TaxTMI 
TaxTMI 
2005 (7) TMI 395
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....led by both sides. 2. The relevant portion of the Apex Court Order remanding the case back to the Tribunal is reproduced below :- "From the various affidavits, which are on record, it appears that during manufacture of Ethambutol Hydrochloride I.P. the two substances DL-2 Aminbutanol and Tartaric Acid have to be mixed together. As stated above two intermediate products came into existence one of which is L-2 ABT. As per the affidavits, in layman's language, L-2 ABT is nothing else but contaminated Tartaric Acid. As per the affidavits, it is unusable without a process of recovery. Thus, as per the affidavits, there is only recovery of the Tartaric Acid which was the original imported product. If this be the position then Tartaric Acid is merely being recovered for further use then there is no manufacture........................................................ ....................., learned Attorney General has invited our attention to two statements made by Directors of the 1st respondent which shows that apart from recovery of Tartaric Acid (for and on behalf of Respondent Nos. 3 and 5) the 1st respondent is also selling Tartaric Acid, recovered from L-2 ABT, on it....
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....nbsp; M/s. Yash Pharma is manufacturing tartaric acid which is used by M/s. Themis and Lupin and intermediate product L-2 ABT so obtained is again sent to M/s. Yash Pharma for manufacturing tartaric acid. Tartaric acid so obtained cannot be considered as if imported. It is required to be ascertained how much quantity of tartaric acid was obtained which was not imported. For this purpose also the case should be remanded to adjudicating authority. (4) Facility under Rule 57F(2) was not available to M/s. Themis and M/s. Lupin. No Modvat credit was taken of duty paid on tartaric acid as CVD and nor it was admissible to them as the final products were exempt from duty. In fact, no Modvat credit was taken on tartaric acid imported by them. As per Rule 57F(2), inputs or partially processed inputs could be removed without payment of duty for manufacture of intermediate products to be used in final products. As no credit of duty was taken, they were not entitled to follow Rule 57F(2). This procedure has been followed merely to evade duty on tartaric acid manufactured by M/s. Yash Pharma, and therefore this is a clear case of suppression of facts,....
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....ne person to another in the ordinary course of business, the transaction of job work should be treated as sale and the judgment of the Hon'ble Supreme Court should be interpreted accordingly. (4) Two aspects were pointed out before this Hon'ble Bench. Firstly, it was submitted that the said reading by the learned JCDR conveniently omitted the later part of the definition which read : "for cash or deferred payment or other valuable consideration." (5) Secondly, it was submitted that if this interpretation is accepted, it would render the judgment of the Hon'ble Supreme Court nugatory inasmuch as it would equate the sale with job work though the Hon'ble Supreme Court distinguished between sale and job work and directed the Tribunal to levy excise duty on sale and not on job work. (6) It is submitted that the Annexure "B" and "C" to the Notice to show cause seeks to demand duty on the Tartaric Acid manufactured from L-2 ABT supplied by Themis and Lupin respectively and Annexure "D" specifically says "Manufacture on their own behalf claiming SSI exemption under Notification No. 175 of 1986, dated 1-3-1986. Annexure "B", "C" and "D" makes very clear that the t....
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....r Yash Pharma was doing only the job work and recovering on behalf of Themis and Lupin or transactions between them are that of sale. (14) The Notice to show cause makes clear distinction between job work and sale by making three distinct and different demands. The duty demand on sale of Tartaric Acid is only for those clearance mentioned in Annexure "D" on which Yash Pharma claimed benefit of exemption Notification No. 176/86 and therefore, no duty was payable. (15) It is submitted that Yash Pharma is entitled to benefit of Notification No. 175 of 1986 for sale of Tartaric Acid sold on its own account (demand made in Annexure "D" to notice to show cause). The clearances mentioned in Annexure "D" are transaction of sale of Tartaric Acid out of L-2 ABT supplied by Themis and/or Lupin. These clearances are exempt under Notification No. 175 of 1986 and therefore no duty is payable thereon. (16) Without prejudice to the submission that findings recorded by the then Collector of Central Excise in the impugned order is correct and proper, the benefit of Notification No. 175 of 1986 cannot be denied in view of the following submissions. (17) The benefit of ....
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.... to this Hon'ble Appellate Tribunal by the Hon'ble Supreme Court of India, this Hon'ble Tribunal it order in the case of L.D. Industries v. Commissioner of Central Excise, Pune, the Hon'ble Appellate Tribunal in its Order dated 29-8-2003 reported in 2003 (157) E.L.T. 459 (Annexure "J") in paragraph 3 held that - "......... The above portion would show that the limited companies whether public or private are to be treated as separate entities distinct from shareholders and that each such limited company which is a manufacturer will be entitled to separate exemption limit. By applying the above provisions the production of M/s. Supreme Washers (P) Ltd. has to be considered separately for the purpose of exemption limit. We clarify the above position and dispose of the appeals. We, therefore, hold that the production of Supreme Washers (P) Ltd. cannot be clubbed with the production of LD Industries and LR Industries for the purpose of assessment." (22) The combined reading of the judgment of the Hon'ble Supreme Court of India and the Order of this Hon'ble Appellate Tribunal referred above, makes it very clear that Yash Pharma and Yash Pharma Laboratories Private Limited bein....
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.... sale. (2) Whether the first respondent was only doing job work on behalf of the respondents Nos. 3 & 5 and/or whether there were transactions of sale between these parties. According to the Apex Court order if the first respondent was only doing job work and recovering Tartaric Acid on behalf of respondents Nos. 3 & 5 then there would be no manufacture. But if there is transaction of sale between these persons and anybody else, then duty would be payable in respect of those transactions. (3) Whether extended period of limitation would be available to the Department. 6. It is clear from the Apex Court's directions that the Tribunal has to come to a finding whether the recovery of Tartaric acid from L-2 ABT has been done on job work basis or there are transactions of sale between Lupin and Themis on the one hand and Yash Pharma on the other, and secondly whether Yash Pharma has sold Tartaric acid on its own account. Normally for determining dutiability of goods under the excise law, the criteria for satisfaction of the test of manufacture as laid down under various earlier decisions of the Apex Court provide a guidance. H....