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TMI Blog2008 (7) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... and Denatured Spirit. Duty paid molasses was used in the appellants' own factory for manufacture of rectified spirit, which is used for manufacture of denatured spirit. The rectified spirit so manufactured was also used captively for manufacturing country liquor, which is exempted from Central Excise duty. Since the appellant had not maintained a separate set of accounts for consumption of duty paid molasses, which was used in rectified spirit that was used in manufacturing the country liquor, a show cause notice was issued to appellants for reversing the amount of Modvat/Cenvat credit availed on the molasses. The adjudicating authority confirmed the demand and also imposed penalty. On an appeal, the Commissioner (Appeals) upheld the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d spirit was manufactured out of duty paid molasses. It is his submission that it is an admitted fact that there was no sale of rectified spirit from the factory premises. It is his contention that the appellant could not have taken the credit on duty paid molasses, which is used for manufacture of rectified spirit and further used in the manufacture of country liquor. He submits that the impugned order is very detailed one and correct, does not require any interference. It is his submission that though the Registry has registered the cross-objection, as filed by the Commissioner of Central Excise, Auranagabad, it is only written submission in support of the impugned order. 5. We considered the submissions made by both sides and perused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment:- "14. In our view, Rule 57CC, therefore, required payment of a presumptive amount of eight per cent of the price of the exempted goods, net of sales tax and other taxes. This rule was self contained provision indicating the basis on which price had to be determined. The rule, however, 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 applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire rule is based on "deemed price" and "recovery of presumptive amount" and, therefore, in our view, the words "price charged at the time of sale" must be read as "eight per cent of the value of the exempted goods". Our interpretation stands supported by the Instructions issued by the Central Board of Excise and Customs based on the Circular No. B-42/1/96-TRU, dated 27-9-1996. This is where Section 4 and the Valuation Rules, 1975 come into play. In the light of the above discussion, the adjudicating authority was required to adjudicate upon applicability of Rule 6(b)(i) and Rule 6(b)(ii). However, it has been held by the adjudicating authority that Rule 6(b)(i) is not applicable, hence, in our view the only issue which remains to be deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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