Panacea Biotec Ltd. Vs Commissioner of Central Excise And Service Tax (CESTAT Chandigarh)
Introduction: In a recent order, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh ruled in favor of M/s Panacea Biotec Ltd., setting aside the excise duty demand of Rs. 1,65,92,802/- imposed on the clearance of Hemophilus Vaccine. The crucial ground for quashing the demand was the absence of concrete evidence establishing M/s Panacea Biotec Ltd. as the actual manufacturer of the vaccine.
Background: M/s Panacea Biotec Ltd., engaged in the production of PP Medicaments, had availed CENVAT credit on inputs, input services, and capital goods, clearing final products by paying the required duty. A CAG Audit raised concerns about the duty-free clearance of Hemophilus Vaccine, leading to a show-cause notice in 2012. Despite an initial confirmation of the demand in 2013, CESTAT, in 2015, remanded the case for re-evaluation. Subsequent proceedings in 2017 upheld the demand, prompting the appellants to file appeals.
Key Arguments and Findings:
Rule 6(3) of CCR, 2004 Challenge:
- The appellants contested the legal sustainability of the demand under Rule 6(3) of CCR, 2004. They cited the precedent of Tiara Advertising, emphasizing that the rule provides options to service providers, and authorities cannot enforce these options on behalf of the service provider.
- The Tribunal noted that the issue had been settled in favor of the appellants in various cases, including M/s SPAC Taopica Products (India) Ltd. and M/s Nava Bharat Ventures Ltd.
Manufacturer Identity Dispute:
