TMI Blog1990 (3) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 27/87 dated 1-3-1987 even though in a particular month June, 87, the vegetable product cleared by them did not contain the Minor Oil. 2. In the present appeal before us, the appellant Collector has contended that the order of the Collector (Appeals) is improper as credit earned in respect of the inputs i.e. Minor Oils can be utilised towards payment of duty on the finished goods only if such inputs are used in the manufacture of final products i.e. vegetable products. As in the instant case, Minor Oils were not used in the manufacture of vegetable product during the month of June, 87, input credit of Minor Oil cannot be utilised for payment of duty towards clearance of the said final product which does not contain the input Minor O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed product, the credit cannot be permitted to be utilised. 4. Replying to the arguments of the learned SDR, Shri P.R. Biswas, learned Consultant appearing for the respondents submitted that the grounds advanced in the appeal are not valid. Rule 57N lays down the manner of utilisation of credit, according to which the credit may be utilised towards payment of duty on the final products for the manufacture of which such inputs are intended to be used. He laid emphasis on the condition - intended to be used. He submitted that it has always been the intention of the respondents to use the Minor Oil (inputs) for the manufacture of the final products. If in a particular month, the said inputs were not utilised, it cannot be taken to mean that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the minor oil factor therein instead of considering whether minor oil has been utilised during the month in question. Further, what is manufactured in a month may not necessarily be cleared in that month itself. A situation could arise that in the month of manufacture, minor oil could be utilised but in that month s clearance, the product may be entirely without the beneficial presence of the all important minor oils. Again, we find that the Assistant Collector had, for the month of September, 87, allowed the utilisation of credit though only a negligible quantity of minor oil had been utilised. He had made a significant observation in his order that there is no provision to allow the utilisation of credit proportionate to the quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing the credit is done only after the minor oil is hydrogenated. Its utilisation for payment of duty on the vegetable products cleared has to be only after the commencement of the succeeding month following the month in which credit had been allowed. Thus, while there is a condition that the credit taken cannot be utilised before the commencement of the succeeding month there is no other condition within which such credit can be utilised. In the present case as credit had been allowed it would only mean that the input minor oils have actually been hydrogenated. It is not, however, clear whether such hydrogenated minor oil had been utilised in the manufacture of vegetable product. In that event it is not clear how it is said that the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its utilisation, it is felt, cannot be circumscribed by applying the criterion of utilisation of the minor oils in the manufacture of the final product cleared, for clearance of which the credit taken is sought to be utilised. The learned SDR controverted the argument of the learned Counsel that, in terms of Rule 57P, the intention to manufacture vegetable product by utilising the inputs (minor oils) would entitle them to draw upon the credit and actual utilisation of the said minor oils for each and every batch of vegetable product is not a must by stating that Rule 57K provides otherwise. As observed by us earlier, the said Rule merely lays down that the Government may, by Notification, specify the final products and the inputs to which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or batches of production of vegetable product the minor oil(s) in question are not used, the credit taken on account of such inputs shall stand forfeited and that it should be disallowed and adjusted in the account current. Credit is allowed only after hydrogenation of the minor oil and as long as the hydrogenated minor oil is available in the factory separately or in combination with other inputs for the manufacture of vegetable product for the intended use for the manufacture of vegetable product and is eventually put to such use, the credit cannot be disallowed. When put to the intended and declared use the credit taken will be permitted to be utilised for payment of duty on the final product, allowing the use of credit even if the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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