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TMI Blog2009 (7) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... the intermediate product (intermediate inputs) cannot be denied by applying Rule 57C of the C. Ex. Rules, 1944, in respect of removal of inputs from one factory to another under the provisions of Notification No. 217/86-C.E., as amended by Notification No. 97/89-C.E. by following Chapter X procedure of the C. Ex. Rules, under which payment of duty on the ultimate final products is ensured. (ii) Whether on the facts and circumstances of the case, Rule 57C has to be strictly construed disregarding the fact that Notification No. 217/86 is essentially based on Modvat scheme and the amendment carried out by way of Notification No. 97/89-C.E. was to facilitate such removal from one factory to another of the same manufacturer without payment of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e product Glyoxal 40% manufactured by the respondent Company and cleared by their unit at Thane, under Notification No. 217/86-C.E., as amended, by following Chapter X procedure for the manufacture of final product cleared on payment of duty. It was the claim of the respondent Company that concessions available under Second Proviso to Notification No. 217/86-C.E., dated 2-4-1986, as amended, on following the procedure outlined in Chapter X of CCE Rules, 1944. The Collector of Customs and Central Excise (Appeals) came to the conclusion that the respondent Company was clearing their final product from both the factories on payment of duty and that wherever intermediate product was cleared under Notification No. 147/84, they invariably reverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Modvat Credit Rules. Here, in the present case admittedly intermediate product was not used within the factory and hence the learned Assistant Collector has rightly rejected the said claim of the respondent assessee. She has, therefore, submitted that the language of the Statute is very clear and there is no ambiguity therein. The claim of the respondent assessee should not be allowed on the basis of Notification No. 217/86 which has no direct bearing on the issue involved in the pre sent reference. 7. We have heard learned Standing Counsel appearing for the Central Excise Department and we have also perused the orders passed by the authorities below. There is no independent reasoning in the impugned order of the Tribunal. It simply relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ively in the manufacture of notified final products under Rule 57A, such inputs can be cleared from the place of manufacture for further use in the manufacture of final products within the factory of the same manufacturer, without payment of duty, which, otherwise would be payable in terms of Rules 9 & 49 of the Central Excise Rules as amended. Even after considering the provisions contained in Rule-57C of the Rules, the Tribunal observed that the scope of Rule 57C is to be construed in the context of Modvat Scheme and not to destroy that concept. Any interpretation in such a situation has to be to give effect to Notification 217/86 and not to take away the benefit of averting payment at each stage in the line of production. Hence, a mechan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e defeated and it cannot be given effect in such cases. 9. We are, therefore, in total agreement with the view taken by the Tribunal and held that the Modvat credit of duty paid on the basis of inputs used in the intermediate product cannot be denied by applying Rule 57C of the Central Excise Rules, 1944, in respect of removal of inputs from one factory to an other under the provisions of Notification No. 217/86-C.E. as amended by Notification No. 97/89-C.E., by following Chapter X procedure of the Central Excise Rules, under which payment of duty on the ultimate final product is ensured. The question No. 1 is, therefore, answered in negative i.e. in favour of the respondent assessee and against the Central Excise Department. We are also o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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