CCE, AHMEDABAD Vs. CADITRONICS PVT. LTD.

JUDGEMENT

(1.) CADITRONICS Pvt. Ltd., the respondent to this appeal, was engaged in the manufacture of date (sic) processing machines and units thereof. It cleared some part of these inputs for home consumption. White doing so, it paid on them duty at 15% ad valorem i.e. this was the rate of duty which had been applied to them by their manufacturer, when they were cleared after manufacture. Notice issued to the assessee proposed that the duty payable on these goods are 25% ad valorem for the reason that this was the rate of duty applicable to the goods if manufactured and cleared. It proceeded on the footing that clause (1) of rule 57F provided that inputs on which credit had been taken has been removed from the factory for home consumption for export on payment of appropriate duty "as if such inputs have been manufactured in the said factory." Therefore, it is the rate of duty applicable to the goods, if they had been manufactured i.e. 25% ad valorem that would apply. Adjudicating on the notice, the Assistant Commissioner confirmed this proposal and demanded differential duty. On appeal from this order, the Commissioner (Appeals) was of the view that it was not appropriate for the goods to be reclassified, or to be subjected to a different rate of duty from the rate that was applied to them by their manufacturer. The deeming fiction contained in clause (2) of rule 57F(2) was only to regulate the clearance of inputs to ensure recovery of the duty taken as credit and would not extend to considering the recipient of the input to be its actual manufacture of the goods. The action of the appellant before him in repaying the credit that it was sufficient compliance with the provisions of the rule. On this reasoning, and relying on the decisions of the Tribunal in Hindustan Lever Ltd. v. CCE : 1990 (47) ELT 646 :, 1990 (28) ECR 506 and in Rock Stone Industries v. CCE, 1995 (77) ELT 349 :, 1995 (58) (ECR) 456 (T), he allowed the appeal. It is this finding that is questioned by the Commissioner in this appeal.