TMI Blog2004 (12) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... mlesh Kumar, SDR appearing for the revenue and Shri Vipin Kumar Jain, CA appearing for the appellant. It is seen that the Tribunal in the case of Jindal Polymers [2001 (135) E.L.T. 657 (Tribunal) = 2001 (43) RLT 680 (Tri. - Delhi), has followed the earlier order of the Tribunal in the case of Bajaj Tempo and has held that a job worker, who has received the goods from the manufacturer under Rule 57F, is entitled to take credit of duty in respect of the other inputs received directly and used by him in the manufacture of the said goods on job work basis. The main reason for arriving at this conclusion was of two fold. First that Rule 57F is a self-contained provision and the goods processed under the said rule were being returned to the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not to destroy the basic concept. 2. The revenue is denying the Modvat credit to the present job worker on the grounds that the inputs were used in the manufacture of the goods which were cleared without payment of duty. Pausing here for a second, let us take a situation where the basic inputs is sent by the principal manufacturer after debiting the Modvat credit taken by him. The job worker takes the credit of the same his factory, utilises other inputs procured directly by him after taking the Modvat credit on the same and clear the processed goods to the principal manufacturer on payment of duty and the principal manufacturer takes the credit of the same in his factory and utilises such credit for payment of duty on his final produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable to nil rate of duty. Expression chargeable to nil rate of duty or exempted from whole of duty was considered by the Tribunal in the case of Orissa Synthetics Ltd. v. Collector of Central Ex. [1995 (77) E.L.T. 350 (Tri.)] and after taking note of the Ministries clarifications issued vide Circular No. 10/75/CX. 6, it was held that clearance under goods under provision of 191BB for export without payment of duty would not get covered by the above expression. Reference was made to the advice received from the Ministry of Law dealt in the paragraph of 9 in the said decision. It was opined in the said letter of the Law Ministry that the term 'exempted' has a definite connotation. The same as attributed to the notification issued by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty by observing that since no duty was paid on the part at the time of clearance, Rule 57C will apply and no Modvat credit would be admissible. However, the said decision was subsequently reversed by the Supreme Court as reported in Escort v. C.C.Ex. [2004 (171) E.L.T. 145 (S.C.)]. For appreciation, we reproduce paragraphs 8 9 of the said decision. "8. It is to be seen that the whole purpose of the Notification and the Rules is to streamlines the process of payment of duty and to prevent the cascading effect if duty is levied both on the inputs and the finished goods. Rule 57D(2), which has been extracted hereinabove, shows that in the manufacture of a final product an intermediate product may also come into existence. Thus in cases wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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