2005 (9) TMI 406 - AT - Central Excise

Summary

Issues:
1. Interpretation of General Exemption No. 66 Para 45 of Notification No. 3/2001 for clearance of a car without payment of Excise Duty.
2. Rejection of refund claim for debited amount of 8% of the assessable value.
3. Application of Rule 57AD(2)(b) of Central Excise Rules, 1944 and Circular No. 621/12/2002.
4. Treatment of clearance of dutiable and exempt goods manufactured from common inputs.

Analysis:

1. The appellants, engaged in the manufacture of motor vehicles, cleared a car without payment of Excise Duty based on documents from the Embassy of Bulgaria under General Exemption No. 66 Para 45 of Notification No. 3/2001. The Assistant Collector granted permission for duty-free clearance subject to reversal/payment of credit as per Rule 57AD(2)(b) of Central Excise Rules, 1944. An amount of 8% of the assessable value was debited under protest. The refund claim for this amount was rejected, leading to the appeal.

2. The Tribunal found no infirmity in the lower authorities' interpretation to reject the refund. The plea on Rule 57AD(2)(b) and the application of Circular No. 621/12/2002 were considered. It was determined that the circular's benefit was not applicable to the clearance under the exemption from Central Excise levy as claimed and granted under Notification No. 3/2001. Since the car was exempt from duty, the recovery of the 8% amount was correctly done as mandated by law. The argument regarding the clearance of dutiable and exempt goods from common inputs was deemed without merit.

3. Consequently, the appeal was rejected by the Tribunal, affirming the correctness of the actions taken in accordance with the relevant legal provisions and circulars. The judgment highlighted the importance of complying with the specific requirements of exemptions and rules governing the clearance of goods to avoid disputes and ensure adherence to the legal framework in excise matters.