TaxTMI 
TaxTMI 
2017 (8) TMI 986
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts which were admittedly not fit for human consumption as being expired and which were destroyed in presence of Food and Drugs Administrative Authority and consequently demanding duty on the destroyed goods from the appellant? (B) Whether in the facts and circumstances of the case, the learned Tribunal was justified in denying the benefit of substantive right of remission of duty when the appellant's application of remission of duty remained undecided by the respondent even after prescribed period provided under Supplementary manual issued by C.B.E. & C.? (C) Whether the learned Tribunal was right in discarding the decisions of co-ordinate Bench where the benefit of remission of duty was granted on identical facts? (D) Whether the learned Tribunal was right in holding that the appellant has not given any specific intimation to the department with respect to proposed destruction of the finished goods? (E) Whether the learned Tribunal was right in ignoring the certificate dated 17-1-2016 issued by the Assistant Commissioner of Food and Drugs Control Administration, Valsad? 3. The facts leading to the present appeals in a nutshell are as under :....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Drugs Control Administration, Valsad also issued certificate dated 17-1-2006 certifying the fact that the expired drugs as per the list, which are not to be used for human consumption, are destroyed on 11-1-2006 in presence of their officer. Thereafter, the appellant vide letter dated 13-1-2006 submitted Xerox copies of RG-1 Register as directed vide letter dated 19-12-2005 by the Superintendent of Central Excise, Vapi and requested to grant permission to remove the goods from bonded store room for destruction. At this stage, it is required to be noted that as such prior thereto and without any approval by the competent appropriate authority, the appellant already destroyed the drugs on 11-1-2006. 3.2 Since the goods were destroyed without permission as required under the provisions of the FDA and FDR, the appellant was served with the show cause notice by which the appellant was called upon to show cause as to why the Central Excise duty amounting to Rs. 21,96,517/- (Tax Appeal No. 610/2016) should not be recovered under Section 11A(1) of the Central Excise Act, 1944 (hereinafter referred to as "the Act") along with interest under Section 11AB of the Act and as to why pena....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant preferred appeal before the learned Tribunal. The said appeal has been dismissed by the learned Tribunal by the impugned judgment and order. Hence, the appellant has preferred Tax Appeal No. 610/2016. Similar order came to be passed by the Commissioner (Appeals), which was subject matter of appeal before the learned Tribunal, being E/10447/2013, which is subject matter of Tax Appeal No. 611/2016. 4. Shri Hardik Modh, learned advocate has appeared on behalf of the common appellant and Shri Ankit Shah, learned advocate appeared on behalf of the Department. 4.1 Shri Hardik Modh, learned advocate appearing on behalf of appellant has vehemently submitted that in the facts and circumstances of the case the learned Tribunal has materially erred in confirming the demand of tax, interest and penalty. It is submitted that the learned Tribunal ought to have appreciated that the appellant complied with the conditions provided under Rule 21 of the Central Excise Rules, 2002, which permits remission of duty on finished goods lost or destroyed by natural causes or the same are unfit for consumption. It is submitted that it is an undisputed fact that the P.P. Medicaments were ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Commissioner of Central Excise, Customs & Service Tax, Vapi v. Sun Pharmaceutical Industries Ltd. reported in 2015 (322) E.L.T. 311 (Bom.) 3. Sun Pharmaceutical Industries Ltd. v. Commissioner of Central Excise, Vapi reported in 2013 (297) E.L.T. 540 (Tri.-Ahmd.) 4. Godrej Food Ltd. v. Union of India reported in 1995 (75) E.L.T. 777 (M.P.) 5. Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner reported in 1991 (55) E.L.T. 437 (S.C.) 6. Century Spinning and Manufacturing Company Ltd. v. Union of India reported in 1981 (8) E.L.T. 676 (Bom.) 7. Universal Dairy Products (P) Ltd. v. Commissioner of Central Excise, Kanpur reported in 2013 (295) E.L.T. 103 (Tri.-Del.). 5. Both these appeals are vehemently opposed by Shri Ankit Shah, learned advocate appearing on behalf of the Department/Revenue. It is vehemently submitted that in the present case the appellant destroyed the goods/drugs in absence of any permission from the appropriate authority and without following procedure as required under Chapter 18....
