9911796707
TMI Blog2006 (7) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of submersible pumps (water pumps) which were exempt from payment of duty under Notification No. 4/97-C.E. dated 1-3-97. These pumps were manufactured from rough castings which were manufactured out of pig iron and foundry chemicals (inputs). About 80% of the rough castings production was cleared for home consumption on payment of duty and the rest was captively consumed in the manufacture of pumps. The assessee was not maintaining separate accounts in respect of inputs used in the manufacture of rough castings cleared on payment of duty and those used in the manufacture of rough castings captively consumed in the manufacture of pumps which were cleared without payment of duty in terms of the above Notification. A dispute arose betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y used and the remaining sold in the market. The captively consumed castings are exempt from duty. Issue has arisen as to what is the action required to be taken in respect of the credits taken on the inputs used in the production of captively consumed castings. The appellant was making payment at the rate of 8% of the value of the Castings in terms of Rule 57CC. Under the impugned order, it has been ordered that since the Castings are used in the manufacture of PD Pumps, 8% of the value of the PD Pumps should be the amount required to be reversed. 2. Even though the matter is posted today for consideration of the stay applications, after hearing both the parties, we find that this issue remains covered by the decision of this Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo amounts was Rs. 11,06,343/-, which was taken as Modvat credit on 6-11-96 and this credit was utilized by them on the strength of permission granted by the jurisdictional Assistant Commissioner. All this was before the issue of the show cause notice. On the above facts, learned Commissioner (Appeals) observed, in the impugned order, that the above credit-taking would be subject to the time-bar provisions of Section 11B. It is this part of the order of the Commissioner (Appeals) that is under challenge in the assessee s appeal. Any decision in the assessee s appeal will necessarily depend on the results of the Revenue s appeal. 4. After hearing both sides in the Revenue s appeal and considering the submissions, we find that the factual s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-rule (2) of this rule are complied with, pay an amount equal to eight per cent of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charged by the manufacturer for the sale of such goods at the time of their clearances from the factory by adjustment in the credit account maintained under sub-rule (3) of Rule 57G or in the accounts maintained under Rule 9 or sub-rule (1) of Rule 173G or if such adjustment is not possible for any reason, by cash recovery from the manufacturer availing of the credit under Rule 57A. The above rule envisages a situation in which a manufacturer manufactures, out of common inputs, two categories of final products, one dutiable and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manufacture of the final product (pumps) were only an intermediate product. Such intermediate product can hardly qualify as final product for purpose of Rule 57CC. It would, therefore, appear that the department correctly treated the pumps to be the final product of the second category contemplated under Rule 57CC. Both sides agree that the facts of the case of PSG Industrial Institute are identical to the facts stated above. However, in the said case, the castings captively used in the manufacture of pumps were treated as the exempted final product under Rule 57CC. With great respect, we disagree. This conflict requires to be resolved by a Larger Bench. 5. In keeping with judicial discipline, we direct the Registry to place th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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