TaxTMI 
TaxTMI 
2009 (8) TMI 493
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.... had also confirmed duty of Rs.998/- in relation to the breakage of the product under Rule 9(2) of the said Rules read with Section 11A of the Central Excise Act, 1944 and had also demanded interest under Section 11AA of the said Act and had imposed penalty to the tune of Rs.50,000/- under Rule 173Q of the said Rules. 3. Only point which arises for consideration in the matter is whether a manufacturer, who had not maintained separate accounts in relation of the inputs used in the manufacture of the final products which were chargeable to duty as well as those which were exempt from the whole of duty of excise or chargeable to nil rate of duty and had, at the end of the month, reversed the credit which was sought to be availed in relation to the inputs used in the exempted final product but after the clearance of the final products would still liable be liable to pay the amount in terms of Rule 57CC of the said Rules? 4. The undisputed facts in the case in hand are that the appellants did not maintain separate accounts in respect of the inputs used in the manufacture of the final products which were subject to duty and those which were exempted from the payment of excise duty or w....
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....e of separate accounts in the facts and circumstances of the case could not be a justification to deny such benefit to the appellants. He further submitted that denial of such benefit would virtually be in violation of the mandate of Rule 57D(2). He has placed reliance in the decision in the matter of Hello Minerals Water (P) Ltd. v. UOI, reported in 2004 (174) E.L.T. 422 (All.), in the case of Rallis India Ltd. v. UOI reported in 2009 (233) E.L.T. 301 (Bom.) and in the case of Chandrapur Magnet Wires (P) Ltd. v. C.C.E., Nagpur reported in [1996 (81) E.L.T. 3 (S.C.)]. 6. On the other hand, the learned SDR drawing our attention to Rule 57CC and sub-rule (3), (4), (5) and (9) submitted that the manufacturer who does not maintain separate accounts of inputs utilised in two different types of final products and yet avails credit on all such inputs, mere reversal of the credit at the end of the month and that too after clearance of the final products would not be entitled to evade the payment of the amount in terms of Rule 57CC. He further submitted that Rule 57D is not attracted at all in the matter in hand as the credit had not been denied by resorting to the provisions of the said R....
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....uty liability and refrain from availing credit in respect of the inputs utilised in duty free final products. The word " shall" , used in the said Rule with reference to the requirement of maintenance of separate account as well as with reference to obligation not to take credit of the specified duty paid on the inputs utilised in duty free final products, discloses the purpose and the mandatory nature of the said rule. It is however the contention of the learned Advocate for the appellants that the very nature of the inputs may not permit or make it possible for the manufacturer to maintain separate inventory and accounts in respect of receipt of such inputs which are required to be utilised in manufacture of the final products those which are subject to duty as well as those which are not subject to duty, and in such cases, the Courts have taken view that on reversal of credit in relation to inputs utilised in manufacture of products which are not subject to duty would amount to substantial compliance of the mandate of such rules. Heavy reliance is placed in that regard in the decision of the Allahabad High Court in the matter of Hello Mineral Water (P) Ltd. (supra). 10. The All....
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....at in that case. A decision in an authority for what it decides and not what can be logically deduced therefrom, Hence, every judgment has to be understood in the light of the facts of the case and nothing beyond what is stated therein can be read into it [vide Union of India v. Dhanwani Devi reported in 1996 (6) SCC 44; Commissioner of Customs (Port), Chennai v. Toyota Kirloskar Motor P. Ltd. reported in 2007 (213) E.L.T. 4 (S.C.); Sneh Enterprises v. Commissioner of Customs, New Delhi reported in 2006 (202) E.L.T. 7 (S.C.)]. 13. It is pertinent to note that the decision in the Apex Court on the point in issue was very clear to the effect that such reversal has to be before removal of the duty free or exempted final product. Para 6 of the said decision of the Apex Court in Chandrapur Magnet Wire (P) Ltd. reads: 6. It is true that the assessee has not maintained separate accounts or segregated the inputs utilised for manufacture of dutiable goods and duty free goods, as should have been done. The contention of the Department that in this situation, the assessee is not entitled to reverse the entries and get the benefit of the tax exemption is a question which merits serious cons....
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....e Court judgment has been clearly incorporated in Rule 57CC itself. Rule 57CC(1) clearly requires the payment of the amount of 8% of the price of the final product charged by the manufacturer for sale of such products at the time of their clearance from the factory, unless the provisions of sub-rule (9) are complied with. Sub-rule (9) requires maintenance of separate inventory and accounts of receipt and use of inputs to be utilised in the final products which are exempt from the duty or which are subject to nil rate of duty besides that no credit of specified duty paid on such inputs should be taken by the manufacturer. The expression "at the time of their clearance from the factory" and in sub-rule (1) of Rule 57CC clearly discloses that the payment of the amount of 8% of the price of the final product has to be made at the time of clearance of such products, unless the provisions of sub-rule (9) of the Rule 57CC are complied with. In other words, if the manufacturer fails to maintain the separate accounts in terms of sub-rule (9) thereof, he cannot evade the liability to pay the amount of 8% of the price at the time of clearance of the final product. This obligation to pay the a....
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.... provisions of sub-rule are at all attracted in the case in hand. It is nobody's case that the credit has been denied to the appellant in relation to the inputs in question. It is the case of the appellants themselves that they voluntarily sought to reverse the credit. In such a case, it cannot be said that there was any denial of credit by the Department. Besides there is no order placed before us which would disclose that there was denial of credit by the Department on such inputs. Learned Advocate for the appellants has drawn our attention to the Trade Notice issued by the Commissioner of Indore being Trade Notice No. 54/96 dated 3rd September 1996 to clause 4.4 of the said Trade Notice. The same reads as under: It may please be noted that Rule 57CC applies only to exempted final product or the products which are chargeable to nil rate of duty which are cleared from the factory. When inputs were used in the manufacture of excisable goods, which in turn, are captively consumed in the manufacture of final product, the said rule has no application even though such intermediate excisable goods may be exempt from the duty when used captively". 18. The opening sentence of Rule 57CC(....