TOPLAND ENGINES PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) THE only issue that arises in this petition is as to whether the respondents, more particularly respondent No. 3, is entitled to go behind an order of the Tribunal and refuse to implement it by issuing the impugned show cause notice bearing F. No. V84 (18) -1236/2004 -Ref., dated 3rd February, 2005 (Annexure 'H').

(2.) THE petitioner, a Private Limited Company, manufactures Diesel Engines which are admittedly classified under Heading 84.08 of the Central Excise Tariff Act. The Engines are cleared for home consumption on payment of excise duty. The Engines are also removed for captive consumption for manufacturing Centrifugal Pumps commonly described as couple sets. The Excise Department took a view that the Diesel Engine, when cleared for captive consumption, was not chargeable to duty in view of the Notification No. 4/97 -C.E., and Notification No. 5/98 -C.E. as well as similar Notifications issued from time to time in each financial year and therefore, since the final product, namely, the Diesel Engine was both exempt as well as chargeable to duty, the petitioner was required to pay 8% of the selling price under Rule 57CC of the Central Excise Rules, 1944. This finding was recorded in light of the fact that all Diesel Engines were manufactured out of common inputs. The matter was carried further and the Commissioner (Appeals) allowed the appeals holding that Rule 57CC of the Rules is not applicable and the petitioner was entitled to refund of 8% paid under Rule 57CC of the Rules.

(3.) THE petitioner objected to this vide communication dated 10 -12 -2004 informing that only a book entry was required to be made and nothing further was necessary. Thereafter, the petitioner was served with the impugned show cause notice dated 3rd February, 2005 (Annexure 'H').