9911796707
TMI Blog1988 (12) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... ularly. He also imposed a penalty of Rs. 5,000/- on the appellants under Rule 173Q of the Central Excise Rules. 2. The facts in brief are that the appellants manufactured steel ingots with the aid of electric induction furnace. They also manufactured other articles viz. runners and risers. The raw material for manufacture of these goods, among others, is steel scrap. They filed a declaration on 5.6.1986 opting for Modvat facility in respect of steel scrap as an input for their final product. The Central Excise Officers on a visit to the appellants' factory on 16-1-1987 noticed that a quantity of 2685.895 MT of steel scrap had been taken for manufacture of steel ingots, runners and risers and the quantity of final product obtained was 2206. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants had availed deemed credit on this scrap. The learned counsel further submitted that sub-rule (3)(1) of Rule 57F as amended by Notification No. 197/86, dated 14-3-1986 provides for utilisation of the credit of the specified duty allowed in respect of any inputs, towards payment of duty on any of the final products in or in relation to the manufacture of which such inputs are intended to be used in accordance with the declaration filed under Rule 57G. He emphasised that the appellants are entitled to .......……entire credit of duty taken on the M.S. scrap received from 5.6.1986 to 28.8 1986 payment of duty on the final products viz. M.S. ingots which are the only final products manufactured by them. He also pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57G. The appellants' case is that they have in fact, utilised the credit earned by them on the input scrap only on the single final product that they manufactured viz. steel ingots and that the provisions of Rule 57F(3) as above do not bar such utilisation when admittedly there is no one-to-one correlation between the input and output under the Modvat scheme. Examining this issue, it is observed that what Rule 57F(3) provides is that the credit of duty allowed in respect of any input can be utilised towards payment of duty on any of the final product in or in relation to the manufacture of which such inputs are used. A plain reading of the Rule, when considered in the background of the objective of the Modvat scheme, viz., to provide instan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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