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TMI Blog2018 (8) TMI 1670X X X X Extracts X X X X X X X X Extracts X X X X ..... hloroquine phosphate’ is an exempted goods and that in the manufacture of those, and other dutiable goods, the appellant has utilized common inputs taking credit thereof, without distinguishing between utilization on exempted goods and on dutiable goods, the liability under rule 57AD of Central Excise Rules, 1944 cannot be avoided. The appellant has claimed that duty liability has been discharged on both ‘chloroquine phosphate’ and ‘bulaquine’ by adopting a value which takes into account both these products. If that is so, the duty discharged on ‘chloroquine phosphate’ is liable to be set off against liability under rule 57AD owing to the exempt nature of the ‘chloroquine phosphate’. That is an aspect that needs to be ascertained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te pack. Accordingly, they had claimed CENVAT credit on the input used in common for manufacture of both which was sought to be denied in show cause notice dated 14th January 2003 as the prescriptions of rule 57AD permitted the availment of such credit conditional upon discharge of liability @ 8% on the value of the exempted product on which, otherwise, the CENVAT credit could not have been availed. 3. Learned Chartered Accountant submits that they had filed the classification list for the relevant period under rule 173B of Central Excise Rules, 1944 and the duty liability had been discharged at 16% of the total value of the composite pack. It was further argued that the order-in-original was in their favour and that, on appeal of Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the goods being packed together amounted to manufacture. Furthermore, it is his contention that composite pack has a specific connotation which does not apply to the claim of the appellant. Relying upon rule 122E of Drugs and Cosmetic Rules, 1945, he contended that both the chloroquine phosphate and bulaquine are separate drugs and a new drug or method of selling under a different name which required appropriate licence from the competent authority under the said Rules which has not been produced in relation to aablaquin . He placed reliance on the decision of the Hon ble High Court of Karnataka in Davangere Cotton Mills Limited v. Union of India and Others [1986 (24) ELT 507 (Kar.)]. 6. The issue in dispute, though argued o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of those, and other dutiable goods, the appellant has utilized common inputs taking credit thereof, without distinguishing between utilization on exempted goods and on dutiable goods, the liability under rule 57AD of Central Excise Rules, 1944 cannot be avoided. 8. The appellant has claimed that duty liability has been discharged on both chloroquine phosphate and bulaquine by adopting a value which takes into account both these products. If that is so, the duty discharged on chloroquine phosphate is liable to be set off against liability under rule 57AD owing to the exempt nature of the chloroquine phosphate . That is an aspect that needs to be ascertained by the lower authorities. 9. The remand order of the first a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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