9911796707
TMI Blog2000 (8) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... lp to their other Units where it is used in the manufacture of dutiable final product i.e. paper. Some quantities of Pulp are also being sold to the independent buyers. As the Pulp is attracting nil rate of duty, the respondents were reversing the Modvat credit availed by them on the inputs at the rate of 8% of the price of the Pulp in terms of Rule 57CC of the Central Excise Rules, 1944. Similarly, Modvat credit to the tune of 8% based on the cost price of the Pulp was also being reversed by the respondents in case of transfer of Pulp to their other Units. 2.A dispute arose between the Revenue and the respondents as regards the cost of Pulp transferred to their other unit for the purposes of reversal of Modvat credit. The Revenue's conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Rule 57CC applies only to the sale of the exempted product because it is the sale price on which reversal @ 8% required to be made. (c) As the appellant has already paid 8% on the cost price, even though they were not required to do so, there is no room for further demand. (d) Provisions of Section 4 of the Act has no application since the adjustment of credit U/R 57CC, is not payment of duty U/S 3 of the Act. (e) Provisions of Rule 9(2) and Section 11A will have no application to the case." 4.The Revenue in their Memo of Appeal have referred to the definition of SALE under Section 2(h) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides for payment of an amount equal to 8% of the sale price charged by the manufacturer for sale of such goods at the time of their clearances from their factory. As such, it becomes evident that Rule 57CC is applicable only when there is a sale of the product at nil rate of duty. In the case of transfer of Pulp to other Sister Units, no sale can be said to be involved and as such, the provisions of Rule 57CC will have no application. The definition of Sale as given in Section 2(h) of the Central Excise Act, 1944 is as under :- "(h) "sale".................. means any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration." The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be deferred till the sale is effected from the depot and the prices known. This makes the position clear that no reversal is required when there is no sale either from the factory gate or from the depot or from the consignment agent's premises etc. 6.The issue can be examined from another angle also. Admittedly, the appellants are availing the Credit paid on the inputs used in the manufacture of paper. Pulp emerges at the intermediate stage. As such, when the Pulp is used in the respondents' own factory, Modvat Credit availed in respect of the inputs still remains available to the respondents, even if intermediate products are not chargeable to Duty of Excise in terms of Rule 57D of the Central Excise Rules, 1944. The respondents a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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