2011 (7) TMI 853 - HC - Central Excise

Refund - Rule 57-D of Central Excise Rules 1944 - learned Counsel for the Revenue supported the orders on record and submitted that product manufactured by M/s. Shakti Pumps Ltd. was exempted under Notification No.6 of 2000 - in the present case Notification itself envisages that where such use is elsewhere then in the factory of production the procedure set out in Chapter X of the Central Excise Rules 1994 would be followed - Held that M/s. Shakti Pumps Ltd. was granted exemption under Notification No.6 of 2000 with respect to its product assessee herein would be covered within the requirement of Rule 57-CC of the Central Excise Rules - Appeal is dismissed

Summary

Issues:
1. Challenge to judgment of Customs Excise and Service Tax Appellate Tribunal
2. Interpretation of provisions of Rule 57-CC of Central Excise Rules, 1944
3. Application of exemption Notification No.6 of 2000
4. Requirement of following Chapter X procedure for remission of duty
5. Eligibility for refund of modvat credit

Analysis:

Issue 1:
The appellant challenged the judgment of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) regarding the clearance of goods without payment of duty based on certificates obtained by the purchaser.

Issue 2:
The main contention revolved around the interpretation of Rule 57-CC of the Central Excise Rules, 1944, which requires the payment of 8% duty on inputs used in exempted final products. The Tribunal upheld the application of this rule, leading to the rejection of the refund claim.

Issue 3:
The application of exemption Notification No.6 of 2000 was crucial in determining the eligibility for duty exemption. The goods sold were used in the manufacture of power-driven pumps, which were exempted under this notification.

Issue 4:
The requirement of following Chapter X procedure for remission of duty on goods used for special industrial purposes was debated. The appellant argued that the goods did not fall under this category, while the Revenue contended that the procedure under Chapter X was followed.

Issue 5:
The question of eligibility for the refund of modvat credit reversed at the rate of 8% was raised. The appellant sought a refund based on the argument that Rule 57-CC did not apply in this case, but the Court disagreed, emphasizing that the goods were covered by the exemption Notification.

In conclusion, the Court upheld the application of Rule 57-CC and the exemption Notification, thereby dismissing the appeal and ruling against the appellant's claim for a refund of modvat credit.