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2013 (8) TMI 772 - SC - Central ExciseMODVAT credit - Interpretation of the Notification No. 58/97-CE - During MODVAT verification it was found that the supplier of inputs had not discharged full duty liability for the period covered by the invoices - Whether the manufacturer of final products was entitled to deemed credit, under Notification 58/97-CE dated 30.8.97 when the manufacturer-supplier of inputs had not paid Central Excise Duty and given a wrong certificate on the body of invoices about duty dischargement under Rule 96ZP of Central Excise Rules, 1944 - Held that:- One had to assume that the importer of polyvinyl alcohol had actually manufactured the same in India - One can further assume, possibly without any difficulty, that the said polyvinyl alcohol had been manufactured from vinyl acetate monomer, but it was not possible to assume or presume or imagine that the raw material used was the one on which appropriate amount of duty of excise had been paid in India and hence, the condition which was contained in the said notification had to be fulfilled in order to get the benefit of the notification. The notification clearly states to which of those inputs it shall apply and to which of the inputs it shall not apply and what is the duty of the manufacturer of final inputs. Thus, when there is a prescribed procedure and that has been duly followed by the manufacturer of final products, we do not perceive any justifiable reason to hold that the assessee-appellant had not taken reasonable care as prescribed in the notification. Due care and caution was taken by the respondent. It is not stated what further care and caution could have been taken. The proviso postulates and requires “reasonable care” and not verification from the department whether the duty stands paid by the manufacturer-seller - When all the conditions precedent had been satisfied, to require the assessee to find out from the departmental authorities about the payment of excise duty on the inputs used in the final product which have been made allowable by the notification would be travelling beyond the notification, and in a way, transgressing the same - This would be practically impossible and would lead to transactions getting delayed – Decided against the revenue.
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