2007 (8) TMI 578

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.... in the manufacture of dutiable products glass, glass mirrors and also exempted products like silica oxides. (b)     The silica oxide is manufactured from raw silica sand and in the process of manufacturing silica oxides, they used various chemicals. The chemicals used in relation to manufacture of silica oxides is also used in relation to manufacture other dutiable products. They do not maintain separate accounts in respect of inputs which have gone into manufacture of exempted silica oxides. (c)     During investigation, they paid a sum of Rs. 26,86,397/- representing the amount payable under Rule 57CC. (d)    The show cause notice was issued demanding under Rule 57CC an amou....

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....of the contention that the recovery @ 8% of the value of the exempted goods under Rule 57CC is permissible. She also relied on the decision in the case of Vinar System (P) Ltd. v. CCE, Kolkata-II, as reported in 2005 (191) E.L.T. 1043 (Tri-Kolkata), wherein it has been held that the obligation to follow the Rule 57CC(1) or 57CC(9) is completely independent of the existence or non-existence of the supplementary recovery and penal provision for floating Rule 57CC. 5. Learned advocate appearing for the respondent relies on the Circular of the Board No. 591/28/2001-CX, dt. 16-10-2001, wherein it has been clarified "where the assessee has not paid the amount (under Rule 57CC), the availment of corresponding credit of input is incorrect. ....

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....le if the duty is paid on the final product. As a corollary, if no duty is paid on the final product, no credit was available on the raw material and if any credit was taken wrongly, the same are recoverable as provided in the Rule. Rule 57CC(1) provides an option to the assessee to pay amount calculated @ 8% of the price of exempted product. This option cannot be thrust upon any assessee. If they have not opted for and fulfilled the provisions of 57CC(1), the department would be free to proceed to recover the input duty credit used in the manufacture of exempted product and other action as provided for. 7.2 In this case, the respondent, though paid a sum of Rs. 27,64,978/- during the course of investigation, the very fact that the ....