Rule 57CC compliance turns on actual credit reversal for exempted goods, even without separate input records.

Reversal of the actual Modvat credit attributable to inputs used in exempted goods satisfied compliance with Rule 57CC on the facts, even though separate records of common inputs were not maintained. The dispute was limited to the absence of separate records, and the reversed amount was not in dispute. As the assessee had already reversed the credit on the basis of its records, the statutory requirement under sub-rule (a) was treated as met. The assessee was therefore not liable to pay the 8% amount under Rule 57CC, and the Revenue's objection failed.

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Issues: Whether the assessee was liable to pay 8% amount under Rule 57CC of the Central Excise Rules, 1944 for not maintaining separate records of common inputs used in the manufacture of dutiable and exempted goods.

Analysis: The assessee had reversed the actual Modvat credit availed on inputs used in exempted products on the basis of its records, and the amount reversed was not in dispute. The controversy was confined to the absence of separate records. Compliance with sub-rule (a) of Rule 57CC was found to exist on the facts.

Conclusion: The assessee was not liable to pay the 8% amount under Rule 57CC, and the Revenue's contention failed.

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