TaxTMI 
TaxTMI 
2013 (3) TMI 322
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....empted from payment of duty, thus over riding the legal provisions ? 2. It is the case of the Revenue that the assessee is engaged in the manufacture of dutiable products like CNC lathes, Lathe machines, Drilling Machines, Power Driven Pumps, CI Castings, Electric Motors etc., and exempted products like Centrifugal Water Pumps, Mono Bloc Pumps and Submersible Pumps. They filed declarations under Rule 57G of the Central Excise Rule 1944 for the purpose of availing Modvat Credit on various inputs. But they have not declared centrifugal pumps, Monobloc Pumps and Submersible Pumps as final products. The assessee used various foundry chemicals and rejected CI castings, machining wastes etc., as inputs in the manufacture of CI castings which in turn were used in the manufacture of exempted final products viz., Centrifugal Pumps, Monobloc pumps and Submersible Pumps and some varieties of CI Castings. The assessee also cleared CI castings as such outside the factory on payment of duty and some quantity of CI castings were used in the manufacture of exempted final products. As per Rule 57CC (9) of the Central Excise Rules, 1944, the assessee has to maintain separate accounts of receipt and....
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....the appeal by holding that the final product emerged out of the factory is CI castings and not PD Pumps manufactured by using the castings. Accordingly, the Tribunal came to the conclusion that the demand is not sustainable. Therefore, the present appeal is filed by the Revenue by raising the above substantial questions of law. 4. Learned counsel appearing for the Revenue submitted that the assessee manufactures both dutiable and non-dutiable final products viz., CI castings and submersible pumps, respectively. However, for manufacturing submersible pumps, the assessee captively consumed CI castings. When the assessee had used inputs both in the manufacture of dutiable final products as well as in the manufacture of exempted final products, they should maintain separate accounts showing the details of inputs received and consumed both in respect of manufacture of dutiable final products as well as exempted goods. If no such separate accounts are maintained as required under Rule 57CC (9), the assessee is bound to pay 8% of duty on the sale price of the exempted goods at the time of clearance. 5. He further contended that the finding of the Tribunal that the final product emerged ....
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....s, if he fails to maintain a separate account. In this case, the original authority dropped further proceedings by holding that CI castings themselves are the final products as they were sold as such as well as captively consumed for the manufacture of PD pumps. Therefore, he found that that PD pumps are not final products. He further observed that when CI castings were cleared on payment of duty as such and the second category of the final products were used captively for the manufacture of PD pumps, the question of payment of an amount equivalent to 8% on the exempted PD pumps value does not arise. 10. On the other hand the first appellate authority found that the assessee was manufacturing both CI castings as well as monobloc pumps etc, while the former is a dutiable one and the latter is an exempted one. He also specifically found that the asessee used various inputs for the manufacture of their dutiable and non-dutiable final products. Insofar as the non-dutiable final products, viz., the pumps are concerned , the first appellate authority has found that the assessee had not followed Rule 57CC(9) as they have not admittedly maintained separate accounts in respect of the input....
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....o recover a presumptive sum equal to eight per cent of the price of exempted goods at the time of their removal where the manufacturer did not undertake maintenance of inventory/accounts of the clearance of exempted final products. Even sub-rule (7) of Rule 57-CC was based on deemed priceif read with Rule 57-CC(1). Sub-rule (7) read with sub-rule (1) prevented an assessee from contending that he was not liable to pay the presumptive sum of eight per cent of the price of exempted goods on the ground that the said exempted goods were wholly manufactured out of inputs on which no credit of duty had been taken under Rule 57-A. The amount required to be paid at the time of removal of exempted goods under Rule 57-CC(1) had to be done in the same manner as was the case with any other excisable goods as the rate of duty stood determined at the rate of eight per cent in the Rule itself. The said presumptive amount was required to be paid by debiting in PLA register or by payment in cash. 17. As stated above, there was an alternative provided under sub-rule (9) which relieved the manufacturer of the liability to pay eight per cent of the price of exempted goods at the time of removal of suc....
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....nd on the other hand, it is also the monobloc pumps which are exempted from payment of duty. It is also the finding of the first appellate authority that the assessee used various common inputs in both dutiable and exempted final products. Therefore, when further finding of not maintaining separate account is not disputed by the assessee, automatically, Rule 57CC(9) comes into operation. 15. No doubt, the learned counsel for the assessee by placing the order in original made in the case of Texmo Industries Texmo Industries Vs. Commissioner of Central Excise, Coimbatore case contented that even in that case they have not maintained separate accounts and therefore, the decision of the larger bench of Delhi Tribunal reported in ( 2007) (208) E.L.T 338 has to be applied in this case. He also relied on the decision reported in 1996 (81) ELT 3 (SC) (Chandrapur Magnet Wires Vs. Commissioner of Central Excise). A perusal of the facts of that case shows that it was in respect of an exemption notification and the application of Rule 57A of the Central Excise Rules. We are unable to find any similarity on the facts of that case with the present one. Likewise, the other decisions relied on by....