Commissioner of Central Excise Vs. Abbot Laboratories

Commissioner of Central Excise vs Abbot Laboratories

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Aug 26, 2003

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Citation: sooperkanoon.com/31956
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S T Gowri, K Kumar
Decided On: Aug 26, 2003
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Abbot Laboratories

Excerpt

1. abbot laboratories, the respondent to this appeal was engaged in the manufacture of medicaments. some of the medicaments that it manufactured was packed in plastic bottles which were manufactured and supplied to it by interpack containers. the manufacturer of the bottles took credit of the duty paid on plastic raw materials required for their manufacture from utilising towards payment of duty on the bottles. abbot laboratories in turn took credit of the duty paid by interpack containers on the bottles. notice issued to abbot laboratories proposed to deny the credit taken by it on the ground that the plastic bottles were fully exempted from duty by virtue of entry 37 of the table to notification 14/92 and therefore interpack containers could not have availed of the modvat facility in respect of these bottles. adjudicating on the notice, the commissioner was of the view that the exemption contained in entry 37 of the table to notification gave a manufacturer an option to pay duty or not to pay duty. further entry 38 provided for partial exemption to these goods. he therefore found nothing incorrect on payment of duty by interpack containers and therefore the taking of duty as credit by abbot laboratories. his order is appealed by the commissioner.2. we have heard the departmental representative. respondent is absent and unrepresented despite notice.3. the ground in the appeal is that the manufacture of goods which are exempted from duty by notification has no option to pay duty and if he choose to pay any duty, it is not in the nature of duty but deposit.the appeal therefore does not confront the two grounds on which the commissioner has come to his conclusion. entry 37 of the notification exempts goods classifiable in heading 39.23 and heading 39.24 other than those made of polyurethane and insulated wire from duty if they had made goods falling under any of the headings of the 39.01, 39.50 on which excise duty or additional customs duties has been paid and "no.....

Full Judgment

1. Abbot Laboratories, the respondent to this appeal was engaged in the manufacture of medicaments. Some of the medicaments that it manufactured was packed in plastic bottles which were manufactured and supplied to it by Interpack Containers. The manufacturer of the bottles took credit of the duty paid on plastic raw materials required for their manufacture from utilising towards payment of duty on the bottles. Abbot Laboratories in turn took credit of the duty paid by Interpack Containers on the bottles. Notice issued to Abbot Laboratories proposed to deny the credit taken by it on the ground that the plastic bottles were fully exempted from duty by virtue of entry 37 of the table to notification 14/92 and therefore Interpack Containers could not have availed of the modvat facility in respect of these bottles. Adjudicating on the notice, the Commissioner was of the view that the exemption contained in entry 37 of the table to notification gave a manufacturer an option to pay duty or not to pay duty. Further entry 38 provided for partial exemption to these goods. He therefore found nothing incorrect on payment of duty by Interpack Containers and therefore the taking of duty as credit by Abbot Laboratories. His order is appealed by the Commissioner.

2. We have heard the departmental representative. Respondent is absent and unrepresented despite notice.

3. The ground in the appeal is that the manufacture of goods which are exempted from duty by notification has no option to pay duty and if he choose to pay any duty, it is not in the nature of duty but deposit.

The appeal therefore does not confront the two grounds on which the Commissioner has come to his conclusion. Entry 37 of the notification exempts goods classifiable in heading 39.23 and heading 39.24 other than those made of polyurethane and insulated wire from duty if they had made goods falling under any of the headings of the 39.01, 39.50 on which excise duty or additional customs duties has been paid and "no duty of such duties is availed under Rule 57A of the said rules." The Commissioner has relied upon this condition to say that the exemption contained in the entry is not mandatory and it gives an option either to avail of the modvat credit procedure or not to do so and to avail of the exemption.

4. In the manner in which the entry is worded, we do not think his conclusion is incorrect. If the intention were only to exempt the goods unconditionally there would be no justification for incorporating in the condition subject to partial exemption as available which have been reproduced above. By accepting the department's ground these words would be redundant.

5. The other ground also appears is also sound. The entry of the notification exempts inter alia goods classifiable in heading 39.23 (in which plastic bottles or plastic fabric) from duty in excess of 30% ad valorem without there being any condition. There are two exemptions available for the product, one contained in entry 37 and the other contained in entry 38. In accordance with the settled law it was open to the Interpack Containers to avail either of these. It could therefore be said that it could be available in entry 38 and not entry 37. in either case, the payment of duty was not irregular or contrary to law.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Commissioner of Central Excise vs Abbot Laboratories Same Subject Excise Same Judge S T Gowri, K Kumar