J.K. PAPER LIMITED Vs. CCE

JUDGEMENT

(1.) THE appellant is a manufacturer of paper. It takes Modvat credit in respect of inputs used in such manufacture. Pulp emerges at the intermediate stage in the manufacture of paper. The appellant cleared a small portion of that pulp by way of sale or otherwise, while most of the pulp was captively used in the manufacture of paper. The appellant was keeping separate accounts of inputs used in the manufacture of captively consumed pulp and the pulp which is sold. The quantity of inputs used in both the uses was being worked out on the basis of input -output norm. There was no use wise (sic) separate storage of inputs. Under the impugned order, the appellant has been directed to pay 8% of the value of the pulp sold in terms of Rule 57CC of the Central Excise Rules. This rule is applicable to cases where no separate inventory is kept in respect of inputs used in dutiable and non -dutiable goods.

(2.) THE contention of the learned Counsel for the appellant is that the Commissioner was not right in holding that the appellant was not keeping separate inventory, merely for the reason that the inputs for both the uses were stored in a common storage tank. It has been submitted that this position remains settled by the decision of this Tribunal in the case of CCE, New Delhi v. Padmini Polymers, 2003 (87) ECC 300 (T) : : 2003 (151) ELT 358. Learned Counsel has also brought to our notice a subsequent order of the Commissioner (Appeals) [Order -in -Appeal No. 132/BBSR -I/04 dated 23.4.04] wherein the Commissioner (Appeals) dropped the demand raised against the appellant for identical reasons for subsequent period. We have perused the records and heard the learned SDR also. On the requirement for keeping separate inventory, this Tribunal noted as under in the case of CCE, New Delhi v. Padmini Polymers: