Tribunal upholds Commissioner's decision on pharmaceutical production start date, dismissing appeal and rejecting duty demand.

The Tribunal affirmed the Commissioner's decision that the manufacturer of pharmaceutical products commenced commercial production on 12.06.2006, based on documentary evidence including the Entrepreneur's Memorandum-2. Despite the Department's argument relying on Master Formula Record and Batch Manufacturing Record indicating an earlier date, the Tribunal found the appellant's evidence more credible. The appeal was dismissed, upholding the Commissioner's ruling and rejecting the duty demand.

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Issues:
1. Determination of the date of 'commencement of commercial production' for the purpose of claiming exemption from central excise duty.

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi involved a dispute regarding the date of 'commencement of commercial production' for a manufacturer of pharmaceutical products seeking exemption from central excise duty. The respondent claimed that commercial production began on 12.06.2006, while the Department contended it started on 01.06.2006. The jurisdictional range superintendent initially believed the production commenced on 01.06.2006, leading to a disagreement on the expiry date of the exemption period.

The Commissioner (Appeals) set aside the order confirming the duty demand, emphasizing the lack of conclusive evidence supporting the Department's claim. The appellant provided documentary evidence, including the Entrepreneur's Memorandum-2 (EM-2) acknowledgment from the District Industries Centre, indicating the commencement date as 12.06.2006. The Commissioner found the appellant's contention supported by credible evidence, rendering the duty demand unsustainable.

During the appeal, the Department argued that the Master Formula Record (MFR) and Batch Manufacturing Record (BMR) indicated a start date of 01.06.2006, contradicting the respondent's claims. However, the Commissioner upheld the respondent's position based on the documentary evidence, including the date of ingredient receipt and the first batch production date.

The Tribunal affirmed the Commissioner's decision, noting that the first batch of medicines was manufactured on 12.06.2006, supported by the Batch Packing Record (BPR) and Quality Assurance Department approval. The Tribunal rejected the Department's argument, stating that both MFR and BMR dates were part of the standard operating procedure, and the actual production commencement date was correctly determined as 12.06.2006. Consequently, the appeal was dismissed, upholding the findings of the Commissioner (Appeals).

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