TMI Blog1995 (5) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... ion mentioned in the Notification No. 69/89 as amended at S. No. 1(b). (iii) to drop the demand raised in the show-cause notice, dated 3-5-1990 for Rs. 12,83,852.84, and (iv) to grant benefit of the MODVAT credit taken on the inputs and subsequently reversed to the tune of Rs. 5,04,930.97 in order to avail the concession under Notification No. 69/86 as amended in respect of subject clearance. 2. The facts of the case are that the appellants are engaged in the manufacture of Enamelled Copper Winding Wire from duty-paid copper wire bars under Chapter 7403.12 of the CET Act, 1985. They send the copper wire bars for job work under Rule 57F(2) of the CE Rules, 1944 for converting them into copper wires above 6 mm diameter which is classifiable under Chapter Heading 7408.11. The job work is done after obtaining due permission from the authorities for operating under Rule 57F(2) as well as for the benefit of Notification No. 214/86-C.E. The appellants manufacture from the copper wires of above 6 mm various other final products of copper viz. copper wires falling under 7408.11 and 7408.19 and copper strips falling under 7409.90 which are liable to CED. They also manufacture enamelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rem. They submit that at the stage of availling the modvat credit, they are not in a position to ascertain what would be the quantity of inputs in the manufacture of final products, which may be cleared at nil rate of duty. They have submitted that they had filed classification list and [had] followed all the procedures and maintained all the statutory registers. 3. However, the Asstt. Collector issued three show-cause notices demanding the sums as indicated supra on the ground that the goods have been cleared at nil rate of duty by wrongfully availing the benefit under the said notification, as the same had been manufactured out of duty-paid copper rods/wire exceeding 6 mm on which Modvat credit was taken by them and which had been subsequently reversed, which procedure is not permissible by the said notification. The appellant had submitted their explanation, however, both the authorities rejected their pleas and held that the availment of modvat and then its reversal of credit for taking the benefit of the notification, cannot be done only to avail the exemption under Notification 69/86, since, there is no authority under Notification 69/86 to reverse the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Ltd., Hyderabad v. C.C.E. Customs as reported in 1994 (73) E.L.T. 769 (SC) = 1994 (4) R.L.T. 323. He also submitted that when a term has not been defined in a notification, then the term as defined and understood in a statute is required to be looked into. In this regard, the ld. DR relied on the ruling rendered by Hon ble Delhi High Court as in the case of Good Year India Ltd. v. Collector of Customs - 1990 (49) E.L.T. 39 and that of Hon ble Supreme Court in the case of Prestige Engineering (India) Ltd. v. C.C.E. as reported in 1994 (73) E.L.T. 497 (SC) = 1994 (4) R.L.T. 333. Arguing further, ld. DR submitted that Modvat credit is like a pool and it requires that so much of duty utilised is from such input only, thereby, there is emphasis of utilising the credit of duty paid on such input for the final product. By adopting this procedure of reversal of credit by the appellant, the very rules of Modvat are violated and is against its spirit. He placed before us the ruling of the Gujarat High Court in the case of Navsari Oil Products Ltd. v. Asstt. Collector of Central Excise, 1992 (60) E.L.T. 550 (Guj.) wherein it has been held that, if separate accounts are maintained then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts used in the manufacture of final product to be cleared at nil rate of duty under the notification, however, if the manufacturer uses the Modvat credit paid on the inputs, in that case, on the same final products, the manufacturer has to pay duty at the rate of 15% ad valorem. The terms of the said Notification 69/86 are extracted hereinbelow : ******* 8. The Revenue s stand is that such reversal of credit to utilise the benefit of concessional rate of duty is not permissible. This is contested by the assessee on the ground urged by ld. Senior Advocate. We are unable to agree with the ld. Sr. Advocate. The argument of ld. DR has lot of force and it requires to be accepted. The modvat credit utilised cannot be reversed to avail the benefit of the notification. as there is no provision in Modvat Rules. The Tribunal has held so, in the case of Universal Radiators Ltd. v. C.C.E., Coimbatore as reported in 1994 (54) E.C.R. 215 in Para (7), which is reproduced herein below : 7. At the outset I would like to observe that in a number of decisions the Tribunal has held that where the inputs are used in a factory for production of specified finished product and the part of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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