TMI Blog2013 (3) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, thus unable to find any similarity on the facts of that case with the present one. Likewise, the other decisions relied show that they are distinguishable on facts and the decision of the Apex Court in the case of Ballarpur Industries Ltd., was not placed before the Court. At any event, relied on the subsequent decision in Commissioner of Central Excise, Nagpur Vs. Ballarpur Industries Ltd.(2007 (8) TMI 10 - SUPREME COURT OF INDIA) wherein held that on even on stock transfer, Modvat is required to be reversed - allow the appeal filed by the Revenue by answering the questions of law in favour of the Revenue and against the assessee. Consequently the connected C.M.P. is closed. No costs. - C.M.A. No.2944 of 2005 and C.M.P.No. 15346 of 2005 - - - Dated:- 6-3-2013 - R. Banumathi And K. Ravichandra Baabu,JJ. For Appellant : Mr.E.Vijay Anand, SCGSC For Respondents : Mr.Muthu Venktaraman (R1) JUDGMENT The Revenue is on appeal as against the order passed by the CESTAT by raising the following substantial questions of law:- 1. Whether the Tribunal is correct in holding that the final product is castings and not PD pumps when castings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 998 by specifically contending that the assessee was not maintaining separate inventory and accounts as required under Rule 57CC (9). A reply was filed by the assessee. 3. The adjudicating authority dropped further proceedings initiated on the ground that the duty reversal was correctly done by the assessee on the value of the CI castings. The said order of the original authority was found to be incorrect by the Commissioner of Central Excise, Coimbatore and consequently by invoking the power under Section 35E(2) of the Central Excise Act 1944, he directed for filing an appeal against the said order. Accordingly, the Revenue filed an appeal before the first appellate authority. The first appellate authority, after considering the rival contentions, found that the assessee failed to discharge the liability in the manner in which it is contemplated under sub-rule (1) of Rule 57CC. The first appellate authority also found that the assessee did not maintain separate account of inputs. He further pointed out that the input credit was denied not because of their use in the captively consumed and exempted CI castings but because of their use in the various exempted pumps. He also found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products and not the PD pumps and therefore, the demand of duty at the rate of 8% on the sale price of the exempted final product viz, pumps cannot be demanded. In support of his submission, he relied on a larger Bench decision of Delhi Tribunal in the case of Texmo Industries Vs. Commissioner of Central Excise, Coimbatore ( 2007) (208) E.L.T 338 . 7. Heard the learned counsels appearing for either side. 8. The point for consideration in this appeal is as to whether the assessee is liable to pay 8% on the price of the exempted final products viz., PD Pumps cleared from factory or 8% on the price of CI casting which was captively consumed by the assessee for the manufacture of those exempted goods viz., PD pumps. 9. It is an admitted case of the assessee that they are manufacturers of CI castings along with machineries, electric motors, centrifugal pumps etc., and were availing MODVAT credit on various inputs used in the manufacture of the above goods except the exempted goods. Rule 57CC (9) of the Central Excise Rules 1944, contemplates that the manufacturer shall maintain separate inventory and accounts of the receipt and use of inputs which are used in or in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and materials placed before him. Such factual finding rendered by the first appellate authority was rejected by the Tribunal by holding that what was cleared is only CI castings and not PD pumps. A perusal of the order passed by the Tribunal would only show that the factual aspect of the matter was not gone into in detail. The Tribunal being the final fact finding authority, ought to have considered the entire facts and materials and the findings of the first appellate authority. There is absolutely no reason given by the Tribunal as to how it has come to the conclusion that the final product which is manufactured is only CI castings and not PD pumps, whereas the first appellate authority had given detailed reasonings for arriving at such conclusion based on the materials placed before it. We are in total agreement with the order passed by the first appellate authority supported by well considered reasonings. 12. At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2007 (8) SCC 89 ( Commissioner of Central Excise, Nagpur Vs. Ballarpur Industries Ltd.,). The Apex Court has considered a similar issue and held that 8% duty is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, has not called the said amount of eight per cent as duty of excise. As indicated in the above circular, quoted above, the manufacturer who did not maintain account or inventory was required to debit the amount equal to 8 per cent of the value of exempted goods at the time of removal of goods from the factory. In our view, the said amount of 8 per cent of the value of the goods at the time of clearance is the measure and it brings in also the applicability of Section 4 of the 1944 Act and the Valuation Rules, 1975 framed thereunder." Thus from the reading of the above decision of the Apex Court, we find no difficulty in applying the same to the present case and to reject the case of the assessee. 13. The learned counsel for the assessee relied on a larger Bench decision of the Tribunal in the case of Texmo Industries Vs. Commissioner of Central Excise, Coimbatore ( 2007) (208) E.L.T 338. When the decision of Hon'ble Supreme Court cited supra is very much on the point and in support of our conclusion, the Tribunal decision relied on by the assessee may not have any persuasive value. 14. After we reserved judgment in this appeal, the learned counsel for the assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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