Recovery machinery under excise law barred 8% payment demand on exempted sulphuric acid clearances.

Rule 57CC could not be enforced to require payment of 8% on exempted clearances of sulphuric acid during the relevant period because no recovery machinery existed for such collection. The demand was also criticised as a mere repetition of an earlier order without independent application of mind. Earlier Tribunal rulings, later affirmed by the Supreme Court, had already taken the same view on the absence of enforceable recovery provisions. On that basis, the demand was not sustainable and the assessee succeeded on the issue.

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Issues: Whether 8% amount was payable on the exempted clearances of sulphuric acid under Rule 57CC of the Central Excise Rules, 1944 in the absence of a recovery machinery during the relevant period.

Analysis: The demand was sustained on the footing that inputs were used both for dutiable and exempted clearances, but the order under challenge merely repeated the earlier order without an independent application of mind. The relevant period was held to be one in which no recovery machinery existed for enforcing such payment, and the issue was covered by earlier Tribunal decisions, affirmed by the Supreme Court, taking the same view.

Conclusion: The demand could not be confirmed under Rule 57CC for want of recovery machinery, and the assessee succeeded on this issue.

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