ORDER
K.D. Mankar, Member (T)
1. The present appeal relates to applicability of Rule 57CC of the Central Excise Rules, 1944. The appellants are seeking the refund of Rs. 32,640/-. The appellants are using duty paid inputs, and availing modvat credit on the said inputs in the manufacture of two kinds of finished goods, (i) Diesel Engines, which are being cleared by the appellants on payment of duty, and (ii) Couple sets, which are being cleared without payment of duty. While clearing the latter products without payment of excise duty, the appellants are required to reverse 8% of the value of the goods cleared without payment of duty as provided under Rule 57CC of the said rules. The appellant’s plea was that, the inputs are first used in diesel engines, which are captively used in the manufacture of couple sets. Since the inputs are first used only in the manufacture of diesel engine, and the said diesel engines are later used in the couple sets, the appellants claim that they are not required to reverse the said amount as duty paid inputs are used in the diesel oil engines and not in the exempted couple sets. The Assistant Commissioner held that, this plea was not maintainable for the reasons that, the diesel engine itself is again used in the manufacture of couple sets. The Assistant Commissioner placed reliance on the Boards Circular No. 224/58/96-CX dated 28/06/96 to hold that the couple set will be classifiable under heading No. 84.13 on the basis of principal function, as power driven pump.
2. The appellants had paid the amount and they subsequently claimed the refund, which was rejected by the Assistant Commissioner, and this rejection has been confirmed by the Commissioner (Appeals). Hence the appeal to the Tribunal.
3. Heard the DR.
4. Appellants are not present and have requested to decide the case on the basis of written submissions.
5. In the written submissions, Ld. Advocate had claimed that in respect of some other appeals involving similar issues the Tribunal has passed order accepting their submissions.
6. I note that, this submission is totally misleading. It is noticed that the inputs are used in manufacture of diesel engines. The diesel engines did not pay duty when these engines are used to manufacture the pump sets, because the latter paid duty. However, the same is not the situation, in respect of the diesel engines used in the manufacture of couple sets, which do not pay duty.
7. The appellants have taken a very ingenious argument to say that the use of inputs occurs first in the manufacture of diesel engines and therefore, it cannot be said that inputs have been used in the manufacture of exempted goods. It is true that the diesel engines do come into existence before, these are fitted into a couple sets, but what is cleared from the factory after using the inputs of diesel engine is a couple sets and the same being fully exempt the provisions of Rule 57CC are applicable and the consequence thereof requiring payment of amount equal to 8% of the finished goods value, have to follow. The appellant’s arguments that diesel engine comes into existence that and, therefore, the transaction should be terminated at the point of diesel engine is also, without basis. In that case also diesel engine, having not paid any excise duty, there is no escape from reversal of the 8% amount. Since no other alternative pleas have been made, I do not find any merits in the appeal.
8. The same is accordingly rejected
(Operative part pronounced in Court)