X X X X Extracts X X X X
X X X X Extracts X X X X
....substantive in nature is required to be followed as provided under Chapter 18 of the C.B.E. & C.'s Central Excise Manual. As per Chapter 18 of the C.B.E. & C.'s Central Excise Manual in case any amount exceeds Rs. 5000/- and the appropriate authority/Commissioner is satisfied that the goods have been lost or destroyed by natural cause and/or by unavoidable accident or is claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods as to the extent specified in the corresponding entry, however subject to the conditions as may be imposed by him by order in writing in the table provided in Chapter 18 of the C.B.E. & C.'s Central Excise Manual the competence to supervise destruction of excisable goods claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal has also been specified in Column 4 of the said table. It is also specifically provided that destruction shall be carried on only after the competent officer has passed the order for remission. The detailed procedure as provided while considering the application for granting permission to destroy the goods/drugs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....manner specified in the Basic Excise Manual as modified by the instructions issued, if any, by the Board in this regard. (vi) Ordinarily the views of the assessees that the goods are rendered unfit for consumption or marketing, should be accepted and necessary permission should be granted within a period of 21 days or earlier, if possible. Where samples are drawn, such permission should be granted within 45 days. (vii) Actual destruction of goods should be supervised by the officers according to the monetary limits specified in column (4) of the Table in para 1.2 above. The date and time for destruction should be fixed by mutual convenience of the proper officer and the assessee and it should be ensured that the same date and time are not fixed for more than one assessee. It should also be ensured that there is no inordinate delay once permission for destruction and remission is granted. (viii) In case of frequent requests for destruction of goods by an assessee, necessary enquiries into the cause thereof should be conducted before according permission for destruction of goods. (ix) The proper officer personally supe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....54) E.L.T. 543 (T-Mumbai)] (C.B.E. & C. Circular No. 800/33/2004-CX, dated 1-10-2004). 2.5 Where inputs have been destroyed as such, proportionate credit of duty paid on such inputs should be reversed as the goods have not been put to use in manufacture of excisable goods. 2.6 There will be no limit on the executive powers of the Commissioners to order remission of duty in such cases. However, it has been decided that as a measure of administrative control and information, where the duty amount exceeds Rs. 5 lakhs in a case, the Commissioners will send a report to the Board (in CX-9 Section) giving sufficient details of such cases. 2.7 No remission of duty in case of theft should be allowed, since the goods are available for consumption somewhere else." 6.1 It is an admitted position that in the present case the aforesaid procedure has not been followed by the appellant and without any approval/permission from the appropriate authority, drugs have been destroyed and that too not in presence of any of the Officers of the appropriate authority. It is the case on behalf of the appellant that as the goods/drugs were destroyed in the presence of the Food ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore, non-observance of the same is not condonable and is likely to facilitate the commission of fraud and administrative inconvenience. Under the circumstances and in the facts and circumstances of the case, none of the decisions, which are relied upon by the learned advocate appearing on behalf of the appellant, referred to hereinabove shall be applicable to the facts of the case on hand. 6.3 In the case of Sun Pharmaceuticals Indus. Ltd. v. Commissioner of Central Excise & Customs reported in 2009 (235) E.L.T. 676 (Tri.-Ahmd.) the assessee applied for destruction in the year 1999 and no permission was granted even by September, 2001 and thereafter when the goods were destroyed without prior permission, on facts, the learned Tribunal held that the appellant shall be entitled to remission of duty on such destroyed goods as the appellant cannot be held liable for delay on Revenue's action. Such are not the facts in the present case. 6.4 In the case before the Bombay High Court in the case of Commissioner of Excise, Customs & Service Tax, Vapi v. Sun Pharmaceutical Industries Ltd. reported in 2015 (322) E.L.T. 311 (Bom.) on facts it was found that the goods was dest....