TaxTMI 
TaxTMI 
1994 (5) TMI 91
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....ET, 1985. It was the case of the Revenue that the respondents cleared 18.346 MT of unbleached absorbant Kraft paper from their factory under Rule 57F(1)(ii) during November, 1989 without payment of appropriate Central Excise duty on the allegation that they received the said kraft paper on payment of duty and availed of Modvat credit at the restricted rate of Rs. 800/- per tonne in view of Notification No. 149/87-C.E., dated 20-5-1987 and at the time of clearance of the same they paid the duty only equal to Modvat credit availed of by them that is to say at the rate of Rs. 800/- per tonne by debiting instead of paying the appropriate rate of duty leviable on the said goods at the time of clearance from the factory. Besides, according to Rev....
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....payment of appropriate duty of excise, as if such inputs have been manufactured in the said factory and further that as per Rule 9A(i) ibid the rate of duty and the Tariff Valuation shall be the rate and the valuation in force on the date of the actual removal of such goods from such factory or warehouse. In the instant case admittedly the respondents received the inputs at concessional rate from SSI Unit and cleared these inputs subsequently from their factory under the said Rule at the same rate instead of paying full rate at which they were supposed to pay the duty inasmuch as the inputs are treated as deemed manufacture if these are cleared as such from the factory and the rate applicable will be effective rate and not concessional rate....
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....viso to Rule 57A may be removed from the factory for home consumption on payment of duty of excise equivalent to the credit availed on such inputs. In this premises he submitted that if the inputs are not used in or in relation to the manufacture of final product by the respondents and the amount of duty paid on clearance of such inputs is more than that of the amounts of credit taken then it will become an absurd proposition. To butteress his submission he cited the case of Bengal Immunity Co. Ltd. v. State of Bihar, AIR 1955 S.C. 661 wherein it was held that legal fictions are created only for specific purpose and these must be limited to that purpose and should not be extended beyond that legitimate field a case followed in the case of I....
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....rom the factory for home consumption on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such inputs under Rule 57A." 7. By Notification No. 4/92-C.E., dated 1-3-1992 the following sub-rule (1A) has been inserted which reads as follows : "(1A) Notwithstanding anything contained in clause (ii) of sub-rule (1), the inputs in respect of which a credit of duty has been restricted in terms of proviso to Rule 57A, may be removed subject to prior permission of Collector of Central Excise from the factory for home consumption on payment of duty of excise equivalent to the credit availed on such inputs." 8. Explaining the effect of this amendment in the Rul....