Credit-reversal provisions do not apply when a job worker manufactures only dutiable excisable goods from supplied inputs.

Credit-reversal provisions under Rule 57CC, Rule 57AD, and Rule 6(3) apply only where common inputs are used to manufacture both dutiable and exempted goods. Where a job worker manufactures only dutiable excisable goods from cenvatted or partially processed inputs supplied by the principal manufacturer, the condition precedent for invoking those provisions is absent. On the stated facts, the goods were not exempted goods, so the cited rules were inapplicable and the appeal failed.

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Issues: Whether Rule 57CC and Rule 57AD of the Central Excise Rules, 1944, or Rule 6(3) of the Cenvat Credit Rules, applied where the respondent manufactured only dutiable excisable goods on job work basis from cenvatted or partially processed inputs supplied by the principal manufacturer.

Analysis: The governing principle was that the demand under the relevant credit-reversal provisions arises only where there is simultaneous manufacture of dutiable and exempted goods out of common inputs. The respondent's activity was confined to manufacture of dutiable excisable goods on job work basis, and the goods were not exempted goods. On those facts, the condition precedent for invoking the cited provisions was absent.

Conclusion: The provisions were inapplicable and the appeal failed.

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