TaxTMI 
TaxTMI 
2007 (3) TMI 100
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....or supply to Ministry of Defence under exemption Notification No. 64/95, dated 16-3-1995. It is the contention of the appellants that majority of the inputs which are used in the manufacture of goods cleared to Ministry of Defence without payment of duty were imported by the appellants without payment of customs duty based on the certificate issued by the Ministry of Defence and therefore the question of availing credit does not arise. During the course of visit by the Central Excise Officers, it was found that the appellants were not maintaining separate accounts for common inputs used in the manufacture of both dutiable as well as exempted final products. As per the statement recorded, it was admitted that no separate inventory of receipt....
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....ue for use in the manufacture of exempted final products with the help of documents. 2. The above matter was re-adjudicated by the Commissioner, where the appellants produced all the issue slips relating to the inputs on which the credit was taken to establish that they have used the inputs in the manufacture of dutiable final products only and where such inputs were not used in the manufacture of dutiable final products, the credit so taken was thereafter reversed. The Commissioner, however, has expressed the doubt or the authenticity of the issue slips on two grounds. First that these issue slips were different from the one which were submitted earlier by the appellants during the course of investigation and second that the appellants ha....
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....d cross-reference to RG-23A Part-I and hence one view can be that they have established co-relation between the inputs arid issue slips and consequently between the issue slips and final products. In view of this, once co-relation has been established, the Commissioner cannot reject their claim or the ground that the records with regard to purchase/receipt of inputs used lit the manufacture of exempted final goods were not produced as there was no such direction from the CESTAT nor was there any such requirement as for the purpose of showing the use of inputs on which the credit was taken, scrutiny has to be limited to the records pertaining to inputs on which credit has been taken and not on the inputs on which the credit has not been take....
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....8%. 4. The learned SDR, however, submits that there were grave discrepancies in the issue slips and since the appellants have failed to produce the exact requirement of inputs in each of the models of the exempted products, it cannot be established whether the entire inputs used in the exempted products were the one on which no credit has been taken or that part of the inputs meant for dutiable products have been diverted for use in the exempted products. Since the appellants have failed to maintain separate accounts, they were required to pay duty @ 8% on the exempted final products in terms of Section 57CC (sic) (Rule 57CC) or equivalent provisions from time to time. 5. We have considered the submissions. We find that the Commissioner h....
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....ue slips now produced were not in existence earlier and have been concocted subsequently. There is neither any allegation in the show cause notice nor any evidence to show that the inputs meant for dutiable final products have been used in the manufacture of exempted final products without reversing the credit. in fact from the RT-12 returns/copy of invoices and RG-23A Part-I and Part-II register, the samples of which were shown to us, we find that these records show that the appellants have been reversing the credit in respect of inputs used in the manufacture of exempted final products and that the RG- 23A Part-I and Part-II registers show debit entry and invoice number through which such entry was made and the name of the party to whom t....