2009 (12) TMI 442 - HC - Central Excise

Cenvat/Modvat- ). The Division Bench of this Court has held that simultaneous manufacture of dutiable and exempted goods out of the common modvatted/cenvatted inputs is the first and foremost condition for demanding the amount for the contraventions of Rule 57CC and Rule 57AD of the erstwhile Central Excise Rules, 1944 (for brevity, the 1944 Rules ) or Rule 6 of the Cenvat Credit Rules. Held that dealer respondent manufactured excisable goods on job work basis out of canvatted inputs supplied by principle. Goods not found to be exempted. Provisions of Rule 57CC and Rule 57AD or Rule 6(3) not applicable. Proposition neither seriously disputed nor controverted by counsel

Summary

Issues:
1. Interpretation of conditions for demanding amounts under Rule 57CC and Rule 57AD of the Central Excise Rules.
2. Application of Rule 6 of the Cenvat Credit Rules.
3. Manufacturing of dutiable and exempted goods from common inputs.
4. Applicability of rules to goods manufactured on job work basis.

Analysis:
The judgment pertains to an appeal challenging an order passed by the Customs, Excise and Services Tax Appellate Tribunal, New Delhi. The issue raised in the appeal was whether the conditions for demanding amounts under Rule 57CC and Rule 57AD of the Central Excise Rules were satisfied. The respondent had manufactured excisable goods on a job work basis using cenvatted inputs or partially processed inputs. The court referred to a Division Bench judgment which emphasized that simultaneous manufacture of dutiable and exempted goods from common inputs is a prerequisite for demanding amounts for contraventions of the rules. Since the goods manufactured were not found to be exempted but dutiable, the provisions of the rules in question were deemed inapplicable.

The court noted that the appellant did not seriously dispute or controvert the proposition that the conditions for demanding amounts under the rules were not met in this case. Consequently, the court held that the appeal failed and dismissed it. The judgment underscores the importance of simultaneous manufacture of dutiable and exempted goods from common inputs as a key factor in determining the applicability of rules related to the taxation of goods manufactured using cenvatted inputs. The decision provides clarity on the interpretation and application of the relevant rules in cases involving the manufacturing of goods on a job work basis using specified inputs.