9911796707
TMI Blog2006 (12) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... el Oil Engine. There is no dispute in respect of such clearances. However, a part of the said engines are being used captively by the appellant in the manufacture of centrifugal pump sets commonly known as couple sets . Such couple sets consist of diesel engine manufactured by the appellant and the Centrifugal pump procured by them on payment of duty. 2. Since the final product i.e. couple sets are exempted from payment of duty, diesel engine used in the manufacture of the same were required to discharge duty liability. However, Revenue took a view that such diesel engine consumed captively are not dutiable and are exempted and the appellants are required to reverse 8% of the value of said diesel engine, in terms of the provisions of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e required to discharge duty liability and were not exempted so as to invoke Rule 57CC. However it is seen that the appellants have not paid Central Excise duty leviable thereon, in view of the Revenue s insistence that 8% amount has to be debited. As such, the fact remains that duty on the said captively, consumed diesel engine has not been paid. As such, while granting refund of 8% duty amount, the duty liability in respect of the diesel engine has to be adjusted against the same. Ld. Advocate has submitted that there was no such proposal in the show cause notice to confirm duty against them and the same is not on issue in the present matter. However, we find that in identical situation, in the case of Sudhir Engineering Company v. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant would have to reverse back the credit, as a consequence of the same. The revenue could not have raised the demand on repaired DG Sets as also for reversal of Modvat credit at the same time. Admittedly, when the activity is being held as not amounting to manufacture with no duty liability. The appellant cannot avail the credit of duty paid on the new engines/alternators in terms of rule 57C. As such, we hold that the appellants would reverse the credit on the engines and alternators used for the repair of DG Sets . 6. In the present case also the Revenue could not have demanded duty on the diesel engine, inasmuch as, they themselves were holding a view that the engines were exempted, whereas on the other hand, the appellants wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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