Case Law Details
Sun Pharmaceuticals Industries Ltd Vs C.C.E. & S.T (CESTAT Ahmedabad)
Introduction: The recent case of Sun Pharmaceuticals Industries Ltd Vs C.C.E. & S.T presented by CESTAT Ahmedabad delineated key issues surrounding customs duty, redemption fine, and penal actions. It highlights the significance of adhering to EXIM policy, the responsibility of manufacturers and job workers in using duty-free materials, and the potential implications for the pharmaceutical industry.
Analysis: In this case, Sun Pharmaceuticals Industries Ltd, a 100% EOU, allegedly violated the conditions of its permission letter by failing to verify the existence of its declared job worker, M/s. Heartwell Life Science. The job worker was also found to have misdeclared the manufacturing premises. The Commissioner adjudged that the raw materials imported duty-free were not used as intended and were likely misused or diverted domestically, thereby imposing duties, redemption fine, and penalties.
However, the CESTAT Ahmedabad ruled that such charges can only be confirmed if it’s demonstrated that the raw material sent to the job workers was not received back by the 100% EOU.
Since the impugned orders are silent on this aspect, CESTAT feel that matter need to be re-adjudicated keeping in mind above observations and accordingly, CESTAT allowed the appeals by way of remand to the Adjudicating Authority.
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