Clearances under recipient-liability notification are not exempted goods for Rule 57CC reversal under Central Excise law.

Clearances of forgings and dies made under a notification placing duty liability on the recipient were not treated as exempted goods for the purpose of Rule 57CC of the erstwhile Central Excise Rules, 1944. The Tribunal applied earlier decisions and held that where the manufacturer clears goods on such a basis, the clearances do not attract the 8% reversal demand under Rule 57CC(1). The duty demand was therefore unsustainable and the appeal was allowed.

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Issues: Whether the clearances of forgings and dies to Heavy Vehicles Factory under Notification No. 70/92 dated 17.6.1992, as amended by Notification No. 66/95 dated 16.3.95, constituted clearances of exempted goods so as to attract Rule 57CC of the erstwhile Central Excise Rules, 1944 and the consequent demand of 8% of the value of such clearances.

Analysis: The Tribunal noted that the appellant manufactured dutiable forgings and dies and that the disputed clearances were made under the notification whereby the recipient was liable to pay duty. Following the earlier decisions relied upon, it held that such clearances could not be treated as exempted goods for the purpose of Rule 57CC(1) of the erstwhile Central Excise Rules, 1944.

Conclusion: The duty demand was held to be unsustainable and the appeal was allowed.

Ratio Decidendi: Goods cleared under a notification that shifts duty liability to the recipient do not become exempted goods for the purpose of Rule 57CC of the erstwhile Central Excise Rules, 1944.

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