CEA No.87 of 2005 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Date of Decision:18.03.2010 Commissioner of Central Excise Commissionerate, Chandigarh ....Appellant Versus M/s Ranbaxy Labs Ltd. ...Respondent CORAM:- HON'BLE MR. JUSTICE ASHUTOSH MOHUNTA. HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR. Present: Mr.Gurpreet Singh, Sr.Standing counsel, for the petitioner. Mr.MP Devnath, Advocate for the respondent. ASHUTOSH MOHUNTA, J. (ORAL) The revenue has impugned the order dated 26.7.2004 passed by the Customs, Excise & Service Tax Appellate Tribunal, whereby the appeal filed by the revenue was dismissed and it was held that the re- processing of the defective goods does not amount to manufacture. The short question of law that arises for determination in this appeal is whether the Tribunal is correct in allowing the credit in the facts of this case when the fresh goods were received without payment of duty in the guise of reprocessed goods. Briefly stated, the facts of this case are that the respondents M/s Ranbaxy Labs are engaged in manufacture of Bulk Drugs falling under Chapter 29, PP Medicaments falling under Chapter 30 and Enzymes (Pencillin-G Acylase) falling under Chapter 35 of the Schedule to the Central Excise Tariff Act, 1985. M/s Ranbaxy Labs manufactured Bulk Drugs of Pencillin from their unit situated in Ponta Sahib and sent the same after payment of duty to their Mohali Unit and in Mohali Unit, it transpired that manufacture was defective and the same was sent back to Ponta Sahib unit. After re-processing and re-manufacturing of the defective goods, the same were sent back to Mohali Unit and thereafter sold. The department claimed that the manufacturer is liable to pay CEA No.87 of 2005 2 the duty on the re-processing of manufactured bulk drugs by the respondent. The demand was confirmed against the assessee by the Assessing Authority, which was also confirmed by the Commissioner (Appeals). However, the Appellate Tribunal has set aside the demand on the ground that the goods, which were re-processed, does not amount to manufacture. Learned counsel for the revenue contends that as the goods have been manufactured afresh, therefore, the respondents are liable to pay the duty, whereas on the other hand, learned counsel for the assessee submits that as the duty has already been paid on the goods, which were manufactured earlier and the same were not sold and sent back being defective in nature, therefore, no fresh duty is liable to pay by the assessee. Learned counsel for the assessee has placed reliance on Commissioner of Central Excise, Delhi-III, Gurgaon vs. M/s Maruti Udyog Ltd. Palam Gurgaon Road, Gurgaon. 2010-TIOL-145-HC-P&H-CX, wherein a Division Bench of this Court has held that “no duty can be demanded in respect of repaired vehicles that were exported as also internally damaged vehicles that were cleared on payment of duty under Rules 173H and 173L of Central Excise Rules”. In view of the above, this case is squarely covered by M/s Maruti Udyog Ltd. Palam Gurgaon Road, Gurgaon's case (supra). The question posed by this Court is accordingly answered in favour of the assessee and against the revenue. The appeal filed by the revenue is hereby dismissed. (ASHUTOSH MOHUNTA) JUDGE March 18, 2010 (MEHINDER SINGH SULLAR) AS JUDGE