TaxTMI 
TaxTMI 
2023 (11) TMI 675
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....dated 15.12.2004 renewed up to 14.12.2019 but for manufacture of drugs specified in Schedule C, C(1) and X excluding those of Schedule X to Drugs and Cosmetics Rules, 1945. Notification No. 01/2011-CE however exempts the excisable goods of the description specified in column (3) of the table of said notification from so much of duty of excise leviable thereon as in excess of the amount calculated at the rate of 2% ad valorem subject to such conditions as mentioned in the said notification, the appellant was found claiming benefit of Entry No. 37 of Notification 01/2011-CE. 2.1 The department observed that the said entry is with respect to Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic systems, whereas the appellant was manufacturing allopathic drugs which are not covered under First Schedule to the Drugs and Cosmetics Act. With these observations Show Cause Notice No. 133/2017 dated 03.05.2019 was served upon the appellant proposing denial of exemption of Notification No. 01/2011-CE dated 01.03.2011 to the appellant on the goods manufactured and cleared from the period 15.01.2015 to 30.06.2017. Central excise duty amounting to....
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.... ER-8 Returns, the appellant clearly mentioned about availment of exemption under the said notification. The department had full knowledge of the claim, hence the extended period should not have been invoked. The demand is liable to be set aside on this ground of limitation. 4.3 Finally it is submitted that in case the confirmation of demand is opined justified then the amount of freight as paid may be deducted from the confirmed amount of demand due to the reason that prices charged by the appellant from their buyers were FOR destination based prices. Also, once the benefit of notification is denied, the appellant will become entitled for the Cenvat credit as the same has not been availed on the inputs used as it was the condition of the said notification. With these submissions, learned counsel has prayed for setting aside of the order under challenge else at least for the modification as pleaded above. 5. Learned DR on the other hand has brought to our notice the scope of Entry no. 37 of Notification No. 01/2003-CE to impress upon that this entry extends benefit of concessional rate of duty to those goods which are falling under Ch....
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....meopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopoeia 38 30 Intravenous fluids, which are used for sugar, electrolyte or fluid replenishment 6.2 No doubt chapter 30 as mentioned in column (2) is about all pharmaceutical products whether allopathic or Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic systems accept under separate tariff entries. Learned counsel also has laid much emphasis on the word 'including' following word 'medicaments' in column (3) that word including mean that in addition to Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic system, the medicaments includes the allopathic medicaments also. We are of the opinion that interpretation of a word of expression must depend on the text and the context. The resort to the word "includes" by the legislature often shows the intention of the legislature that it wanted to give extensive and enlarged meaning to such expressions. Sometimes, however, the context may suggest that word "includes" may have been designed to me....
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....ely upon the decision in the matter of Commissioner of Sales Tax, Uttar Pradesh Vs. Modi Sugar Mills Pvt. Ltd. ,[ AIR 1961 SC 1047] applying above discussed principles of interpretation and the meaning/purpose of word "include". When we read column (3) of the impugned notification (Entry No. 37), we observe that it talks about the medicaments manufactured exclusively in accordance with the formulae described in the authoritative books specified in the First Schedule to the Drugs and Cosmetic Act, 1940 or Homeopathic Pharmacopoeia of India or the United States of America or the United Kingdom or the German Homeopathic Pharmacopoeia, as the case may be, and sold under the name as specified in such books or pharmacopeia. The First Schedule of Drugs Act talks about Books of Ayurveda and Siddha systems. It also talks about 14 books of Unani. Perusal of said column (3) in the light of this Schedule and the meaning of word "include" as discussed above, we are of the opinion that the language of the notification is clearly reflects the intention of legislature that the meaning of medicaments is enlarged to include those used in Ayurveda, Unani, Siddha and even....
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....levied are reproduced below: SECTION 11A. Recovery of duties not levied or not paid or shortlevied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii) duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under ....
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....t the appellant had full knowledge of the fact that it was not eligible for the exemption notification and yet cleared the goods claiming its benefit. c) therefore, the appellant appears to have wilfully contravened Rule 4, 6, 8 and 12 of the Central Excise Rules, 2002 with an intent to evade payment of duty. d) In an era of self assessment and self removal, the assessee is required to assess their duty liability correctly and is required to correctly discharge the same in the prescribed manner and the appellant deliberately wrongly availed the benefit of an ineligible exemption notification; e) Therefore, extended period of limitation under 11A (4) can be invoked because the appellant wilfully mis-stated as well as contravened the provisions of the Act and Rules with intent to evade payment of duty. 7.6 The reasons given in the impugned order for invoking extended period of limitation are as follows: a) The appellant was in the business of manufacture of medicaments and was fully aware that the drugs which it manufactured were not manufactured as per the formulae given in any of the books listed in the Firs....
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....r recommendation of units for detailed scrutiny and to carry out detailed scrutiny as per guidelines/instructions contained in Return Scrutiny Manual. 7.9 The Central Excise Manual published by CBEC on 17th May 2005 which is available on the website of CBEC devotes Part VI to SCRUTINY OF ASSESSMENT. Paragraphs 2.2,2.3 and 2.4 of this Part are reproduced below: 2.2 The Superintendent of Central Excise in-charge of the Range Office, with assistance of the Inspectors in-charge of the factory of an assessee, will scrutinize all the returns. They shall in selected cases, call all connecting documents including invoices and the records and scrutinize the correctness of assessment. 2.3. The Deputy/Assistant Commissioner of Central Excise will scrutinize the returns of the units, which pay duty exceeding rupees one crore but less than Rs. 5 crores from PLA per annum every six months. They shall requisition all connected documents including invoices and the records and scruntinse the correctness of assessment. 2.4 The Additional/Joint Commissioner of Central Excise will scrutinize the returns of the units which pay duty of Rs. 5 crores or more from ....
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....ry clearly the names of the allopathic medicines which it was manufacturing and also indicated that they were Schedule H drugs meant to be sold only on prescription and therefore, asserts thatit had full knowledge that it was not eligible for the exemption under the notification which shows that the appellant had wilfully mis-stated. Evidently, the appellant had NOT mis-stated any facts but only claimed the benefit of an ineligible exemption notification while self-assessing duty. Claiming the benefit of an exemption notification cannot, by any stretch of imagination, be called mis-statement, let alone, wilful mis-statement. 7.14 The SCN also alleged that the appellant had violated Rules 4,6,8 and 12 of the Central Excise Rules, 2002 with an intent to evade payment of duty. 7.15 As per Rule 4,every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured, or from a warehouse, un....
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....also in the ER 8 Returns filed by the appellant. The irresistible conclusion is that the officer had not either scrutinised the returns or having scrutinised, did not issue the demand within time. 7.23 The appellant was only required to self-assess duty and file returns which it did. It had also declared to the department that it had availed the benefit of the exemption notification. There was not even an obligation on the appellant to seek any clarification from the department. In a recent decision of the Delhi High Court in Mahanagar Telephone Nigam Ltd. versus Union of India and others [W.P. (C) 7542 of 2018 decided on 06.04.2023] the Delhi High Court observed as follows: 32. As noted above, the impugned show cause notice discloses that the respondents had faulted MTNL for not approaching the service tax authorities for clarification. The respondents have surmised that this would have been the normal course for any person acting with common prudence. However, it is apparent from the statements of various employees of MTNL that MTNL did not believe that the amount of compensation was chargeable to service tax and therefore, there was no requirement f....