GREAVES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are manufacturers of EOT cranes (Heading 84.26 of the CETA Schedule). This product attracted duty at the rate of 13% ad valorem at the material time. They had cleared one EOT crane under invoices dated 24.03.1998 to SHAR in Andhra Pradesh without payment of duty under Notification No. 10/97 -CE dated 01.03.1997 and reversed input duty credit of Rs. 96,218/ - taken in relation thereto. The original authority and the first appellate authority demanded, under Rule 57CC of the Central Excise Rules, 1944, from them 8% of the price of goods shown in the said invoices. The original authority imposed a penalty also, which was vacated by the appellate authority. The present appeal is against the demand of 8% of the price of the goods cleared by the appellants without payment of duty, to SHAR.

(2.) THERE is no representation for the appellants despite notice, nor any request of theirs for adjournment. Learned SDR reiterates the findings of the lower authorities.

(3.) AFTER considering the grounds of the appeal, and the submissions of learned SDR, we have no reason to sustain the impugned order. Rule 57CC ibid as applicable to the date of clearance of the subject goods reads as follows: Where a manufacturer is engaged in the manufacture of any final product which is chargeable to duty as well as in any other final product which is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty and the manufacturer takes credit of these specified duty on any inputs (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products whether directly or indirectly or and whether contained in the said final products or not, the manufacturer shall, unless the provisions of Sub -rule 9 are complied with, pay an amount equal to 8 per cent of the price (excluding sales tax and other taxes if any, payable on such goods) of the second category of final products charged by the manufacturer for the sale of such goods at the time of their clearance from the factory. The case of the appellants is that a final product which is chargeable to duty but which could also be cleared without payment of duty under certain circumstances or on the fulfilment of certain conditions under the provisions of an exemption Notification can hardly be treated as "any other final product" as clearance under an exemption Notification cannot render the product different from the same product cleared on payment of duty. This case of the appellants is in keeping with the provisions of Rule 57CC. This Rule would apply to a manufacturer who was engaged in the manufacture of a final product which was chargeable to duty and any other final product which was exempt from the whole of duty of excise leviable thereof or was chargeable to 'nil' rate of duty. In the present case, the appellants were clearing EOT cranes on payment of duty to buyers other than SHAR at the material time. Only clearances of the product to SHAR were exempt from payment of duty under Notification. The product remained the same. In such a situation, Rule 57CC did not apply. It is also on record that the above clearance of goods to SHAR was effected without availing input duty credit. Apparently, such credit taken earlier was reversed subsequently. The conduct of the party was not prejudicial to the Revenue.