TMI Blog2000 (8) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 contention was that the price ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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) of the Central Excise Act, 1944. They have further contended that as the price at which the appellants were selling the Pulp to independent buyers was available, the same should have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 respondents' contention is that in case of stock transfer of goods from one unit to the other unit of the same company, none of the above ingredients of the Sale are present. Admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 are utilising the Modvat credit availed on the basic inputs for utilisation towards the payment of duty on the final product i.e. paper. When the same intermediate product i.e. Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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