TMI Blog1990 (12) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... uct based on the Ministry s Order No. B-22/5/86-TRO dated 7-4-86. Under these statutory instructions issued by the Govt. of India the respondents availed of the deemed MODVAT credit in respect of the articles purchased by them from the market and which were not covered by any duty paying documents. These instructions of the Ministry, however, were modified and the respondents inputs with effect from 2-11-1987 became ineligible for the deemed MODVAT credit without the production of the duty paying documents. At the relevant time they had 29,812 Kgs. of the inputs which they had received earlier to 2-11-1987 and in respect of which they had taken the deemed MODVAT credit. The learned original authority after issuing the show cause notice held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) a manufacturer who has filed a declaration under sub-rule (1) of Rule 57G and has obtained a dated acknowledgement declaring the inputs and the finished product in respect of which MODVAT credit is required to be taken and utilised can take credit of the duty paid on the inputs received by him, if the same have been received under a cover of gate pass or a ARI, a bill of entry or any other prescribed document evidencing payment of duty. Thus it may be seen the normal requirement of law under Rule 57G(2) for purpose of taking MODVAT credit in respect of eligible inputs is the production of gate pass etc. evidencing payment of duty. By virtue of the proviso to Rule 57G(2) an exception has been created whereby on the satisfaction of the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought into the factory, where the manufacturer is eligible to take MODVAT credit, the manufacturer while he takes the MODVAT credit gets bound down by the rigour of the other provisions under the MODVAT rules. It is seen that in terms of Rule 57F the inputs on which the credit had been taken cannot be removed from the factory just like that and any removal of the same is subject to prior permission of the Collector of Central Excise on payment of appropriate duty of excise treating the said inputs as if these have been manufactured in the said factory. There is no plea that the inputs which had been brought in were not being used for the specified finished product as specified under Rule 57A. All that happened was that the Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en asked to be reversed as the respondents have been directed to reverse the MODVAT credit only in respect of that portion of the lot of the inputs which were lying in stock as on 2-11-1987 when the amending instructions are issued. We may mention that in the enacted scheme of the MODVAT once the credit in respect of the specified inputs has been taken and there is no dispute in regard to the use of the inputs for the specified finished products, the credit, in our view, cannot be reversed even when a particular input may be deleted from the specified categories of the inputs under Rule 57A. In the above view of the matter, therefore, we hold that there is no merit in the appeal and accordingly dismiss the same. - - TaxTMI - TMITax - Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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