2005 (2) TMI 328 - AT - Central Excise

Appellants win appeal on 8% tax, absence of recovery machinery key.

The appeals revolved around the requirement for appellants to pay 8% on the price of exempted goods under Rule 57CC of Central Excise Rules, 1944. The ... Adjudication - Demand - Cenvat/Modvat Issues: Whether appellants are required to pay 8% amount on the price of exempted goods under Rule 57CC of Central Excise Rules, 1944.In these appeals, the issue pertains to the payment of 8% amount on the price of exempted goods, specifically Sulphuric Acid, cleared under Rule 57CC of the erstwhile Central Excise Rules, 1944. The appellants had used Vanadium Pentaoxide as an input for both dutiable and exempted products. The Tribunal remanded the matter to examine the issue de novo. The Commissioner reaffirmed the earlier order, which was challenged by the learned Advocate on the grounds that the Commissioner should have independently applied his mind. The absence of recovery machinery during the relevant period was highlighted, citing precedents such as Indian Railways v. CCE, Wheel & Axle Plant v. CCE, and Pushpaman Forgings v. CCE. The Tribunal's finding on the lack of recovery machinery was upheld by the Apex Court. Consequently, the confirmation of demand by the Commissioner was deemed unfounded, and the appeals were allowed with consequential relief.The learned DR supported the departmental view.Upon careful consideration, it was acknowledged that the Commissioner is obligated to independently assess the matter and not merely reiterate the previous order. The absence of recovery machinery during the relevant period was a crucial factor, as established in previous judgments upheld by the Apex Court. Therefore, the confirmation of demand by the Commissioner lacked a valid basis. Accordingly, the impugned orders were set aside, and the appeals were allowed with any consequential relief.