Excise credit reversal cannot be recovered as duty without express machinery under the rules.

Rule 57CC prescribed reversal of an amount linked to exempted clearances, not recovery of duty or Modvat credit. Where the assessee had not maintained separate accounts for inputs used in dutiable and exempted goods, the Tribunal held that no recovery machinery existed under the Central Excise Rules to enforce the amount demanded under Rule 57CC, and that recourse to Rule 57I, Rule 57AH or Section 11A could not support such recovery. The demand was therefore unenforceable, and the order confirming it was set aside.

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Issues: Whether the amount equivalent to 8% of the value of exempted clearances could be recovered under Rule 57CC and related provisions when the appellant transferred goods to railway workshops and factories, and whether any recovery could be sustained in the absence of a specific machinery provision.

Analysis: The appellant manufactured goods partly cleared to railway workshops and partly sold to outsiders, and had taken Modvat/Cenvat credit without maintaining separate accounts for inputs used in dutiable and exempted goods. The Tribunal relied on its earlier decision in the appellant's own case and on the principle affirmed in Pushpaman Forgings that Rule 57CC contemplated reversal of an amount, not recovery of duty or Modvat credit. It held that no machinery existed under the Central Excise Rules to recover the amount demanded under Rule 57CC, and that recourse to Rule 57I, Rule 57AH or Section 11A could not sustain such recovery.

Conclusion: The demand was not enforceable and the recovery action failed.

Final Conclusion: The order confirming the demand was set aside and the appeals were allowed.

Ratio Decidendi: In the absence of an express recovery machinery, an amount prescribed for reversal under the excise credit scheme cannot be recovered as duty through general recovery provisions.

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