TMI Blog1998 (1) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... tower parts. During the process of galvanisation; there is generation of 5% of zinc as zinc ash and zinc dross; which is classifiable under Heading 26.20 of the Central Excise Tariff Act. The appellants claimed exemption for the zinc dross under Notification No. 19/88. The Jurisdictional Assistant Commissioner of Central Excise initiated proceedings against the appellant by issue of Show Cause Notices alleged that the appellant have contravened the Rule 57C of the Central Excise Rules, 1944; they had not reversed the credit to the extent of 5% of the zinc obtained as zinc ash and zinc dross on which they had claimed nil rate of duty under Notification 19/88. The Assistant Commissioner after considering their defence confirmed the demand ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption and the Tribunal held that Modvat credit is protected under Rule 57D. Reliance was placed on the Tribunal decision in the case of Collector of Central Excise v. Indian Aluminium Co. Ltd. - 1992 (59) E.L.T. 168 (Tribunal) holding that Rule 57D(2) carves out an exception to Rule 57C and in the case of intermediate goods used in the manufacture of the final products exempted from the payment of duty; Modvat credit could not be denied. 3. Shri S.V. Singh, the ld. JDR contended that a perusal of the Show Cause Notice shows that what is sought to be done by the Show Cause Notice is reversal of Modvat credit taken on the duty on zinc in respect of clearance of zinc dross and zinc ash. He also referred to and reiterated the reasoning in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availment of Modvat credit. In such a situation the Tribunal held that Rule 57D would come into play and credit initially taken on PVC compound would not call for variation. In the present case also admittedly zinc dross and zinc ash arose during the manufacture of declared final product and exemption of zinc dross and zinc ash, at the material time, was unconditional and the condition later brought in by amending notification is clearly not retrospective. There is nothing in the amending notification to show such intention on the part of the authorities issuing the notification. In such situation the ratio of the decision of the Tribunal would clearly become applicable to the facts of the present case, and applying that ratio we hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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