Custom, Excise & Service Tax Tribunal
Rallies India Ltd vs Commissioner Of Central Excise, Salem on 19 March, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/876/05 (Arising out of Order-in-Original No. 21/2004(Commissioner) dated 23.12.2004 passed by Commissioner of Central Excise, Salem.) For approval and signature: Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K. Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Rallies India Ltd Appellant (Represented by: Ms Poornima.L, Advocate) Vs Commissioner of Central Excise, Salem Respondent (Represented by: Shri J. Singh, JDR) CORAM:
Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K. Gaule, Member (Technical) Date of Hearing : 18.03.2010 Date of Decision: 18.03.2010 ORDER NO..
Per: Mr P.G. Chacko
1. After examining the records and hearing both sides, we note that the short question arising for consideration in this case is whether the appellant is liable to pay 8% of the sale price (excluding tax) of the two exempted products, namely Phosphoryl A and B manufactured and cleared during the period of dispute (September 1996 to December 2003), under the erstwhile Rule 57CC of the Central Excise Rules, 1944 and Rule 6 (b) (ii) of the CENVAT Credit Rules, 2002. According to the Revenue, they are liable to pay the above amount inasmuch as they were manufacturing the aforesaid exempted goods as well as the dutiable product, namely gelatin and were availing MODVAT/CENVAT Credit on the common input used in both the streams of final products without maintaining any separate account or inventory in respect of such inputs. On the other hand, the assessee argued that they were not liable to pay any amount under the aforesaid rules inasmuch as the mother liquor which was generated in the course of processing of the raw material resulting in the manufacture of the dutiable product (gelatin) was not an exempted final product. This dispute has had a checkered history. When it ultimately reached a Larger Bench of this Tribunal, the outcome was in favour of the Revenue vide Rallis India Ltd vs Commissioner 2007 (208) ELT 25 (Tri-LB). The said decision has since been set aside by the Honble High Court, as per judgment dated 16.12.2008 in Writ Petition No 8435 of 2006. Their Lordships have held that, as mother liquor arising in the manufacture of gelatin is not an exempted final product, Rule 57CC was not applicable to the case. In the result, neither under Rule 57CC, nor under the equivalent provision of Rule 6 (b) (ii) of the CENVAT Credit Rules, 2002 is any amount recoverable from the appellant on the ground stated in the relevant show-cause notice.
2. Accordingly, the impugned order is set aside and this appeal is allowed.
(Pronounced and dictated in Court.) (S.K. Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) rk 2