TMI Blog1995 (6) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of duty under Rule 191B of the Central Excises and Salt Act, 1944. The learned lower authority has relied upon the earlier decision in another case wherein the learned lower authority has held as under : I have gone through the appeal. The short point for consideration is whether the appellant is eligible for the benefit of Modvat credit on Phenol Formaldehyde Resin used as an input in the manufacture of commercial plywood, cleared to M/s. Decorative Laminates (P) Ltd., Mysore. Admittedly, the appellant has cleared the input without payment of duty as per the provisions of Rule 191BB which was availed by M/s. Decorative Laminates. First of all, the appellant cannot take the plea that going by the eligibility under Rule 191BB, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether the Modvat Credit taken in respect of Phenol Formaldehyde Resin which is attributable to the quantity of Phenol Formaldehyde Resin contained in the commercial plywood manufactured by the appellants and removed without payment of duty under Rule 191B can be recovered from the appellants in terms of Rule 57-I read with Rule 57C of the Central Excises and Salt Act, 1944. The learned Collector (Appeals) has relied on the ruling of the Tribunal in the case of India Pharmaceutical Works v. Collector of Central Excise reported in 1991 (54) E.L.T. 355 (Tri.). 3. The learned Consultant for the appellants has pleaded that the finished products in which the appellants have used the inputs had been cleared from the appellants factory wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts manufacture out of the inputs received by them and for which they had taken Modvat credit was not exported as such and therefore the appellants plea that they should be given the benefit in terms of proviso to Rule 57F (3)(iii) is not maintainable. The goods as manufactured by the appellants were finished goods and notwithstanding the fact that the same were further used by other manufacturer for making a product which was ultimately exported, the same cannot be considered as intermediate goods for Modvat purposes. He has adopted the reasoning of the learned lower authority s order and relied upon the Larger Bench decision in the case of M/s. Kirloskar Oil Engines Ltd. v. C.C.E., Pune reported in 1994 (73) E.L.T. 835 wherein it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Rules. In terms of the notification, the manufacturer of the decorative plywood, i.e. the buyer of the commercial plywood, the appellants customer, would have therefore executed a bond for twice the amount of duty payable beyond the non-duty excisable goods i.e. commercial plywood in this case, used for the manufacture of decorative plywood for export purpose. The excisable goods therefore received by the decorative plywood manufacturer were also required to be kept in terms of this notification in a separate room. A procedure is also prescribed under this notification for disposal of the waste arising during the manufacture either on payment of duty or for recycling in the same factory. This notification also has a provision for allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded to be used in accordance with the declaration filed under sub-rule (1) of Rule 57G; or (ii) on the waste, if any, arising in the course of manufacture of the final products; or (iii) on the inputs themselves if such inputs have been permitted to be cleared under sub-rule (1) : Provided that the credit of specified duty in respect of inputs used in the final products cleared for export under bond or used in the intermediate products cleared for export in accordance with sub-rule (2), shall be allowed to be utilised towards payment of duty of excise on similar final products cleared for home consumption or for export on payment of duty and, where for any reason, such adjustment is not possible, by refund to the manufacturer subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to a unit functioning under Rule 191B. We observe that when the clearances are made to a free trade zone or to a 100% export oriented unit of any finished product without payment of duty from a unit which has taken Modvat credit in respect of the inputs, the benefit is given as ultimately in terms of the schemes the goods allowed manufacture are exported. The units which are manufacturing goods under Rule 191B in terms of notification issued under this Rule are in our view similarly placed as the unit located in the free trade zone or to a 100% export oriented unit. We see no reason as to why the same benefit as provided under Rule 57F for these units cannot be extended to this unit. Interest of revenue is safeguarded by the specific prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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