COMMISSIONER OF CENTRAL EXCISE Vs. PADMINI POLYMERS

JUDGEMENT

(1.) BY an order dated 26.05.2004 in a reference application preferred by the revenue, this court had directed the Central Excise Service Tax Appellate Tribunal (hereinafter referred to as the ,,Tribunal) to refer following question of law to this court :-

(2.) BEFORE we proceed further, it would be useful to refer to facts necessary for adjudication upon the question referred to us. These facts being as follows :-

(3.) MR. Kumar submitted that the Tribunal had erred in dismissing the appeal of the revenue in as much as it came to the conclusion that the condition prescribed in the exemption notification for keeping ,,separate inventory of finished goods which were chargeable to duty and those which were exempted from imposition of duty did not include separate storage. MR. Kumar submitted that the provisions of Rule 57 CC (9) obliged the respondent/assessee to store finished goods on which modvat had been claimed separately from those which were cleared by taking recourse to the exemption notification. It was submitted that this was also the understanding of the respondent/assessee which is demonstrable from the fact that during the search carried out at the respondent/assessees premises, the revenue obtained copies of undertaking filed by the respondent/assessee alongwith classification list and declarations, etc. whereby, it had been undertaken by the respondent/assessee that not only will it keep separate records of inputs but would also store those inputs separately, on which, it did not intend to claim modvat but was desirous of clearing the finished goods manufactured with the aid of such inputs by taking recourse to the exemption notification.