9911796707
TMI Blog1990 (8) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... 3208 without payment of duty in terms of the exemption Notification 175/86 up to a limit of Rs. 15 lakhs and thereafter started paying duty on the goods falling under this Tariff Item and claimed the benefit of MODVAT Credit in terms of Rule 57A. They also cleared goods subsequently under different Tariff headings and claimed the benefit of Notification 175/86 in respect of those items up to the aggregate limit of Rs. 15 lakhs as envisaged in the said notification. The learned original authority, while upholding the claim of the appellants that they could claim the benefit of notification up to the aggregate value of Rs. 30 lakhs for the items which are covered by the said notification, held that inasmuch as the appellants have started ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme." The appellants were in terms of this order called upon to pay a duty of Rs. 2,262.45. Before the learned Collector (Appeals) the appellants pleaded that inasmuch as they had not claimed the benefit of MODVAT credit in respect of the goods other than those falling under Heading 32.08 no duty could be demanded in respect of the goods cleared under the exemption Notification 175/86 and in respect of which the appellants had not taken any MODVAT Credit of the duty paid on the inputs going into the manufacture of the same. The learned Collector (Appeals) did not accept their plea and held as under: "Once appellant starts availing of credit of duty paid on inputs, for any one item, he cannot at the same time avail of duty-free clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to pay duty in terms of the said sub-clause in respect of all the items that he may be manufacturing. For convenience of reference the said opening para of Notification is reproduced below : "In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 85/85-Central Excises, dated the 17th March, 1985, the Central Government hereby exempts the excisable goods of the description specified in the Annexure below and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), thereinafter referred to as the "specified goods"), and cleared for home consumption on or af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification and in respect of which the input credit of duty under Rule 57A is not availed of, while the Revenue has argued otherwise. We observe that the exemption under Notification 175/86 has been made applicable to the goods specified in the said notification and the parameters under which the same can be availed of by a manufacturer have been set out in the said Notification. There is no dispute that the appellants as a manufacturer are covered by the said Notification 175/86. The dispute is in regard to the applicability of the provisions contained in sub-clause (a)(i) as set out above. A reading of the said sub-clause (a)(i) would show that where a manufacturer avails of the credit of duty paid on inputs used in the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se goods where the inputs relief by way of MODVAT Credit is not taken and it would in fact be placing an invidious burden on a manufacturer in case he takes the benefit of MODVAT Credit under Rule 57A for one item and he is called upon to pay the price for that by way of payment of higher rate of duty in terms of Notification 175/86 on goods in respect of which he is not claiming any MODVAT Credit. Sub-clause (a)(i), therefore, has to be read only in the context of the goods for which MODVAT Credit is availed of and not for other goods. In view of this we hold that since the appellant had not availed of the benefit of MODVAT Credit in respect of the inputs used in the goods other than those falling under Tariff Heading 32.08, they should be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
