Customs, Excise and Gold Tribunal - Bangalore
Indian Railways (Wheel And Axle Plant) vs Cce on 6 August, 2004
Equivalent citations: 2004(116)ECR733(TRI.-BANGALORE)
ORDER K.C. Mamgain, Member (T)
1. Heard both the sides.
2. Shri Ravisankar, Ld. Advocate appearing for the appellants pleaded that the appellant is a wing of Indian Railways, Ministry of Railways, Govt. of India. The appellant manufactures Wheel Sets, Wheels and Axles for use in Railways. The appellant unit caters to the needs of various workshops and factories of the Indian Railways which are located at different Railways Zones. The goods manufactured by the appellant are supplied on stock transfer basis for use in the factory/workshop of the Railways to make other excisable goods which are used by the Indian Railways for operating the railways network in India. About 98% of their supplies are made only to the Indian Railways' factories/workshops and about 2% of the goods manufactured are sold to some other concerns. The goods manufactured by them and used by Railway factories/workshops are exempted from duty of excise in terms of exemption Notification No. 62/95-CE dated 16.3.1995. This exemption is not available to the sale made to the other parties which are not a part of the Indian Railways. Since the appellants are selling about 2% of the goods to other parties on payment of duty, they availed benefit of Modvat/Cenvat credit from 1.7.1995 on the inputs. They are not maintaining separate account of inputs used in dutiable and exempted goods. According to Rule 57CC of the Central Excise Rules, 1944 and Rule 57AD of the amended Rules 2001, a manufacturer manufacturing both exempted excisable goods and dutiable excisable goods and taking Modvat/Cenvat credit on inputs used for both the categories of final products without maintaining separate account for such input, is required to pay an amount equal to 8% of the price excluding sales tax and other taxes on clearance of exempted goods. The appellants during the period from 2/97 to 3/2001 cleared Wheels, Axles and Wheel Sets to Indian Railways without paying an amount equal to 8% of the price as required under Rule 57CC/57AD of the Central Excise Rules, 1944. Ld. Advocate pleaded that the identical issue in case of the present appellants has already been decided by the Tribunal in Final Order No. 9999/2003 dated 4.8.2003 2003 (161) ELT 843 allowing the appeal of the appellants. He pleaded that the appellants were not selling their goods cleared to their other factories as one cannot sell the goods to himself but they were only transferring the goods to the different workshops. Therefore, provisions of Rule 57CC are not applicable for such transfer. Further he pleaded that in view of the Tribunal decision in case of Pushpaman Forgings v. Commissioner 2002 (149) ELT 490 (Tribunal) which has been upheld by the Apex Court as reported in 2003 (153) ELT A89 (SC), amount sought to be recovered being neither duty nor Modvat credit and no recovery proceedings machinery provided the Act and Rules, such amount cannot be recovered.
3. Shri P.M. Saleem, Ld. SDR appearing for the Revenue pleaded that the appellant's unit although belongs to Indian Railways and clears its goods to the other unit of the Indian Railways, but for the purpose of Central Excise registration and payment of duty, each factory is considered as an independent unit even though it may be owned by one Organisation. Therefore, when the goods are cleared from the Wheel & Axle Plants, they were required to be cleared after payment of 8% of the value of the goods in terms of Rule 57CC. He also pleaded that value of the goods can be determined even though it may not be a sale to the other units as the goods are cleared on invoices from the factory to the other units and value can always be determined either under Rule 6(b)(i) or Rule 6(b)(ii) of the Central Excise Valuation Rules. He, however, accepted that in view of the decision of the Tribunal in case of Pushpaman Forgings referred to above by Ld. Advocate, since there was no machinery for recovery of amount of 8%, he has no objection if the appeals are allowed, as the said decision has been upheld by the Apex Court.
4. We have carefully considered the submissions made by both he sides. We find that the Tribunal has already decided the issue involved here in case of the appellants as . In this decision the Tribunal has observed that since Rule 57CC prescribes reversal of an amount and not of Modvat credit availed or of duty; no machinery provision exist under the Rules for reversal of the amounts required under Rule 57CC, the reversal as ordered under Rule 57-1 or Section 11A cannot be upheld. We also find that in case of Pushpaman Forgings (supra), the Tribunal has given the similar finding and it was upheld by the Supreme Court. We accordingly are of the view that the present case is fully covered by this decision and the department cannot recover the amount under Rule 57I/57AH of the erstwhile Central Excise Rules or Section 11A of the Central Excise Act, 1944. Accordingly we set aside the order of the Commissioner and allow the appeals.
(Operative portion of the order has been pronounced in the court on conclusion of the hearing on 6.8.2004)