2004 (8) TMI 753 - AT - Customs

Tribunal Rules in Favor of Indian Railways on Interpretation of Rule 57CC

Indian Railways (Wheel & Axle Plant) Versus CCE, Bangalore

Indian Railways (Wheel & Axle Plant) Versus CCE, Bangalore - 2004 (116) ECR 733 Issues:1. Interpretation of Rule 57CC of the Central Excise Rules regarding payment of 8% of the price for exempted goods.2. Applicability of Rule 57AD of the amended Rules 2001 in the context of maintaining separate accounts for inputs.3. Determination of duty payment for goods transferred within the same organization.4. Legal implications of Tribunal decisions on similar cases regarding recovery of amounts under Rule 57CC.Detailed Analysis:1. The main issue in this case was the interpretation of Rule 57CC of the Central Excise Rules, which required a manufacturer to pay an amount equal to 8% of the price for exempted excisable goods if Modvat/Cenvat credit was taken on inputs without maintaining separate accounts. The appellant, a unit of Indian Railways, argued that since they were transferring goods to different workshops within the Indian Railways and not selling them to external parties, the provisions of Rule 57CC should not apply. They relied on a previous Tribunal decision that supported their position.2. The appellant further contended that they were not maintaining separate accounts for inputs used in dutiable and exempted goods, and they had availed Modvat/Cenvat credit from 1.7.1995. The issue of whether Rule 57AD of the amended Rules 2001 applied to their situation was also raised. The appellant argued that the recovery sought by the Revenue was neither duty nor Modvat credit, and since there was no specific machinery for recovery as per the Act and Rules, such recovery could not be enforced.3. The Revenue, represented by the Ld. SDR, argued that each factory within the Indian Railways was considered an independent unit for Central Excise purposes, even if owned by the same organization. Therefore, when goods were cleared from the Wheel & Axle Plants to other units, they were required to pay 8% of the value of the goods as per Rule 57CC. The Revenue accepted the Tribunal's decision in a previous case, which stated that there was no machinery for the recovery of the 8%, and thus, they had no objection if the appeals were allowed.4. The Tribunal, after considering the arguments from both sides, referred to the previous decision in a similar case involving Rule 57CC and the Tribunal's finding that there was no provision for the reversal of amounts required under the rule. The Tribunal also noted the decision in the case of Pushpaman Forgings, which had been upheld by the Supreme Court, supporting the view that recovery under Rule 57I/57AH or Section 11A could not be enforced due to the lack of machinery provision. Consequently, the Tribunal set aside the Commissioner's order and allowed the appeals, ruling in favor of the appellant.In conclusion, the Tribunal's judgment clarified the application of Rule 57CC in the context of exempted excisable goods, the requirements for maintaining separate accounts under Rule 57AD, and the legal implications of recovery proceedings for amounts under the Central Excise Rules.