2023-VIL-1111-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Rule 6(3) of Cenvat Credit Rules, 2004 - Manufacture of vaccine – non-maintenance of separate accounts - Dept alleged that the appellants manufactured and cleared duty free Hemophilus Vaccine and required to reverse 10% of the value of the exempted goods in terms of Rule 6(3) of CCR, 2004 – appellants submit that the vaccine in question was not manufactured by them but manufactured by separate legal entity located in the same factory compound - HELD – Ld. Commissioner has relied upon the fact that there are not records maintained by M/s Panheber and that the records maintained by the appellant do have the entries for the manufacture of the said vaccine but no verification has been caused to verify the claims of the appellant. The appellant’s submission, that the entries in the RG-1 were due to a mistaken notion by their clerical staff, was loud and clear - Drug manufacturing being closely monitored by various agencies and subject to various controls cannot happen in a secretive manner. It is on record that various authorities, national and international, have visited the facility where M/s Panheber have manufactured the vaccines. Under the circumstances, the claim of the appellants cannot be simply brushed aside saying that they might have contravened Drug Laws and that it was a flimsy stand taken by the appellants - the inevitable conclusion is that the Department having not negated the claims of the appellant that it was not the appellants who have manufactured impugned exempted product i.e the Hemophilus Flu Vaccine. Therefore, no case has been made by the Department to invoke the provisions of Rule 6(3) of the CCR, 2004 – further, Rule 6 does not provide any mechanism for recovery of the said “10% amount” and that the Department is free to invoke Rule 14 of CCR, 2004 to demand wrongly availed credit, if any. In the present case, though Rule 14 has been invoked, 10% of the value of exempted goods was sought to be demanded and not credit wrongly availed as such. Therefore, the issue stands decided in favour of the appellants on the alternate submissions also – the impugned order is set aside and appeal is allowed
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