Central Excise - Forwarding of copy of the Instruction No. 3/92-C.E., dated 18-5-1992 regarding admissibility of Modvat on Sulphuric Acid used in the manufacture of detergent powder - Central Excise - 11/92

Central Excise - Forwarding of copy of the Instruction No. 3/92-C.E., dated 18-5-1992 regarding admissibility of Modvat on Sulphuric Acid used in the manufacture of detergent powder Circular No. 11/92 Dated 18-5-1992 [From F. No. 264/1/92-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Forwarding of copy of the Instruction No. 3/92-C.E., dated 18-5-1992 regarding admissibility of Modvat on Sulphuric Acid used in the manufacture of detergent powder. I am directed to forward herewith a copy of Board's instruction No. 3/92-CX.8, dated 18-5-1992 on the above subject for information and record. The receipt of this may please be acknowledged. Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Section 378/Instruction No. 3/92, dated 18-5-1992 Several manufacturers of detergent powder have represented against the existing instructions of the Board with regard to the admissibility of Modvat credit on Sulphuric Acid used in the manufacture of detergent powder. Modvat credit is allowed only on the quantity of concentrated sulphuric acid actually consumed in the manufacture of detergent powder. The credit of duty of inputs contained in the 'Spent Acid' is to be reversed by deducting the duty equivalent of 'Spent Acid' from the duty paid on concentrated sulphuric acid or oleum initially charged. 2. Collactors of Central Excise have also felt that these instructions require re-consideration. In the manufacture of detergent powder, concentrated sulphuric acid is used as one of the raw materials and the entire quantity of concentrated sulphuric acid used is physically involved in the manufacturing process, although some portion remains and is separated by adding water which results in 'Spent Acid'. It is observed that the concentrated sulphuric acid has to be used in excess quantity, so as to get the desired quality of the product. In other words, the entire quantity of concentrated sulphuric acid is actually used in the manufacture of acid slurry/detergent powder. The Board have re-examined the whole issue, keeping in view these facts. 3. And, in exercise of the powers conferred under Section 378 of the Central Excises and Salt Act, 1944 (1 of 1944), for the purpose of ensuring uniformity, the CBEC hereby orders that Modvat credit can be taken on the full quantity of sulphuric acid used in the manufacture of detergents. Consequently, 'Spent Acid' classifiable under the same heading as that of concentrated sulphuric acid (i.e. 2807) by virtue of Note 1 (b) of Chapter 28, must be cleared on payment of duty under Rule 57F (4) (a), unless otherwise exempted from payment of duty. All existing instructions issued vide Circular No. 33/88-CX.8 reiterated vide Circular No. 10/89-CX.8 and 23/91-CX.8 on this issue are hereby rescinded. The Board further directs that a copy of this instruction be sent to all Principal Collectors of Central Excise and Collactors of Central Excise, for being observed as followed and for being made available as required to all other persons employed in the execution of the Central Excises and Salt Act, 1944, and for issue of Trade Notices.