Customs, Excise and Gold Tribunal - Delhi
Indian Iron & Steel Co. Ltd. vs Commissioner Of Central Excise, Bolpur on 24 May, 2002
Equivalent citations: 2002ECR308(TRI.-DELHI), 2002(143)ELT442(TRI-DEL)
ORDER
K.K. Usha, J. (President)
1. The appellant is a manufacturer of iron and steel products. The challenge is against the order passed by the Commissioner of Central Excise, Bolpur, confirming demand of duty of Rs. 1,83,15,279/- and also imposition of personal penalty of an equivalent amount. They were issued two show cause notices alleging that as per the provisions contained under Rule 57CC they were liable to debit an amount equal to 8% of the value of the final products cleared at nil rate of duty from their Modvat account inasmuch as the inputs, on which credit was availed by them, were being used in the manufacture of dutiable as well as the nil rate of duty final products. The question that is referred for consideration of the Larger Bench is :-
"Whether the provisions of Rule 57CC are applicable to the by-products emerging during the course of manufacture of the intended final products and cleared at nil rate of duty or not."
2. The learned Counsel for the appellants relied on a decision of the West Zonal Bench in Arti Drugs Ltd., 2001 (133) E.L.T. 385 in support of his contention that the provisions of Rule 57CC of the Central Excise Rules do not apply to by-products. The Bench which originally heard this appeal was inclined to take a different view.
3. After hearing both the sides, it has come out that there was no definite finding entered by the Commissioner in this case as to whether burnt Dolomite, Coaltar and Ammonium Sulphate are by-products in the manufacturing process undertaken by the appellant. Apart from the above, Circular No. 591 /28/2001-CX., dated 16-10-2001 was brought to our notice which was not as a matter of fact placed before the Bench which originally heard the matter. The above circular clarifies as follows:-
"It follows from the provisions that if the manufacturer does not fulfil the requirements of either sub-rule (2) (i.e. maintaining separate accounts) or sub-rule (3) [i.e. paying 8% of total price of exempted goods, other than exceptions specified in Clause (a)] in terms of sub-rule (1) the assessee shall not be allowed credit on such quantity which is used in the manufacture of exempted goods. Consequently where the assessee has not paid the amount, the availment of corresponding credit on inputs is incorrect, the recovery of such credit taken is squarely covered by the provisions of Rule 12 (erstwhile Rule 57-1)."
The above circular had been applied by the Calcutta Bench in another decision in SAIL, Bokaro Steel Plant v. CCE, Jamshedpur - 2002 (142) E.L.T. 574 (Tribunal) = 2002 (50) RLT 80 (CEGAT - KOL.).
4. In the light of the above facts, it was agreed by both sides that this appeal could be disposed of with a direction to the Commissioner of Central Excise, Bolpur to proceed on the basis of Circular dated 16-10-2001. We, therefore, set aside the order impugned and remand the matter to the Commissioner for passing fresh order on the basis of Board's Circular No. 591/28/2001-CX., dated 16-10-2001.
5. The appeal stands disposed of as above.