TaxTMI 
TaxTMI 
2016 (11) TMI 772
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.... issue involved in the adjudication proceedings, Sub-rule (3) of Rule 57C was added by Notification 35/96, dated 31-8-1996. In view of the circumstances, the matter requires reconsideration. Therefore, the impugned order is set aside, the matter is remanded to adjudicating authority for deciding afresh after affording a persona/ hearing to the appellants. 2. The facts of the case are that the appellant is taking credit on consumable including furnace oil. A show cause notice was issued to the appellant alleging that the appellant is not entitled to avail credit on furnace oil used in the manufacture of dutiable goods as well as final exempted goods cleared by availing the Notification No. 04/97 and Notification No.5/98, therefore, the appe....
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....ed nor 8% duty reversed in respect of clearances of exempted goods?" 7. Hon'ble High Court has analysed the issue and observed as under: 7. After hearing learned counsel for the parties and perusing the orders passed by the Adjudicating Authority, Commissioner (Appeals) and the Tribunal, we find that there is no merit in the appeal and the same deserves to be dismissed. At the outset we deem it just and appropriate to refer the provisions of Rule 57C(2) & (3) and Rule 57CC(1) & (9) of the Rules, which have direct bearing on the controversy involved in the present appeal and the same reads as under : "57C. Credit of duty not to be allowed if final products are exempt.- (1) xxx xxx xxx (2) Where a manufacturer avails of the credit o....
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....ct of inputs (other than inputs used as fuel) which are used in or in relation to the manufacture of any goods, which are exempt from the whole of the duty of excise leviable thereon or chargeable to Nil rate of duty, the manufacturer shall maintain separate inventory and accounts of the receipt and use of inputs for the aforesaid purpose and shall not take credit of the specified duty paid on such inputs. " (emphasis added) 8. A conjoint reading of sub-rule (2) and (3) of Rule 57C of the Rules shows that in cases where inputs are intended to be used as fuel, the provision of sub-rule (1) of Rule 57CC of the Rules are not to apply. However, in other cases where a manufacturer of any final product which is chargeable to duty as well as in a....
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....isions. Rule 57C of the Central Excise Rules, 1944 relates to credit of duty not to be allowed if final products are exempt. Rules 57CC provides adjustment of credit on inputs used in exempted final products or maintenance of separate inventory and accounts of inputs by the manufacturer. 12. As per Rule 57C(1), (2) & (3) of the Rules credit of the specified duty on such quantity on inputs as were used in the manufacture of final products, which are exempted from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty is admissible only if the condition of Rule 57CC(1) i.e. clearance of goods on payment of an amount equal to 8% of the price of the goods (excluding Sales Tax and other taxes if any payable on su....