TMI Blog2003 (4) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... s are using common inputs for both the aforesaid dutiable and exempted final products. The appellants were availing Modvat credit of the duty paid on such inputs. Accordingly, the appellants have been paying an amount equal to 8% of the sale price of exempted hot-rolled pattas and patties in terms of Rule 57CC(1) as it stood prior to 1-4-2000 and under Rule 57AD with effect from 1-4-2000 whenever such hot-rolled pattas and patties were cleared from their factories, the provisions under both the Rules are similar. 2.According to the learned Counsel, the department's case is that the appellants have collected 8% of the sale price of exempted goods from their buyers and, therefore, in terms of Section 11D of the Central Excise Act, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit of duty in respect of inputs used in the exempted product. Since the appellants have in addition recovered 8% from their customers as excise duty in respect of exempted goods, Section 11D applies to them and they are required to deposit the amount recovered by them under the said section as has been rightly ordered by the Commissioner. He also points out that the appellants have been issuing two sets of invoices and they have been recovering 8% clearly showing the same under column 4 as excise duty. 5.After hearing rival submissions and perusal of case records, we find that under the Modvat scheme, credit of duty paid on inputs is allowed to be utilized for payment of duty on finished goods. This is a scheme to prevent cascading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the exempted final goods. The logic of charging 8% perhaps lies in the fact that for most excisable goods the general rate of excise duty is 8%. We must mention that there is a separate provision under Rule 57CC(5) in respect of specific categories of final products in respect of which the amount payable is not 8% but is equivalent to the credit of duty on the inputs contained in such final products. Though sub-rule (5) of Rule 57CC is not applicable to this case, it is a pointer that the amount of 8% payable under sub-rule (1) of Rule 57CC is equivalent to the credit of duty taken on the inputs which is not otherwise admissible when the final products are exempt. 6.It is not disputed that the appellants are producing both dutiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise. 8.In the instant case, we are concerned with the exempted final product manufactured and sold by the appellants. The appellants have paid an amount of 8% in respect of these goods under Rule 57C(1), since they have taken credit of input duty which is otherwise not admissible to them. As these final products are otherwise exempted, it cannot be said that they have paid any duty of excise on such goods. We have perused Invoice No. 460, dt. 5-11-1999 at Page 39 of the paper book which shows the 8% against the column for excise duty though there is a stamp indicating "reversed under Rule 57CC". Despite such indication, it is clear from the said invoice that the appellants have collected the amount in a manner representing duty of exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty under the Act or the Rules. All that they are required to pay and have paid is an amount of 8% under Rule 57CC(1) as has been contended by the learned Advocate for the appellants. This amount cannot be considered as duty under Section 3 of the Act and it is also not called a duty under the said Rule 57CC(1). In fact duty has been defined under Rule 2(v) of the Central Excise Rules, 1944 to mean duty payable under Section 3 of the Act. However, a close reading of Section 11D indicates that it applies to every person, who is liable to pay duty under the Central Excise Act or the rules made thereunder. It has no reference to any goods in the said section. The reference is to a person. In the instant case, the appellant is a person who ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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