Full Judgment
Lupin Laboratories, Mandideep in the absence of any definition/decision. High Court is the competent authority to decide the issue which has got a bearing on the decision of the case and involves central excise revenue to the extent of Rs. 79,38,597.50.
3. It is admitted that the respondent made correspondence with the department but they also cannot absolve themselves of the responsibility of the compliance of Rule 57F(2) and other procedure which resulted in wrong availment of MODVAT credit. The case fully deserves that a demand of a period of 6 months (as provided under Section 11A of Central Excises and Salt Act, 1944) for breach of law as contained in the show cause notice be confirmed.
4. Whether the mandatory requirement can be bracketed with the category of 'Lapse under technical nature'. It is a fit case where High Court can decide now for a lapse under technical nature can be judged.
2. Shri V.C. Bhartiya, learned DR submits that the statutory requirement of declaration of 7 ADCA as a fully manufactured intermediate product not having been complied with by the respondents, the question as to whether the statutory requirement under Rule 57G has been substantially satisfied, is a question of law requiring reference.
He further submits that the question as to whether the Ankleshwar factory of the respondents can be considered as a job worker of the Mandideep factory in the face of the admitted position that no job work charges were paid, is also a question of law for reference. The further question is as to whether the extended period of limitation has been rightl applied by the Department.
3. Shri C.S. Lodha, learned Counsel draws our attention to paragraph 15 of the order of the Tribunal recording that the entire raw materials were used in the manufacture of 7 ADCA which in turn was used entirely in the manufac ture of final dutiable products and submits that there is no dispute that 7 ADCA has been rightly declared as an input in the manufacture of the fina| product i.e. Cephalexin and, therefore, the question of declaring it once over as a final product does not arise as, so far as the respondents are concerned, 7 ADCA is an input for the final product. He further submits that the respon-dents had followed the procedure prescribed in Rule 57F2 and the question of payment of job work charges to the respondents own factory situated at another place does not arise. He submits that no question of law arises out off the order of the Tribunal.
4. On hearing both sides and carefully considering their submissions! we are of following view : Having held that 7 ADCA has been rightly declared as an input for the manufacture of final product and that the position remains unaltered even if the intermediate product is a finished product by itself as long as it is used in the manufacture of the final product, no question of law arises on this issue.
This is a question of fact and the Tribunal has evaluated the entire evidence before it to hold that the Ankleshwar unit was a job worker of the Mandideep unit and a question of fact is not a question to be referred to the High Court.
This is again a question of fact dependent upon the other two questions and as we have already held that the questions No. 1 and 2 do not require reference, the same finding holds good for this question also.
Since it is a well settled legal position that technical or minor infractions of a procedural nature cannot stand in the way of substantive benefit if otherwise due, no question arises for reference as a settled legal issue cannot form the subject matter for reference. In the case of Collector of Central Excise v. UP State Sugar Corporation Ltd. reported in 1987 (29) ELT 475, the Tribunal has held that the question whether procedural breach committed is substantive or technical is a question of fact not referable to the High Court. Further, the Department cannot seek review of the order in the guise of a reference application.
5. Accordingly, we reject the reference application as already announced in open court.