2003 (10) TMI 436 - AT - Central Excise

Tribunal: Intermediate products not liable to duty separate from final product classification. Extended limitation period not applicable.

ZANDU PHARMACEUTICALS Versus COMMISSIONER OF CENTRAL EXCISE, SURAT

ZANDU PHARMACEUTICALS Versus COMMISSIONER OF CENTRAL EXCISE, SURAT - 2004 (163) E.L.T. 382 (Tri. - Mumbai) Issues:1. Whether intermediate products arising during the manufacture of P.P. Ayurvedic medicaments are liable to duty under a different classification than the final product.2. Whether the extended period of limitation can be applied in the case of alleged suppression of facts by the appellants.Analysis:1. The appellants were manufacturing P.P. Ayurvedic medicaments and were availing exemption from Central Excise duty under specific notifications. However, during manufacturing, intermediate products like Ghan, Quatha, and Kashay, classified under a different chapter, were also produced. The department contended that these intermediates should be taxed under a different classification than the final product due to their nature. A demand was raised on the intermediates, leading to this appeal.2. The appellants provided declarations detailing the manufacturing process of their final product, which was verified and accepted by the Range officer. The process involved various dosage forms, including Ghan as an intermediate product. The appellants argued that since they disclosed the production of Ghan during the manufacturing process, there was no deliberate suppression of facts or misstatement. Therefore, they contended that the extended period of limitation should not apply. The Tribunal agreed, holding that the demand and penalty were barred by limitation, as the appellants had not willfully suppressed any information. The appeal was allowed based on this finding without delving into the merits of the case.