Kesar Enterprises Ltd. vs Cce on 26 November, 2002
6. We have carefully considered the submissions made by both the sides. We find that the issue to be considered in this case is whether the appellants are required to reverse actual amount of Modvat/Cenvat credit availed on the Molasses used for manufacture of rectified spirit consumed by them in their liquor manufacturing section for manufacture of Indian Made Liquor (IML) or can the appellants reverse 8% of the value of rectified spirit as provided under Rule 57CC. Molasses is used by the appellants for manufacture of rectified spirit which is exempted from duty and also dutiable product, i.e. Alcohols. Since they are using molasses as common input, they availed Modvat/Cenvat credit on molasses and reversed 8% of the price of the rectified spirit cleared as such and consumed in their distillery for manufacture of IML. The department's claim is that since the IML is a non-excisable product which is manufactured from rectified spirit used in their distillery and Modvat / Cenvat credit is availed for molasses, therefore, the appellants are not entitled for the benefit under Rule 57CC / 57 AD as that procedure is applicable only to manufacture of products which are excisable. Therefore instead of reversing 8% price of final product, i.e. rectified spirit, the appellants are required to reverse the entire credit taken on the molasses which has gone into rectified spirit which is in turn used in the manufacture of IML. We find that the issue has already been decided by the Tribunal in case of Kesar Enterprise Ltd. (supra) wherein it was decided that the appellants are entitled to avail Modvat credit on the molasses and they were liable to pay amount @ 8% of the value of rectified spirit being cleared for manufacture of IML in terms of Rule 57 CC of the Central Excise Rules.