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2007 (9) TMI 354 - HIGH COURT OF KARNATAKACenvat Credit-Input used by job worker- The appellants had filed for the disallowance of Modvat credit was on the ground that appellants had not followed the procedure under Rule 57F(2) of the CE Rules. Since the lacquer had not been brought into the appellants factory but, were utilised by the job worker for lacquering polyester film, the appellants claimed Modvat credit of duty paid on the said lacquers. Further it was of the view that the lacquered polyester film received back from the job worker, did not subject to any process amounting to manufacture and also proceeded to hold that cutting to required size did not amount to manufacture and the procedure adopted by the appellants was in contravention of Rule 57F(3)(b) of the Rules and Modvat credit availed by them was required to be reversed for the period 27-8-1991 to 30-6-1992. In the light of the decision in the case of International Auto Ltd. v. CCE, Bihar, in which held that- the Scheme of Modvat permits the person who clears the ultimate final product to take the benefit of the Modvat scheme at the time of clearance of such final product. The manufacturer of the final product would therefore, be entitled not only to adjust the credit on the inputs supplied by it to the intermediate purchaser but also to the credit for the duty paid by the intermediate purchaser on its products, held that- Accordingly, we answer the questions referred to us in favour of the petitioner-assessee.
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