TMI Blog1993 (3) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of this product, they are bringing inputs viz. rubber chemicals, synthetic rubber, organic and inorganic chemicals, copper wire rods/bars and aluminium rods/wires. They have filed the requisite modvat declaration in respect of the inputs claiming that these inputs are utilised in the manufacture of their final product viz. insulated wires and cables. Accordingly, they availed of this modvat facility for the period 12-4-1986 to 31-1-1991. However, a show cause notice came to be issued on 8-4-1991 by the Collector alleging that synthetic rubber, rubber chemicals and other chemicals go into the preparation of rubber compound, which is a distinct commercial product and it is not occurring at intermediate stage of manufacture of insul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, input for input of the final product is also an input for the final product. Hence, there is no mis-declaration in the modvat declaration. But the allegation of suppression is sought to be sustained on a ground that the appellants have not furnished the classification list with regard to the rubber compound claiming its exemption under Notification No. 217/86. Hence, suppression and extended period are sought to be applied. This argument is also amusing because of the fact that rubber compound, even if it is construed to be manufactured independently, is utilised only for providing insulation to wires and cables and it is captively consumed. When they are declared in the modvat declaration that they are manufacturing insulated wires and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the final product namely insulated wires and cables. All the components of a final product cannot be produced in a single stream. There could be more than one stream for different components. Rubber compound, being a component, gets manufactured separately and used in the manufacture of wires and cables. Hence, viewed in this background, it has to be construed as an intermediate product. In view of this, the benefit of Rule 57D is available to them. Credit of duty paid on synthetic rubber and other chemicals would be available for payment of duty on insulated wires and cables, notwithstanding the fact that rubber compound, which is a component, occurring at the intermediate stage, is exempted. Hence, the appeal is to be allowed on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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