ORDER
Gowri Shankar, Member (Technical)
1. The application by Deek Printers is for waiver of deposit of Rs. 66.88 lakhs demanded as sum payable in terms of Rule 57CC and a penalty of equal amount. The application by Gurangbhai Thakore, its partner is for waiver of deposit of penalty of Rs. 10 lakhs.
2. The demand follows consequent upon the finding of the adjudicating authority that the applicant did not reverse, as was required by Sub-rule (1) of Rule 57CC, the credit that it took of the duty paid of printing ink that it used in the manufacture of both exempted and dutiable cartons and labels. The counsel for the applicant does not deny that the basis for the claim but relies upon the decision of the Tribunal in Pushpam Forgings v. CCE 2002 (149) ELT 490 (an appeal by the Commissioner against which has been dismissed by the Supreme Court as reported in 2003 (153) ELT A18) in order to say that, since the amount in question is neither duty to which the provisions of Section 11A of the Act will apply, or modvat credit to which the provisions of Rule 57I will apply, there is no machinery provision in the Act for recovery of such an amount.
3. The departmental representative reiterates what the Commissioner has said, that the intention behind the rule was to provide for recovery of input credit used in the manufacture of exempted goods.
4. The question is not the one of intention but of translating that intention into statute. In the absence of a specific provision for recovering the amount in question, the mere intention of the legislature will not suffice. We note that the Board itself provided in its circular No. 591/28/2001-CX dated 16.10.2001 (reported in 2001 (133) ELT T32) that in such cases, as the present one, the credit taken of the duty paid on the inputs used in the manufacture of exempted product is required to be reversed. The counsel for the applicant says that the credit so taken liable to be reversed amounts to Rs. 5,06,591/-. We have however no means to verify whether this is correct, as this point has not been taken earlier. Accordingly, we think it appropriate to ask the applicant to revers a sum of Rs. 7.50 lakhs in its modvat account upon which we waive deposit of the sums demanded and penalty imposed on the assessee as well as the penalty imposed on its partner, and stay their recovery.
5. Compliance on 19.8.2003.