TMI Blog2008 (2) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the manufacture of pharmaceutical products, some of which are dutiable and others exempted. During the period of dispute (June, 2000 to December, 2003), they had cleared 'VEROL' Syrup (200 ml.) and 'VEROL' Drops (15 ml.) [both chargeable to 'nil' rate of duty] with out payment of duty while various 'P or P' medicaments (dutiable) were cleared on payment of duty. Certain common inputs (imported) had been used in the manufacture of all these products. When these imported inputs were received in their factory, they had not maintained separate accounts for the inputs to be used in the manufacture of dutiable final products and the inputs to be used in the manufacture of exempted final products. However, they segregated the inputs for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above demand was not enforceable in the absence of machinery provisions. The adjudicating authority rejected these arguments and confirmed the demand of Rs. 2,22,489/- against the assessee and imposed equal amount of penalty on them. In appeal, learned Commissioner (Appeals) relied on the Board's Circular No. 654/45/2002-CX, dated 19-8-2002 as also on certain decisions of the Tribunal, to sustain the order of adjudication. The present appeal is directed against the appellate Commissioners order. 2. After considering the submissions of learned Counsel for the appellants and learned SDR for the Revenue, I note that, upon receipt of the imported inputs in their factory, the appellants had taken Cenvat credit of the CVD paid on the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of such final products. This Tribunal, applying the ratio of the judgment in the case of Chandrapur Magnet Wires case (supra), held that the assessee cannot be said to have availed Modvat credit in respect of the inputs used in the manufacture of the exempted final products and accordingly the demand raised on them in terms of Rule 57AD(2) of the Central Excise Rules, 1944 was set aside. In another case cited by learned counsel viz. Commissioner of Central Excise, Mumbai-VI v. Philips India Ltd. [2006 (200) E.L.T. 106 (Tri. - Mumbai)], nitrogen was used as a common input in the manufacture of dutiable and exempted final products and Cenvat credit was taken by the assessee upon receipt of the input in their factory. Obviously, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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