2016 (9) TMI 130 - AT - Central Excise

Tribunal Upholds Order on Duty Payment for Job Worker Classification

The Tribunal upheld the impugned order, dismissing Revenue's appeal. The case involved classification of M/s Uniroyal Pharmaceuticals Ltd. as a job worker ... Whether the goods have been manufactured in the premises of M/s Uniroyal Pharmaceuticals Ltd. as job worker who has paid the duty at the time of clearance of the goods from the factory or not - Held that:- The issue has been examined by this Tribunal in the case of M/s Dolphine Laboratories vs. C.C.E., Ahmedabad – [2005 (3) TMI 222 - CESTAT, NEW DELHI] and Remidex Pharma Ltd. vs. C.C.E., Bangalore [2005 (7) TMI 249 - CESTAT, BANGALORE] wherein it has been held that loan licensee has supplied the raw materials to the job worker who manufacture the goods as per the specification of the loan licensee on getting processing charges, therefore, the manufacturer is the job worker who carries out entire manufacturing process in their factory. Therefore, the job worker is the manufacturer and required to pay duty at the value on which they have cleared the goods to loan licensee. It is also found that the said decision in the case of Remidex Pharma Ltd. (supra) has been affirmed by the Hon’ble Apex Court reported in [2006 (8) TMI 590 - SUPREME COURT]. As the issue has attained finality, therefore, we find no infirmity in the impugned order. - Decided against the Revenue Issues:1. Challenge to impugned order based on Tribunal's decision in Remidex Pharma Ltd. case.2. Classification of M/s Uniroyal Pharmaceuticals Ltd. as a job worker.3. Liability for duty payment on goods cleared to loan licensee.4. Application of previous Tribunal decisions and Apex Court rulings.Analysis:1. The appeal by Revenue against the impugned order was based on challenging the Tribunal's decision in the case of Remidex Pharma Ltd. The argument was that since the decision had been contested before the Hon'ble Apex Court, the impugned order should be set aside.2. The case involved M/s Uniroyal Pharmaceuticals Ltd., a small scale unit engaged in manufacturing P & P medicaments. They were availing benefits under Notification No. 8/2003. It was observed during an audit that products were being manufactured in their factory by other companies using the same premises and resources. The issue was whether M/s Uniroyal Pharmaceuticals Ltd. should be classified as a job worker based on previous Tribunal decisions.3. The Tribunal examined whether the goods were manufactured in M/s Uniroyal Pharmaceuticals Ltd.'s premises as a job worker, who had paid duty at the time of goods clearance. Previous decisions, including Remidex Pharma Ltd. case, established that the job worker is considered the manufacturer and is liable to pay duty on goods cleared to the loan licensee. The Tribunal upheld this position, citing the affirmation of the Remidex Pharma Ltd. case by the Hon'ble Apex Court.4. The Tribunal found that the issue had attained finality due to previous Tribunal decisions and the Apex Court's ruling. As a result, the impugned order was upheld, and the appeal by Revenue was dismissed. The decision was based on the established legal principles and precedents, ensuring consistency in the application of law.