Customs, Excise and Gold Tribunal - Mumbai
Alfa Laval (India) Ltd. vs Commissioner Of Central Excise, Pune-I on 5 September, 2001
JUDGMENT
Gowri Shankar, Member (Technical)
1. The applicant manufactures certain types of machinery. Among these are diary machinery and parts thereof on which the rate of duty is nil, and some other machinery which it cleared payment of duty to the Indian Navy in terms of an exemption notification. The applicant was therefore required in terms of Rule 57CC to pay an amount equal to 8% of the sale price of such goods. The applicant included in the price of the diary machinery and the goods sold to the Navy this 8%. The invoice included as an element of price an amount of "8% modvat reversal under 57CC".
2. This invited a notice from the department proposing to recover this amount in terms of Section 11D of the Act. The notice was confirmed by the Commissioner. The applicant is therefore required to deposit a sum of Rs. 22.90 lakhs and penalty of Rs. 5 lakhs in order to pursue the appeal that it has filed.
3. The contention of the counsel for the appellant that the amount to be deposited in 57CC is not in the nature of duty and the related contention that the applicant did not represent to its buyers that this represented duty have at this stage to be accepted. Rule 57CC does not describe the amount required to be deposited as duty. The Board has itself clarified through trade notice (70/96 dated 14.10.96 of the Mumbai I Commissioner, being an example) that the amount reversed under Rule 57CC "is not by way of payment of excise duty" and that the amount cannot be taken as credit by used of exempted goods. This amount is not identifiable as a duty in terms of provision of Central Excise Tariff Act. It has nothing to do with any rates of duty applicable to any of the headings in the tariff.
4. Further, the applicant has not in its invoice described the amount as representing duty. It had specifically used the words "modvat reversal under Rule 57CC". Prima facie therefore the amount does not represent duty to which the provision of Section 11D will apply.
5. Accordingly we waive deposit of the duty demanded and penalty imposed and stay their recovery.