 3003.10 and proposing the same to be effected under 3003.10 subsequent to the dates of clearance. Separate notices earlier to this notice and one subsequent were issued for denial of input credit eligibility on generic medicament and recovery of the input credit under Rule 571. (b) The A.C. confirmed the classification on the relevant declaration under 3003.20 and confirmed the recovery of the credits availed. The Commissioner, in appeal, relying upon Astro. Pharmaceutical''s case 1995 (49) ECC 24 (SC) : (75) ELT 214 (SC) dismissed the appeal and upheld the order of AC. Hence, these appeals.

After hearing both sides and considering the issue, it is found the appellant had taken a plea of rebate of duty paid, on inputs, since the final product had been exported and that would be equivalent to the credit of Modvat was not dealt with by the lower authorities. Since the amounts are entitled as rebate, if not Modvat credit, and quantification of rebate was required to be effected and granted, the orders are bad in law since the alternate plea was not considered. The order is therefore required to be set aside and remanded to the original authority for de novo decision.

Appeal allowed as remand in above terms.