TMI Blog2010 (3) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... ble final products i.e. the tractors. The credit of duty is admissible on the inputs used by the manufacturer on the exempted and dutiable goods - decided against Revenue. - Central Excise Appeal No. 106 of 2006 - - - Dated:- 30-3-2010 - Ashutosh Mohunta and Mehinder Singh Sullar, JJ. Shri Kamal Sehgal, Senior Panel Counsel, for the Appellant. Shri M.P. Devnath, Advocate, for the Respondent. JUDGMENT [Judgment per : Mehinder Singh Sullar, J.]. - The matrix of the facts, culminating in the commencement of relevant for disposal of present appeal filed by the Revenue and emanating from the record is that the respondent-assessee M/s. Escorts Ltd. (for short the assessee ) was engaged in the manufacture of agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Aggrieved by the order Annexure A1, the assessee filed the appeal and the Commissioner (Appeals), vide order dated 14-3-2002 (Annexure A2), directed that the appeal shall be admitted on pre-deposit of ₹ 1 crore. The Appellate Authority dismissed the appeal on default of pre-deposit amount, vide order dated 27-5-2002 (Annexure A3). On appeal the Customs, Excise and Gold (Control) Tribunal remanded the case to the Commissioner (Appeals), vide order dated 17-10-2002 (Annexure A4) for deciding the matter afresh on merits. Thereafter the appeal filed by the assessee was also dismissed by the Commissioner (Appeals), vide order dated 30-4-2003 (Annexure A5). In the meantime the assessee applied for refund of the claim which was deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Rules therefore, the Modvat credit of duty is admissible to the inputs used in the final products by it (assessee). In this regard he has placed reliance on the judgments of Hon ble Supreme Court in cases Commissioner of Central Excise v. Life Long Appliances Ltd. - 2006 (196) E.L.T. A144 (S.C.) and Chandrapur Magnet Wires (P) Ltd. v. Collector of C. Excise, Nagpur - 1996 (81) E.L.T. 3 (S.C.) and circular dated 25-7-1996 issued by the Government of India Ministry of Finance (Department of Revenue), Central Board of Excise Customs, New Delhi and prayed that no interference is called for in this respect. 11. Having heard the learned counsel for the parties and having gone through the record of the case, we are of the considered vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emplated under Rule 57CC. 12. An identical question arose in Chandrapur Magnet Wires (P) Ltd. s cases (supra). Having interpreted the relevant provisions, it was ruled as under :- It is true that the assessee has not maintained separate accounts or segregated the inputs utilized for manufacture of dutiable goods and duty free goods as should have been done. The contention of the Department that in this situation, the assessee is not entitled to reverse the entries and get the benefit of the tax exemption is a question which merits serious consideration. There is no doubt that the assessee should have maintained separate accounts for duty free goods and the goods on which duty has to be paid. But our attention was drawn to a departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department, we see no reason why the assessee cannot make a debit entry in the credit account before removal of the exempted final product. If this debit entry is permissible to be made, credit entry for the duties paid on the inputs utilised in manufacture of the final exempted product will stand deleted in the accounts of the assessee. In such a situation, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A. In other words, the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken credit of the duty paid on the inputs used in manufacture of these goods. The same view was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC as well as exceeding 1800 CC. It (assessee) has also been manufacturing the Internal Combustion Engines of de-placement capacity below 1800 CC used in the manufacture of tractor, which was exempted from Central Excise duty. Meaning thereby the assessee is using the common inputs in manufacturing the exempted and dutiable final products i.e. the tractors. It is not a matter of dispute that the assessee has already paid the amount equivalent to 8% of the price of the second category of final products charged by manufacturer for the sale of such goods at the time of their clearance from the factory and fulfilled all the conditions. Once, the assessee has paid 8% of the indicated duty and fulfilled all the conditions in that eventuality, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
