COMMISSIONER OF C. EX. Vs. VARDHAMAN EXPORTS

JUDGEMENT

(1.) THE Revenue is in appeal against the impugned order wherein the learned Commissioner (Appeals) set aside the adjudication order demanding 8% of the value of clearance of the exempted goods. The brief facts of the case are that a demand of Rs. 16,07,955/ - with interest and penalty of Rs. 3,00,000/ - was confirmed against the respondent by the adjudicating authority on the ground that the goods manufactured by the respondent were exempted from payment of duty under Notifications 8/96, 4/97 and 5/98. Although the goods were exempted by the above said Notifications, but the respondent paid duty on the said goods @ 15%. It was held in the adjudication order that the exempted goods were manufactured from the common inputs on which Cenvat credit has been taken, therefore the respondent is required to reverse the value of 8% of the exempted goods cleared during the impugned period. The said order was challenged by the respondent before the Commissioner (Appeals) who set aside the adjudication order. Aggrieved by the said order, the Revenue is before me.

(2.) THE learned AR submits that as the goods manufactured by the respondent were exempted under Section 5A(1) of the Central Excise Act, 1944 from whole of the duty, therefore the goods manufactured by the respondent are exempted goods and they were not required to pay duty on those goods and the same has been manufactured from the common inputs, therefore required to pay 8% of the value of the goods as per Rule 57CC of the Central Excise Rules, 1944.