2013 (6) TMI 812 - AT - Central Excise

Summary

Issues involved: Interpretation of Rule 57CC of the Central Excise Rules regarding maintenance of separate records for common inputs and liability to pay duty.

Summary:
The appeals were taken up following a remand order from the Hon'ble Bombay High Court. The common issue at hand was the Revenue's appeal against the Commissioner (Appeals) order regarding the respondents' availing of credit for common inputs used in manufacturing goods cleared on payment of duty and job-work goods. The Revenue contended that as the respondents did not maintain separate records for common inputs, they were liable to pay 8% of the price of goods cleared without duty under Notification 214/86-CE. The adjudicating authority initially dropped the proceedings, but the Revenue appealed to the Commissioner (Appeals) who also ruled against them.

Upon review, it was found that the respondents were indeed reversing the proportionate credit availed for inputs used in manufacturing goods cleared under Notification 214/86-CE at nil rate of duty. The Finance Act, 2010 retrospectively amended Rule 57 of the Central Excise Rules to require only proportionate reversal of credit for such goods. Consequently, the Tribunal found no fault with the impugned order and dismissed the appeals.

*(Dictated in Court)*