TMI Blog1993 (4) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... ned order of the Collector of Central Excise, Patna on the ground that there had been short debit of modvat credit originally taken by them on inputs received by them which had subsequently been utilised by them in the manufacture of exempted final product. Shri Bagaria pointed out that the legal position in this regard being specific in terms of Rule 57C of the Central Excise Rules, the method followed by the Collector in quantifying the amount of duty and invoking the extended period on the ground that they had failed to declare the description of dutiable and exempted final product in their declaration under Rule 57G cannot stand. He explained that they manufacture a number of varieties of footwear and the inputs, duty in respect of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nued to adopt the same method of arriving at the percentage of inputs used for exempted final products for each month and worked out the amount to be debited from the Modvat Credit. The particulars were furnished by them in the enclosures submitted along with the monthly RT 12 returns which were accepted by the department. Thereafter, vide show cause notice dated 8-1-1992, duty was sought to be demanded for the entire period from 1-3-1987. There was no suppression or misstatement on their part to justify the period beyond six months. The Collector, while confirming the demand, has arrived at the percentage of inputs used for exempted final products vis-a-vis total final products on the basis of number of pairs as against the earlier criteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted final products. 4. We have considered the submissions. The arguments raised by Shri Bagaria regarding the untenable nature of the order imposing penalty and demanding duty for the longer period alleging failure on their part to declare the description of dutiable and exempted final-products in their Rule 57G declaration are eminently acceptable. It is not clear as to what their failure was by way of non-declaration of the description of dutiable and exempted final products in their declaration under Rule 57G. The pattern and break-up of manufacture of final products of exempted variety and dutiable variety is not a constant or fixed formula and varies from month to month. In fairness to the appellants, it should be stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al products, we find that it will not be feasible for us to lay down the appropriate method in this regard. The Collector has, in his impugned order, directed them to keep the stock of inputs to be used in the manufacture of exempted goods separately and maintain separate accounts for the same. It was submitted by Shri Bagaria, learned Counsel, that this is simply impossible and they cannot fall in line with this direction because of the large number of varieties, sizes etc. involved. At the time of taking out the inputs for the manufacturing operation and the preparation of the intermediate products, the actual requirements for the different final products would not be exactly known. The alternative suggested by the Collector is what is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts at all which may be used in the cheaper varieties or vice versa, but this problem can be looked into with proper data being made available by the appellants. Since they are taking advantage of modvat credit and as they have to conform to the statutory requirements including the provisions of Rule 57C, they have to make available sufficient data to the authorities to the extent practicable as the same will be in their own interest rather than leave the matter to the vagaries of percentage based on value, as originally adopted by the department or on number of pairs as subsequently held by the Collector in his own adjudication order. We feel, however, that if certain inputs are generally used in the manufacture of all the varieties and siz ..... X X X X Extracts X X X X X X X X Extracts X X X X
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