2007 (4) TMI 675 - AT - Central Excise

Summary

Issues involved: Authorization under Section 35B(2) of Central Excise Act, 1944 and demand of 8% of the value of exempted goods under Rule 57CC.

Authorization under Section 35B(2): The appeal was filed by the Revenue against the order of the Commissioner(Appeals). The respondent raised a preliminary objection regarding the authorization under Section 35B(2) of the Central Excise Act, arguing that the committee constituted for reviewing the appeal was not valid as it was signed by one Commissioner instead of two. The respondent contended that one individual cannot form a committee. However, the department argued that the Commissioner holding additional charge was competent to review the appeal in dual capacity. The Tribunal held that the Committee was validly constituted and the appeal was rightly reviewed, overruling the preliminary objection.

Demand of 8% of the value of exempted goods under Rule 57CC: The issue in the present appeal was regarding the demand of 8% of the value of exempted goods under Rule 57CC where credit is availed on inputs used in the manufacture of exempted goods. The adjudicating authority rejected the case of the assessee for not maintaining prescribed registers or indicating the use of inputs. However, the Commissioner(Appeals) accepted the maintenance of separate accounts based on the stock register annexed to the memorandum of appeal. The Commissioner relied on a Circular clarifying options for SSI units availing full exemption, stating that the demand of 8% was not warranted. The Tribunal remanded the matter back to the original adjudicating authority for proper appraisal of records and specific findings on the issues raised by both parties, allowing the appeal in remand to keep all issues open for further adjudication.