2005 (12) TMI 415 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57CC regarding the recovery of duty on specific products.
2. Admissibility of credit on inputs used in the manufacture of exempted and dutiable products.
3. Quantification of duty payable under Rule 57CC.
4. Application of penalties under Rule 173Q.
5. Reversal of credit on specific inputs.

Interpretation of Rule 57CC:
The case involved a dispute over the applicability of Rule 57CC in relation to the products Ghee and Husk. The Revenue contended that Rule 57CC should apply to both Ghee and Husk as they are final products, but the Commissioner held that the rule only applied to Ghee. The Tribunal upheld the Commissioner's decision, emphasizing that Husk, being a waste product cleared as cattle feed, did not fall under Rule 57CC. The Tribunal concluded that no modvat credit could be denied on inputs due to waste products under Rule 57D.

Admissibility of Credit on Inputs:
The Respondents were availing credit on inputs like Hydrochloric Acid, Caustic Soda Lye, and Malted Barley used in manufacturing Horlicks, an excisable commodity. The Revenue sought recovery under Rule 57CC for the period from 1996 to 1999. The Commissioner ordered the payment of a specific amount for Ghee but dropped the demand for Husk. The Tribunal agreed with the Commissioner's decision, stating that the reversal of credit on Caustic Soda Lye and Hydrochloric Acid was sufficient, and no recovery was necessary for the mentioned period.

Quantification of Duty and Penalties:
Regarding the quantification of duty payable under Rule 57CC and the imposition of penalties under Rule 173Q, the Commissioner had ordered the recovery of a specific amount for Ghee and imposed a penalty. The Tribunal found the Commissioner's decision appropriate and dismissed the Revenue's appeal, stating that the quantified amount for Ghee during a specific period was not made known to the respondent, and no recovery was necessary for the mentioned period due to the reversal of credit.

Reversal of Credit on Specific Inputs:
The Revenue contended that the Respondents had not reversed the credit taken on Malted Barley, an input for Horlicks. However, the Tribunal found no reason to reverse the credit on Malted Barley and dismissed the Revenue's appeal, stating that there was no merit in the Revenue's contentions. The Tribunal upheld the Commissioner's decision and concluded that the Revenue's appeal lacked merits.

In conclusion, the Tribunal upheld the Commissioner's order, emphasizing the correct application of rules regarding duty recovery, admissibility of credit on inputs, quantification of duty payable, imposition of penalties, and reversal of credit on specific inputs. The Tribunal dismissed the Revenue's appeal, finding no infirmity in the Commissioner's decision.