2001 (8) TMI 685 - AT - Central Excise

Summary

Issues:
Challenge to reversal of credit on fuel used in the manufacture of exempted final product.

Analysis:
The appellants challenged the order-in-original passed by the Commissioner of Central Excise (Appeals) regarding the reversal of credit on consumables, including fuels, used in the production of exempted final products. The Commissioner directed the appellants to reverse the credit, pay interest, and penalty under Sec. 11AC of the Central Excise Act. The appellants contended that Rule 57C(3) exempts inputs intended to be used as fuel from the reversal of credit. They argued that Rule 57CC provides for the adjustment of credit on inputs used in exempted final products but not on fuel. The Commissioner's order stated that the appellants failed to reverse the credit on fuels, unlike other assesses, and that the exemption under Rule 57CC(9) pertained to maintaining separate accounts for fuel, not for the reversal of credit. The Commissioner's decision did not consider Rule 57C(3) added by Notification 35/96, dated 31-8-1996. The Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision after providing a personal hearing to the appellants.